Dollar slides further as market mulls fed pace, Scholz and Macron meet to discuss respond to US inflation reduction act, Netanyahu cites bond sales as sign of investor confidence.
January 23, 2023
GBP/USD 1.2415 GBP/EUR 1.1386 EUR/USD 1.0905 USD/CAD 1.3344 EUR/CHF 0.9991 EUR/SEK 11.1458 EUR/NOK 10.6754 EUR/DKK 7.4394 USD/ILS 3.3828 AUD/USD 0.7010 NZD/USD 0.6491 USD/SGD 1.3166 USD/JPY 129.66 USD/CNH 6.7705 USD/INR 81.3938 EUR/ILS 3.6886 GBP/ILS 4.1998 USD/ZAR 17.1886
Up to a million households in England, Scotland and Wales will be paid to use less electricity on Monday evening as part of a scheme to avoid blackouts. Those that have signed up will get discounts on their bills if they do things like delay using washing machine or oven.
Londoners are weathering the cost-of-living crunch better than people in the rest of the UK due to a rise in wages – capital residents saw wages adjusted for inflation slip by £9 a week, whilst the UK average slipped by £19 a week.
Sterling continues to trade above the 1.24 level after a week of gains saw the pound reach highs of 1.2448 vs the USD, reaching the highest level since June. The FTSE has gained 0.21% since this morning’s open.EUR
German Chancellor Olaf Scholz and French President Emmanuel Macron met yesterday to discuss Europe’s response to the US Inflation Reduction Act. The EU leaders are concerned that European business may begin to fall behind US and Chinese firms, should their calls for huge investment not be met. EU council President Michel is due to announce a set of proposals to strengthen the blocs economies shortly.
The Euro has continued its rally, gaining 0.7% this morning to reach the highest level against the Dollar since April, trading at a high of 1.0927. The single currency responded to comments from ECB’s Lagarde, that policy makers must “stay the course” when it comes to their battle with inflation, despite slowing price rises. Investors will continue to monitor comments from Central Bank members ahead of next week’s policy decision.USD
Last week told the tale of an expected story, one which the Federal reserve will be content with. The Producer Price index showed widespread disinflationary forces which could drive headline as low as 2.6% by mid-year. This may pave the way for the Federal Reserve to begin cutting interest rates before year-end. On the other hand, retail sales and industrial activity hint at stalling growth, as the tighter monetary conditions begin to restrict economic expansion, hence cooling inflation.
The greenback is eyeing a fresh low for the year as markets mull the Fed’s pace. The Dollar spot index has slipped a further 0.3% on Monday.ASIA/PACIFIC
India’s budget for the coming year will reflect a sharper focus on building up the industrial base of the country. It is expected the govt. will allocate more funds for capital expenditure and subsidies.
Japan’s PM Kishida said its too early to discuss revising an accord the government has set with the BoJ aimed at helping the central bank achieve its 2% inflation goal.ILS
Israeli PM Netanyahu has cited bond sales as investor support for his policies. There was high demand for the nation’s £2 billion green bond sale. Opposition parties have been critical that the new policies would worsen investor confidence in the Israeli economy. USDILS trades almost 0.2% at time of printing.Data & Events
Euro-Area Industrial Output
US Dec. Leading Index
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