Interest rate changes expected to drive USD and GBP movements

16 September 2024

Weekly Market Headlines:

• Both the Bank of England and the US Federal Reserve could influence markets this week. Interest rate cuts typically weaken currencies, which could lead to volatility for sterling and the US dollar.
• The US Federal Reserve is debating a 0.25% or 0.50% rate cut, which may lead to volatility as markets try to second guess the outcome. A larger cut on Wednesday could weaken the dollar, causing more significant market swings.
• In the UK, a rate cut isn’t entirely off the table, but markets are leaning towards the Bank of England holding steady on Thursday. Any unexpected decision or shift in tone could still impact the pound and cause market fluctuations.

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What events might move exchange rates this week?

GBP

• Wednesday: UK Inflation
• Thursday: Bank of England Interest rate decision
• Friday: UK Retail Sales

USD

• Tuesday: US Retail Sales
• Wednesday: Interest rate decision