Bank of England intervenes to prevent borrowing costs, Euro-area consumer confidence falls to lowest level since 2020. Biden administration expresses concern on UK fiscal policy.
September 29, 2022
GBP/USD 1.0883 GBP/EUR 1.1217 EUR/USD 0.9703 USD/CAD 1.3691 EUR/CHF 0.9507 EUR/SEK 10.9503 EUR/NOK 10.4554 EUR/DKK 7.4365 USD/ILS 3.5334 AUD/USD 0.6477 NZD/USD 0.5693 USD/SGD 1.4379 USD/JPY 144.66 USD/CNH 7.1485 USD/INR 81.7900 EUR/ILS 3.4283 GBP/ILS 3.8454 USD/ZAR 17.9193
Britain has awoken this week amid a financial crisis following the announcement of the government’s financial plan last week. The pound has lost 20% of its value against the dollar this year, and the borrowing costs acceleration prompted intervention from the Bank of England to safeguard Pensions funds and the mortgage market. Roughly 1,000 mortgage deals have been pulled from the market as expectations of the BoE’s tightening cycle rise. Market now price that interest rates will peak at 6.0% through next year.EUR
Allegations of sabotage have been made against Russia, following the discovery of leaks in Danish and Swedish waters on the Nordstream pipeline. Russia denies these allegations.
Euro area consumer confidence falls to 93.7, the lowest print since 2020. EURUSD trades down -0.67% on the day.USD
More than 2 million people have been ordered to evacuate as Hurricane Ian struck the Florida coastline.
The Biden administration expressed concern over the UK economy, which has triggered market turmoil this week. He encouraged Liz Truss’ to dial back tax cuts. Commerce secretary Raimondo warned that cutting taxes and raising government spending wont cool inflation.ASIA/PACIFIC
Australian inflation slowed slightly according to the first reading, signaling that price pressure may be easing because of the RBA rapid interest rate rises. CPI rose 6.8% through August, slowing from 7% the month prior.
Chinese GDP stabilized this quarter, with the next three months expected to be key to the nation’s recovery. This follows the first three quarters where covid lockdowns and supply chain issues weighed on economic activityILS
USDILS trades 0.8% higher intraday. Israel’s consensus GDP growth for 2023 has been cut to 3.1%.Data & Events
Several ECB Speakers
Several BOE Speakers
Germany Sept CPI
US Jobless Claims
Trading in financial instruments may involve a high degree of risk and may not be suitable for all investors. Trading in financial instruments can result in both loss and profit. Investors should carefully consider whether financial instruments suit their needs, financial resources and personal circumstances.
The information contained in this material is solely for informational purposes only and it is not and should not be construed as an offer or a solicitation of an offer to buy or sell any financial instruments and cannot be relied upon as a representation that any particular transaction necessarily could have been or can be effected at the stated prices. This material does not contrue advice.
For more analysis on FX markets or information regarding SVB's FX services:
0800 023 1440 from within the UK
+44 207 367 7880 from overseas
See all of SVB's latest FX information and commentary.
© 2022 SVB Financial Group. All rights reserved. SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, MAKE NEXT HAPPEN NOW and the chevron device are trademarks of SVB Financial Group, used under license. Silicon Valley Bank is a member of the FDIC and the Federal Reserve System. Silicon Valley Bank is the California bank subsidiary of SVB Financial Group (Nasdaq: SIVB).
Silicon Valley Bank is registered in England and Wales at Alphabeta, 14-18 Finsbury Square, London EC2A 1BR, UK under No. FC029579. Silicon Valley Bank is authorised and regulated by the California Department of Business Oversight and the United States Federal Reserve Bank; authorised by the Prudential Regulation Authority with number 577295; and subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of our regulation by the Prudential Regulation Authority are available from us on request. Silicon Valley Bank is a subsidiary of SVB Financial Group, a Delaware corporation and is an affiliate of SVB Financial Group UK Limited. SVB Financial Group UK Ltd is registered in England and Wales at Alphabeta, 14-18 Finsbury Square, London EC2A 1BR, UK under No. 5572575 and is authorised and regulated by the Financial Conduct Authority, with reference number 446159. SVB Financial Group and its subsidiary Silicon Valley Bank are members of the Federal Reserve System and Silicon Valley Bank is a member of the FDIC.
Your eligible deposits with Silicon Valley Bank UK are protected up to a total of £85,000 by the Financial Services Compensation Scheme, the UK's deposit guarantee scheme. Any deposits you hold above the limit are unlikely to be covered. Please click here for further information or visit http://www.fscs.org.uk. For more detailed information about coverage and limits, please review our FSCS Information Sheet at http://www.fscs.org.uk.
This material, including without limitation the statistical information herein, is provided for informational purposes only. The material is based in part upon information from third-party sources that we believe to be reliable, but which has not been independently verified by us and, as such, we do not represent that the information is accurate or complete. The information should not be viewed as tax, investment, legal or other advice nor is it to be relied on in making an investment or other decisions. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation or offer, or recommendation, to acquire or dispose of any investment or to engage in any other transaction.
Foreign exchange transactions can be highly risky, and losses may occur in short periods of time if there is an adverse movement of exchange rates. Exchange rates can be highly volatile and are impacted by numerous economic, political and social factors, as well as supply and demand and governmental intervention, control and adjustments. Investments in financial instruments carry significant risk, including the possible loss of the principal amount invested. Before entering any foreign exchange transaction, you should obtain advice from your own tax, financial, legal, accounting and other advisors, and only make investment decisions on the basis of your own objectives, experience and resources. Opinions expressed are our opinions as of the date of this content only. The material is based upon information which we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such.