Stock’s retreat as US rate expectations rise, Sunak has surprise visit to Northern Ireland as hopes rise on EU-UK deal.
February 17, 2023
Rates 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.
GBP/USD 1.1929 GBP/EUR 1.1209 EUR/USD 1.0642 USD/CAD 1.3518 EUR/CHF 0.9902 EUR/SEK 11.2103 EUR/NOK 10.9958 EUR/DKK 7.4457 USD/ILS 3.5683 AUD/USD 0.6827 NZD/USD 0.6206 USD/SGD 1.3399 USD/JPY 134.91 USD/CNH 6.8934 USD/INR 82.8369 EUR/ILS 3.7974 GBP/ILS 4.2568 USD/ZAR 18.2907
Rishi Sunak faces backlash from Eurosceptics after his surprise visit to Belfast to rally support from the Northern Irish parties for a deal in Brussels. Sunak's attempts to resolve a two-year dispute over the trade region has come under scrutiny with some warning he is going too far to accommodate the EU.
UK retail sales rise unexpectedly following January discounting. The volume of goods sold rose 0.5% in January, after a 1.2% decline in December - this was higher than the 0.3% rise expected. This data suggest that consumers are managing the cost-of-living crisis better than anticipated. ONS figures show however that sales are still 1.4% below pre-pandemic levels.
BOE economist Pill said on Thursday that policy makers must remain vigilant against inflation, however hinted the pace of hikes may slow.
GBPUSD dipped a little further on the news however, sitting down 1.18% this week in the 1.1920 region as we print. GBPEUR also declined sitting just above 1.1200 down 0.78% this week. The FTSE has dipped 0.51% since the open.EUR
Isabel Schnabel one of the ECB’s most senior officials have said that investors risk underestimating inflation. She sees inflation remaining persistent and states that the ECB are still “far away from claiming victory”. She still sees significant upside risk in price pressures and was skeptical of the market’s opinion that inflation will fall quickly to the 2% target.
The euro has shed value trading near the 1.064 handle, having fallen from above 1.07 through yesterday. European equities have opened lower across the board.USD
US initial jobless claims continue to point to extremely low numbers of layoffs. Despite this, continuing claims are gradual increasing which suggests that it’s taking longer for people to renter the workforce. At 194,000, this was fifth straight week below 200,000.
January’s PPI rose above the consensus, erasing last month’s decline. This has moderated the market’s expectations for disinflation over the coming year. Although primarily driven by energy, this paired with advancing Core CPI and retail sales suggests that the Federal Reserve will keep rates higher for longer.
Yesterday, the dollar rallied on comments from FOMC member Mester, who saw a compelling case for a 0.5% hike at the last Fed meeting. The dollar climbed 0.6% through yesterday, with the Dollar spot index surging above 104.ASIA/PACIFIC
Asian shares fell with the Nikkei, Hang Seng and CSI printing down 0.66%,1.28% and 1.44% respectively.
Kazuo Ueda's nomination and BOJ chief is promoting investors to reassess Japan's future monetary policy - 70% of economists expect the central bank to tighten in July, up from the 54% forecast beforehand. The BOJ Executive Director Uchida announced that the BOJ will launch a pilot program for a central bank digital currency in April.ILS
USDILS soared above 3.55, following some unexpected USD strength through yesterday. This dollar has continued to make gains against the shekel this morning trading 0.6% higher intraday above 3.56.Data & Events
US Jan. Import Price Index
US Jan. Lending Index
Fed’s Barking/Bowman speak.
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.