FOMC meeting shows scepticism over disinflation, UK government to assist energy-intensive companies to maintain competitiveness, shekel volatility highest since 2020.
February 23, 2023
GBP/USD 1.2046 GBP/EUR 1.1352 EUR/USD 1.0612 USD/CAD 1.3525 EUR/CHF 0.9886 EUR/SEK 11.0378 EUR/NOK 10.9726 EUR/DKK 7.4454 USD/ILS 3.6074 AUD/USD 0.6830 NZD/USD 0.6239 USD/SGD 1.3414 USD/JPY 134.84 USD/CNH 6.8979 USD/INR 82.7375 EUR/ILS 3.8280 GBP/ILS 4.3455 USD/ZAR 18.3100
The UK government has vowed to assist energy-intensive companies with higher energy prices in a bid to help them maintain competitiveness in Europe. This comes as British Steel announces 260 job cuts to confront soaring costs.
UK opposition leader Kier Starmer speaks today, outlining his plan if he wins the general election next year - he is expected to outline 5 bold missions including a measurable goal for economic growth and proposals to assist the NHS crisis.
Yesterday's trading saw GBPUSD lose some of Tuesday's gains, sitting in the 1.2050 region as we print after Fed minutes confirmed higher rates for a longer time to tame inflation. Investors will now focus on the post-Brexit trade agreement with Northern Ireland for some direction in the pair. Rising bets for additional rate hikes for the BOE also act as a tailwind for GBP providing some support.
The FTSE dipped 0.25% since this morning’s openEUR
The EU and US are close to an agreement that would allow EU companies to benefit from Biden’s green investment plan. The agreement focuses on the raw materials used in batteries, which could massively improve the prospect of Europe’s EV industry.
EURUSD trades 0.4% lower than this time yesterday, trading around the 1.06 handle. The Euro Stoxx 50 has opened higher this morning by 0.5%USD
The Federal Reserve minutes casted a significantly dull outlook for equities, as the meeting revealed that policymakers continue to anticipate rates pushing higher, with further rate hikes through 2023. The surprise factor was that this was discussed three weeks ago, when inflationary figures hinted at disinflation. Since then, there have been several upside surprises showcasing how persistent price pressures are. The minutes also show that inflation continues to top recession risks, in the minds of the FOMC.
The dollar strengthened through yesterday by over 0.3%, meanwhile it was a mixed day for US equities as the NASDAQ and S&P500 finished 0.13% and -0.16% respectively.ASIA/PACIFIC
Singapore’s CPI inflation rose in January, although significantly less than had been forecasted. Yet as these pressures mount Singapore’s monetary authority is expected to keep its policy tight at its April meeting, especially as the prices for imported food and fuel remain high.
Bank of Korea governor Chang-yong signalled that policy makes may continue to raise rates despite pausing at today’s meeting.ILS
Israel’s foreign exchange market has been experiencing a period of uncharacteristic volatility as a political dispute of Netanyahu’s planned Judicial overhaul rages on. As of yesterday, ILS volatility was its greatest since the start of the pandemic. USDILS parred some losses as Netanyahu spoke out yesterday in defence of the Bank of Israel. USDILS trades 2.6% lower than yesterday’s highs of 3.69Data & Events
Euro-Area Jan. CPI
US 4Q GDP
G-20 Finance ministers meet in India
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