Dollar slips due to cooling US inflation, UK economy unexpectedly grew, EU and UK to re-enter Brexit negotiations.
January 13, 2023
GBP/USD 1.2241 GBP/EUR 1.1285 EUR/USD 1.1285 USD/CAD 1.3341 EUR/CHF 1.0055 EUR/SEK 11.2602 EUR/NOK 10.6874 EUR/DKK 7.4378 USD/ILS 3.4067 AUD/USD 0.6982 NZD/USD 0.6399 USD/SGD 1.3209 USD/JPY 128.33 USD/CNH 6.7267 USD/INR 81.3257 EUR/ILS 3.6952 GBP/ILS 4.1699 USD/ZAR 16.8569
The UK economy unexpectedly grew though November 2022. GDP rose by 0.1% above expectations of a -0.2% contraction. This means it is unlikely that the UK fell into recession at the end of 2022. Looking forward, as a recession is heavily priced in this likely means recession is likely delayed rather than averted.
The UK and EU have re-entered into Brexit negotiations in an attempt to secure a final Brexit deal.EUR
Euro-zone Industrial production improved on the consensus, rising 2% YoY. These reading confirm that the sector has remained resilient to the energy crisis, and inflation impacting manufacturing costs.
ECB policymakers have echoed expectations that the ECB still has to hike further. Vujcic sees further rate hikes in 2023, meanwhile Kazaks has said that the does not see a reason to cut rates at the latter end of the year.USD
Cooling US inflation has reinforced market expectations that the Federal Reserve will press ahead with downshifting to a 0.25% hike at the end of the month. The report offered a third straight month of good news, with CPI moderating as expected to 6.5% down from 7.1% the month prior. As the market readjusted their interest rate expectations, the dollar weakened globally.ASIA/PACIFIC
BOK governor Chang-yong did not rule out the possibility of a further rate hike, whilst highlighting the likelihood that the Korean economy shrank in Q4 2022.
Former Chief Scientist at the Chinese centre for Disease Control and Prevention has said that China’s covid outbreak could continue for another three-months as parts of the country at yet to be afflicted.ILS
USDILS slipped as a result of the US CPI print, falling back to around 3.4. Israel’s trade deficit widened to $3.3 billion in December.Data & Events
No Notable Events
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