Federal reserve expected to hike to highest level in 14 years, UK government borrowing expected to surge further ahead of chancellor announcement on Friday, Putin threatens escalation as Russia moves to partial mobilisation.
-
FX Rates
September 21, 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 1.1331 GBP/EUR 1.1437 EUR/USD 0.9904 USD/CAD 1.3382 EUR/CHF 0.9585 EUR/SEK 10.8816 EUR/NOK 10.2597 EUR/DKK 7.4366 USD/ILS 3.4601 AUD/USD 0.6667 NZD/USD 0.5887 USD/SGD 1.4141 USD/JPY 143.80 USD/CNH 7.0633 USD/INR 79.9213 EUR/ILS 3.4276 GBP/ILS 3.9201 USD/ZAR 17.7449
-
GBP
UK government borrowing climbed to £58.2 billion in the first five months of the fiscal year, a sum which is expected to surge further as the Prime Minister prepares to announce her tax cuts and energy subsidies. Bloomberg economics see the plan costing £200 billion over the next two years, which could put public debt on an ‘unsustainable path’
Markets are beginning to expect the Bank of England to match pace with the Fed delivering two jumbo hikes by the end of the year. Money markets are pricing in over 2% of hikes through the next three BoE meetings.
EUREuropean natural gas prices jumped as traders have assessed the security of winter energy supply across the continent. This only accelerated further with Putin’s announcement of escalation of the war in Ukraine. The euro trades -0.56% weaker off Putin’s press conference.
Christine Lagarde, ECB Chief, has indicated that borrowing costs will rise further despite the ECB’s decision to front-load initial hikes.
USDThe federal reserve is expected to hike interest rates to their highest level since 2008, with markets expecting Jerome Powell to forecast further increases. The Federal Reserve has led global central banks in tightening to curb harmful inflation. A 75-bps is almost a certain according to swap markets that currently price in roughly 80-bps of tightening.
If the forecasted peak of interest rates set by the Fed is lower than markets are expected, the dollar strength seen over recent weeks could be at risk of reversal.
ASIA/PACIFICThe ADB cut its China economic growth forecast for this year to 3.3% down from 4%, citing a prolonged war in Ukraine and China’s commitment to a zero covid policy.
Chinese banks are expected to lower their lending rates again after leaving loan prime rates unchanged for September.
ILSThe Israel breakeven inflation rate for the 10-year CPI-linked bonds rose to a 14-year high.
USDILS trades around 3.46, gaining on yesterday’s highs.
Data & EventsFederal Reserve Rate Decision
Jerome Powell’s Conference
UK Sep CBI trends total orders.
Russo-Ukrainian WarPutin has mobilised more troops as Russia moves to ‘partial mobilisation’ in Ukraine. This comes after weeks of successful Ukrainian counter attacks. He cited that these were necessary steps to defend Russia against the whole of NATO. The dollar strengthened following the escalation with energy prices rising.
Risk Statement
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.
| Source: Bloomberg | |
© 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. |