September’s crucial market events to watch

9 September 2024

Weekly Market Headlines:

September brings significant interest rate decisions that could create major shifts in the FX markets. Typically, higher interest rates strengthen a currency, while lower rates weaken it.

This month, the Bank of England, European Central Bank (ECB), and the US Federal Reserve meet within just eight days, intensifying market volatility. With divided opinions on the outcomes, uncertainty heightens.

For example: Suppose you’re planning to purchase goods from Europe in the next few months. If the ECB hints at further rate cuts, the euro could weaken, making your purchases cheaper. By staying informed and working with Lumon, you can lock in favourable exchange rates or adjust your strategy to protect your business from sudden currency shifts.

Key dates:

• ECB: Thursday, September 12 – A 0.25% rate cut is expected, bringing rates to 3.5%. Market movement might hinge on hints of an October cut.
• US Federal Reserve: Wednesday, September 18 – Uncertainty remains over whether the rate cut will be 0.25% or 0.50%.
• Bank of England: Thursday, September 19 – Upcoming UK data may influence the decision, but a pause is currently expected.

Market movements could be triggered by data releases and central bank comments. Now is a good time to reassess your FX strategy and connect with your Lumon account manager to manage risk and capture volatility.

What events might move exchange rates this week?

GBP

• Tuesday: UK Unemployment
• Wednesday: UK GDP

USD

• Wednesday: US Inflation

EUR

• Thursday: Eurozone Interest Rate Decision & Press Conference