Equities slip amid fears may be committed to tighter policy, UK Short-term inflation expectations jump, Germany could rely on nuclear to fill gas shortfall
August 22, 2022
GBP/USD 1.1806 GBP/EUR 1.1789 EUR/USD 1.0014 USD/CAD 1.3005 EUR/CHF 0.9609 EUR/SEK 10.6440 EUR/NOK 9.8304 EUR/DKK 7.4375 USD/ILS 3.2760 AUD/USD 0.6893 NZD/USD 0.6192 USD/SGD 1.3945 USD/JPY 136.94 USD/CNH 6.8478 USD/INR 79.8838 EUR/ILS 3.2804 GBP/ILS 3.8665 USD/ZAR 17.0649
UK short-term inflation expectations jumped following news of double-digit price gains. One-year RPI swaps surged more than 3.5% to a record high of 11.6%. This is set to complicate the policy agenda for the Bank of England, who are treading a narrow path between surging inflation and weak economic growth. Any softening of policy from the Bank of England could further add to sterling’s downside.
GBPUSD now trades at 1.18 following months of weakening economic signals.EUR
Germany may reply on nuclear power to fill the shortfall in their energy grid caused by an expected shortage of Russian natural gas imports this winter.
EURUSD trades -0.3% lower as we print, the EURO Stoxx has opened 1% lower.USD
Equities and contracts globally have slipped amid fears the Fed could be doggedly committed to tighter monetary policy.
The US and South Korea have begun large military drills, including wargaming against an invasion of North Korea.ASIA/PACIFIC
Chinese banks lowered their benchmark loan prime rates for the first time in months, as Beijing looks to stimulate borrowing demand.
Pakistan’s central bank could hike its key rate by 75-bps to 15.75% to stop inflation.ILS
The bank of Israel is expected to extend its tightening to its longest since 2008, as it responds to the highest inflation in over a decade. It is expected that the BOI will raise rates by 50 bps today, raising the key rate to 1.75%.Data & Events
No Major Economic releases.
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.
© 2023 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.