The inflation outlook in Europe improves as key economies run ahead of forecasts. The Dollar declines as risk sentiment improves.
Looking for in-depth analysis of FX markets? Check out our latest FX Navigator.
February 2, 2022
GBP/USD 1.3532 GBP/EUR 1.1992 EUR/USD 1.1284 USD/CAD 1.2694 EUR/CHF 1.0400 EUR/SEK 10.4133 EUR/NOK 9.9485 EUR/DKK 7.4390 USD/ILS 3.1575 AUD/USD 0.7129 NZD/USD 0.6631 USD/SGD 1.3481 USD/JPY 114.58 USD/CNH 6.3634 USD/INR 74.8750 EUR/ILS 3.5631 GBP/ILS 4.2711 USD/ZAR 15.2826
UK retail prices rose 1.5% in January compared with the same month in 2021, the fastest pace in over 9 years. This comes a day before the BoE is widely expected to hike interest rates for the second time.
PM Johnson said he will publish the full investigation into No10. Parties, to escape the gravity of controversy on Downing Street. The government illustrated their vision to “level up” parts of the country, by decentralizing civil service departments.
British factory output grew for a 20th consecutive month on the back of yesterday’s PMI release, which printed above forecasts at 57.3.
The FTSE100 closed 70 points higher yesterday, whilst Sterling posts gains against the dollar and euro this morning.EUR
Tensions over Ukraine continue to threaten stability on the continent. Russia is alleged to be moving another 30,000 troops to the border. This comes as several European and World leaders have shown solidarity with Ukraine offering military and civilian aid.
Euro Area unemployment beat expectations yesterday, while manufacturing PMIs narrowly missed out, despite improving on December’s release.
Equities have pushed higher across the bloc as inflation data from France, like Germany and Spain, ran ahead of forecasts. The STOXX 600 and DAX closed 1.3% and 1% higher respectively. Core Inflation data is due to be released from the Euro Area this morning, a key focus for investors ahead of tomorrow’s ECB rate decision.USD
ADP employment change is estimated to print just above 200k today, compared to over 800k the previous month. The data will be closely watched as an early signal ahead of US Non-Farm payrolls due to be released on Friday.
US manufacturing PMIs fell slightly below the previous month’s levels, although narrowly beat expectations. Construction spending failed to meet forecasts of 0.6% to print at 0.2%.
The DXY extended losses for the third consecutive session yesterday as improved risk-sentiment dampened demand for the greenback. The Dollar is trading 0.12% lower against the Euro and Sterling this morning.ASIA/PACIFIC
Asian stocks rose on the back of positive US earnings outlooks, and a Fed that appears to be taking a measured approach to tightening policy. The MSCI Pacific is up 0.9%, and the ASX200 1.17% after the Asian session, with many markets remaining shut for the Lunar New Year.
Sino-Japanese tensions flare, after Japan’s parliament passes a motion on Uyghur human rights, just days before the Winter Olympics commence.ILS
USDILS continues it trajectory towards the 3.16 level as we print, up 0.22% at time of writing. The pair is trading 1.25% lower since Monday.
The Bank of Israel sold 12 billion shekels of 371-day Makam bills with a yield of 0.07%.Data & Events
OPEC decides on production policy and output limits
Euro Area – Jan CPI
US – ADP Employment Change
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.