Dollar ticks higher as rate expectations rise, Israeli political unrest intensifies, Pound gains following stronger-than expected CPI print.
February 21, 2023
Rates 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.
GBP/USD 1.2095 GBP/EUR 1.1340 EUR/USD 1.0667 USD/CAD 1.3455 EUR/CHF 0.9859 EUR/SEK 11.0040 EUR/NOK 10.9541 EUR/DKK 7.4467 USD/ILS 3.6106 AUD/USD 0.6892 NZD/USD 0.6241 USD/SGD 1.3376 USD/JPY 134.59 USD/CNH 6.8818 USD/INR 82.7988 EUR/ILS 3.8513 GBP/ILS 4.3670 USD/ZAR 18.1941
The final set of figures out before next month's budget show that the UKs public sector unexpectedly posted a surplus in January as tax revenues offset the costs of the governments energy support schemes.
A major UK trial of the four-day working week found that the vast majority of businesses saw revenue gains, less burnout and better staff retention over the 6 months trial period.
GBPUSD jumped higher following strong PMI data from the UK. The UK Services PMI rose to 53.2, surpassing forecasts of 49.2. Meanwhile the manufacturing PMIs rose to 49.2, also surpassing the forecast of 47.5.EUR
PMI surveys from Europe’s two largest economies show private-sector growth return, as energy prices continue to fall, easing supply pressures. German composite PMI climbed to 51.1, the first time since June the gauge printed above the 50 threshold, signifying an expansion. The same measure for France printed at a 7 month high of 51.6, beating expectations for a fourth straight month of contraction. The headline print for the euro area climbed to 52.3 in February, higher than forecasts and indicating some resilience in the economy. The manufacturing sector continued to decline across the board, whilst services remained upbeat, as higher borrowing costs and energy reliant processes continue to have an impact.
The Euro lost ground against the Dollar and Sterling this morning, as investors digest prints in both the UK and Euro zone. Stocks opened lower with technology and commodities leading the decline, the Stoxx 600 gauge trades 2.4% down this morning.USD
US futures declined ahead of Tuesday’s market reopening as the market weighs the prospect of central banks tightening policy more than previously expected, following the moderation of disinflation expectations from CPI, PPI, and Retail Sales which all released last week. Consequently, the dollar ticked higher by 0.25%.
US President Joe Biden made a surprise visit to Kyiv, where he gave a joint address alongside his Ukrainian counterpart, Zelensky, who thanked Biden for the US’ “unwavering” support for Ukraine. Biden pledged a further $500m in military aid. On the other side of the conflict, Putin is set to deliver his State of the Union speech today, which is expected to largely focus on the war.
Interest rate expectations have slowly creeped higher over last week. Last Monday there was a 4% chance of a 0.5% hike at the next meeting. Following last week’s data, and FOMC rhetoric, this has risen to a 15.6 chance.ASIA/PACIFIC
The Japanese 10-year yield briefly rose above the Bank of Japan’s 0.5% yield curve control target. The market is adjusting ahead of Kazuo Ueda hearings in parliament on Friday. Ueda is the nominee for the Bank of Japan governorship, who some believe will be more hawkish than the outgoing Kuroda.
China’s banks held their prime lending rates steady as expected. Given January’s record boom in new loans, there was little appetite to trim borrowing costs. The delicate balance of the economic recovery could push the PBOC, and banks to lower borrowing costs in order to provide an extra monetary boost to growth.ILS
A majority of Israeli voters oppose the governments plans for judicial overhaul according to a survey announced yesterday. Tens of thousands of Israelis protested the bill yesterday ahead of its first reading in the Knesset.
USDILS trades higher as dollar strength and shekel weakness combines to push USDILS to the 3.6 handle this morning.Data & Events
UK Feb. PMIs
Germany Feb ZEW Survey
US Feb. PMIs
US Jan. Existing Home Sales
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