Daily FX Update

  • March 9, 2023

UK economy to avoid recession, Fed's Beige Book shows uneven impact of rate hikes, Euro-Area rate expectations rise.

  • FX Rates
    March 9, 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.
    Source: Bloomberg

  • GBP

    According to the British Chambers of Commerce, the UK will avoid a recession this year, but sluggish growth means the economy will not recover to pre-pandemic levels until the final quarter of 2024. 

    Jeremy Hunt is preparing to use next week's budget to wave of criticism of Britain's falling status in the UK economy including new tax reliefs to encourage companies to invest. Some MPs are calling for him to soften the planned rise in corporation tax. Britain's biggest investors however fear that Hunt is poised to delay the crucial tax break until the autumn in a move that would put a wave of private sector spending at risk. The Chancellor is further planning to reform pension tax rules in a bid to cut the number of doctors quitting the NHS.

    Some experts have stated that the UK’s trade agreement with the European Union could be immediately terminated if the British government quits the European convention on human rights over the issue of stopping small boat crossings across the Channel. 

    It is reported that Britain is planning to loosen foreign worker rights in order to tackle the chronic labor shortages, beginning with the construction sector, although this isn't expected to be enough to fill the 1.2mn vacancies.

    GBPUSD remained at subdued levels following Tuesday's dip with the pair continuing the trade below the 1.1900 handle. Cable sits in the 1.1865 region as we print down 1.41% this week. GBPEUR sits in the 1.1240 region as we print down 0.75% this week. The FTSE opened in the red down 0.55%.


    EURUSD continues to trade in a narrow range either side of the 1.0550 level, as moves are limited in the absence of surprising fundamental data prints and repetitive hawkish rhetoric from both the Fed and ECB. Year on Year GDP from the Euro Area printed marginally below expectations at 1.8%, down from the previous figure.

    Further comments from ECB officials spurred expectations for a 4% peak in interest rates later in the year, with Bank of France Governor Villeroy citing that bringing inflation back to the 2% target is “a commitment, not just a forecast.” Some officials however have not been as forthcoming, with the Bank of Italy policymaker Visco rebuking some of his colleagues, suggesting comments on forward guidance are not appreciated, and decisions will be made “meeting by meeting”.

    Stocks slipped as markets digest the risk of more aggressive rate hikes, with the Stocks Europe 600 down 0.3%


    The Federal Reserve’s beige book has showed uneven activity across districts, with half of district seeing no change in economic activity whilst some are seeing a modest expansion. This sheds light on the murky economic this year and shows the difficult decision facing the Fed as the impact of rate hikes may be felt differently across the US.

    The January Jobs JOLTS report shows that the labour market remains tight despite tightening. The number of job openings did fall by 400,000 in January, however the number of jobs opening for every unemployed worker is still healthy at 1.9. This ratio highlights the further robustness in the labour market as people still find it very easy to renter the workforce.


    Israel prepares for another day of protests the governments Judicial overhaul, this comes despite comments from the Israeli president that a compromise was on the table.

    Data & Events
    US Initial Jobless Claims
    EU Trade ministers meet

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