France
23 September 2024
Weekly Market Headlines:
- Pound to Euro levels the highest since April 2022. GBP to Euro levels are up 3.7% from January 1st, £100,000 today buys €4,400 more than the start of 2024.
- Pound to US Dollar levels the highest since February 2022. GBP to US dollar levels are up 4.1% this year, £100,000 today buys $9,900 more than the April lows of this year
- UK Chancellor’s speech at the Labour Party Conference today will set the mood for economic policy ahead and therefore the UK’s growth outlook. Sterling’s strength could be in the spotlight.
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After last week’s interest rate decision and central bank bonanza, the focus turns to economic policy from the government. A series of media stories regarding the Labour Party suggest the honeymoon period for the new government could be over, as the public and investors seek greater news on just what a Labour government will mean for the public finances.
Rachel Reeves, Kier Starmer and the policies of the Labour Party will be under scrutiny with the conference this week. Whilst not a major market mover itself, the UK budget is due on the 30th October and could shape sentiment. For now sterling is trading very strongly against the Euro, US dollar and more, as the Bank of England last week interest rates whilst more globally, central banks are cutting.
Looking at the economic data due, the PMI (Purchasing Managers Index) data will be crucial in providing the most up-to-date snapshots of the Uk, US and Eurozone economies. Providing a score of 1-100, with anything above 50 representing growth, the market will be keen to see how these economies are performing. This will help shape thoughts on interest rate policy ahead, and could be a big driver of market sentiment early in the week.
The end of the week sees vital pieces of US data released, the latest US economic growth data and inflation. The US central bank, the Federal Reserve aggressively cut interest rates last week and there are calls for more cuts. Constantly changing interest rate expectations for the US have triggered plenty of FX market volatility in recent weeks, further changes to that outlook from data at the end of the week could unleash fresh changes across many currency pairs.
What events might move exchange rates this week?
GBP
- Monday: UK Purchasing Managers Index data
USD
EUR
- Monday: Eurozone Purchasing Managers Index data
AUD
- Tuesday: Australian interest rate decision
