GBPUSD tumbles following BoE decision. US Equities tumble on inflation and growth fears.
-
FX Rates
May 6, 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 1.2298 GBP/EUR 1.1717 EUR/USD 1.0497 USD/CAD 1.2867 EUR/CHF 1.0336 EUR/SEK 10.5015 EUR/NOK 10.0293 EUR/DKK 7.4401 USD/ILS 3.4119 AUD/USD 0.7071 NZD/USD 0.6402 USD/SGD 1.3876 USD/JPY 130.41 USD/CNH 6.7163 USD/INR 76.9025 EUR/ILS 3.5816 GBP/ILS 4.1961 USD/ZAR 16.1147
-
GBP
GBPUSD plunged yesterday, following the BoE decision. Despite raising rates, the meeting was collectively viewed as a bearish meeting, with the BoE openly signalling the high likelihood of a recession. Economic forecasts were slashed amid peaking inflation and slowing growth. GBPUSD fell from 1.257 to 1.236. The downward trend has continued this morning, trading down -0.66% to a low of 1.2280.
Early results in UK Local elections have shown resentment from Voters towards Boris Johnson’s Conservatives. They’ve lost several landmark London boroughs in what could add further pressure to Johnson’s tenor in Downing St.
The UK set out plans to regulate the tech industry but stopped short of providing the new regulator with any teeth to enforce these laws. The new watchdog, the Digital Markets Unit will be tasked with enforcing competition rules.
EURAccording to ECB Holzmann, the ECB are set to discuss a rate increase at its June meeting and is likely to decide on one hike. This comes as reports from the Spanish Economy Minister confirmed they believe the peak of inflation has passed.
Viktor Orban has said the EU is at risk of fracturing its unified front against Russia, if it continues to push its proposals to ban Russian oil. The proposal has seen disunity as several countries rely much more on Russian energy than other members of the bloc.
USDUS equities tumbled yesterday, with the NASDAQ dropping -5%. Markets fear the impacts of an aggressive tightening cycle from the Fed, which could push the US economy towards a recession. Markets are beginning to doubt Fed claims that a ‘soft landing’ is still possible. BoE Bailey’s comments also spurred fears that the recession outlook in the UK could be mirrored across the Atlantic.
Former Fed Vice Chair, Richard Clarida has stated that the Fed will need to raise rates to at least 3.5% to tame surging inflation, claiming that hiking to the neutral rate, will not be enough.
ASIA/PACIFICAsian stocks slid following global growth concerns. The RBA may raise rates further as unemployment is forecasted to drop to the lowest level since 1974, and both headline and core inflation remain above target.
ILSUSDILS gained 2% yesterday to trade above 3.4100 for the first time since November 2020. The pair has followed a strong uptrend over the last month, gaining 5.74% since the 11th April.
Data & EventsBoE speakers – Pill, Tenreyro
ECB speakers – Rehn, Villeroy
Spain Industrial Production
US Non-Farm Payrolls.
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. |