UK economy performs better than expected, US jobless claims continue to defy anticipation of a cooling labour market.
March 3, 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 1.1988 GBP/EUR 1.1291 EUR/USD 1.0617 USD/CAD 1.3559 EUR/CHF 0.9949 EUR/SEK 11.1301 EUR/NOK 11.0444 EUR/DKK 7.4427 USD/ILS 3.6607 AUD/USD 0.6762 NZD/USD 0.6237 USD/SGD 1.3463 USD/JPY 136.34 USD/CNH 6.9094 USD/INR 81.9625 EUR/ILS 3.8866 GBP/ILS 4.3884 USD/ZAR 18.1627
BOE Chief economist Pull spoke yesterday stating that the UK economy had performed slightly stronger than expected over the past month, and that wage growth was sticker than they thought. Pills comments suggest that stronger demand than anticipated may keep inflation high, which could point to further rate hikes. Pill further mentioned that companies feel they need to increase prices not only recover costs but also boost profit margins. These comments seem more hawkish than those than came from Governor Bailey earlier in the week.
In spite of Rishi's breakthrough in relations with the EU, he is refusing to rush Britain back into the EU's 95.5 billion euro Horizon science programme. Senior officials state he is sceptical about the value of the world's largest research programme and the cost of British participation. Although Britain was expected to 15 billion for the full 7 years, the sides must now agree on how to handle this going forwards.EUR
The euro slipped 0.6% against the dollar yesterday as markets continue to digest the weeks fundamental data. CPI for the Euro Area slowed less than the 8.3% forecast, printing at 8.5% YoY, whilst the core figure surged to a record high, reinforcing speculation that the ECB will have to continue raising rates. Despite hawkish rhetoric historically boosting the single currency, sentiment appears to be waning, as unemployment also failed to match forecasts remaining unchanged at 6.7%, highlighting areas of key economic concern.
Comments from Christine Lagarde reinforced expectations of further rate rises, citing that hikes may need to continue beyond the planned 50bps move this month. Meeting minutes released later in the day showed ECB members are not concerned about “overtightening” and that there is continued value in “frontloading rate hikes”, as core inflation remains prominent.USD
US jobless claims continue to defy expectations that the labour market is cooling. Jobless claims dropped once again highlighting the reluctance of business to release workers outside of specific sectors (i.e.: tech).
The appointment of Federal Reserve board members has become increasingly politically charged since the Trump era. As partisan divides deepen in Washington, it is something that the Biden administration will be concerned with, as any nominations must be approved by the Senate. It is likely that the white house will try to replace Brainard with a like-minded voting member.
The dollar slipped away from highs of 105.2 yesterday, currently trading around the 104.7 mark. US equities advanced slightly through yesterday with the NASDAQ closing 0.73%.ASIA/PACIFIC
Inflation in Tokyo decelerated for the first time in more than a year. CPI excluding fresh food slowed to 3.3% in February from 4.3% in January. Japan’s jobless ate edged lower to 2.4%.
Malaysian PM warned that a US military presence in the south China sea could escalated tensions between China, and other claimants.ILS
Economist have warned the political crisis in Israel presents a danger to Israel’s economy; this meeting occurred at Tel Aviv university on Thursday night.Data & Events
UK Feb PMIs
Euro-Area Jan. PPI
US Feb PMIs and ISM Services Index
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.