Dollar strength forces intervention in yen, Bank of England hikes by 0.5%, ahead of new governments Fiscal policy.
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FX Rates
September 23, 2022Rates are not real time. Rates are today's indicative mid-market rates as of time of publishing, which may vary. Please contact SVB for a current quote.
Source: BloombergGBP/USD 1.1178 GBP/EUR 1.1439 EUR/USD 0.9772 USD/CAD 1.3520 EUR/CHF 0.9576 EUR/SEK 10.8964 EUR/NOK 10.2302 EUR/DKK 7.4365 USD/ILS 3.4897 AUD/USD 0.6598 NZD/USD 0.5816 USD/SGD 1.4220 USD/JPY 142.37 USD/CNH 7.1132 USD/INR 80.9625 EUR/ILS 3.4107 GBP/ILS 3.9009 USD/ZAR 17.7440
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GBP
The Bank of England voted to raise rates by 0.5% yesterday, whilst signalling a larger sized hike in November. This brings interest rates to their highest level since 2008, as the Bank of England kept pace with central banks globally raising rates. Any gains made by the pound were quickly erased sterling yet again fell through yearly lows.
Kwasi Kwarteng is set to release his mini budget, with the centre piece being tax cuts and energy support. The government looks set to pivot from fiscal conservatism towards efforts to stimulate longer-term growth. There is some concern that plans will elevate inflation, whilst pushing public finances into unsustainable territory.
EURThe ECB will continue to raise borrowing costs, say ECB member Kazaks, even as recession risks become more poignant. Euro Area services PMI came in at 48.9, whilst manufacturing also remained in contractionary territory at 48.5.
Italy heads to the polls on Sunday, with Giorgia Meloni the favourite for form a right-wing majority government, ending months of political uncertainty in Italy.
USDThe dollar reached fresh highs yesterday following the Fed’s commitment on Wednesday to hawkish monetary policy. The story of this year has been extreme dollar strength, with EURUSD falling below parity, and GBPUSD trending towards 1.1.
US equities fell as markets brace for a Fed that has convinced markets they will stop at nothing to regain control of inflation, even hinting that the Fed is willing to accept a recession.
ASIA/PACIFICJapan intervened in the Yen to prop up the ailing currency for the first time since 1998. The intervention has not however addressed the underlying causes of Yen weakness which is ultimately a divergence in monetary policy.
Elsewhere the dollar continues to dominate in globally, the offshore Yuan weakened despite efforts from Beijing to bolster the currency. The PBOC have set a stronger reference rate than expected for a 22nd day.
ILSUSDILS trades higher bolstered by dollar strength. Israel’s unemployment rate was 3.4% in August according to the central bureau of statistics.
Data & EventsUK mini budget
ECB’s Kazak speaks
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