UK's trade performance falls to worst ever on record highlighting the economic effects of Brexit. Shekel trades at weakest level in 2 years.
July 1, 2022
GBP/USD 1.2097 GBP/EUR 1.1591 EUR/USD 1.0436 USD/CAD 1.2928 EUR/CHF 0.99857 EUR/SEK 10.7527 EUR/NOK 10.3766 EUR/DKK 7.4381 USD/ILS 3.5201 AUD/USD 0.6807 NZD/USD 0.6177 USD/SGD 1.3936 USD/JPY 135 USD/CNH 6.7161 USD/INR 79.105 EUR/ILS 3.6754 GBP/ILS 4.2595 USD/ZAR 16.4053
Tensions are growing between Downing Street and UK regulators over Boris Johnson’s flagship post-Brexit reform of the insurance sector, which aims to unleash an “investment big bang” in British infrastructure. Johnson has suggested that insurance companies will put billions of pounds into infrastructure, including green energy schemes, after the overhaul.
The UK’s current account deficit was calculated at 8.3% of GDP in the first quarter of 2022, a deterioration from an average of 2.6% across 2021 and the worst level since records began, placing more pressure on the pound, and further highlighting the economic impact of Brexit.
GBPUSD trades down 1.63% since the start of the week, sitting in the 1.21 region as we print.EURECB's Holzmann said he would have preferred earlier rate hikes out of the ECB. He further stated that it may take “some time” to get back to the ECB’s inflation target, and that they “won’t reach 2% tomorrow or the day after tomorrow, but in a foreseeable timespan.” When commenting on recession fears, Holzmann noted that though unlikely for now, it would be temporary and economies are well prepared.
EURUSD whipsawed yesterday hitting lows of 1.0383 and highs of 1.0484, however trades down 0.92% this week.USDUS 10-year treasury yields broke below 3%, in a fourth day of declines and looked set for their biggest weekly drop in seven weeks, as concerns continued to mount that Federal Reserve rate hikes will lead to a recession. The latest lag comes after Powell stated Wednesday that the risk of harm to the economy from higher rates was less important than restoring price stability.
The dollar dipped off highs of 105.50, however still trades up 1% since the start of the week.ASIA/PACIFICAsian equities declined due to concerns about an economic downturn amid tighter monetary policy. The Nikkei, Hang Seng and CSI fell 1.73%, 0.62%, and 0.41% respectively.ILSILS continued loosing strength throughout the week, with the shekel falling 3.84% against the USD this week, to the weakest level since May 2020.
Israeli lawmakers votes to dissolve parliament and hold new elections on Nov. 1.Data & EventsFrance - June PMI
Germany - June PMI
Euro-area - June PMI, CPI
UK - consumer credit, mortgage approvals, money supply
UK - June PMI
Italy - CPI
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.
By providing your email address and clicking on the Subscribe button below, you consent to receive emails from Silicon Valley Bank for your chosen categories. You also consent to the terms of our Privacy Notice. If you have privacy questions, you may contact us at PrivacyOffice@svb.com. You can withdraw your consent at any time.
Thank you for subscribing to SVB's Daily FX Update.
You're almost done. Please check your email box and follow the instructions to confirm your subscription. If you did not receive an email please check your Spam or Bulk E-Mail folder just in case the confirmation email got delivered there instead of your inbox. If so, select the confirmation message and mark it Not Spam, which should allow future messages to get through. Please add us to your trusted list of senders, contacts or address book.
Please note that we will continue to send you communications that we need to send you (for example, to keep you updated on operational changes to your account, a product or a service) or that we are required to send you by law.
© 2022 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.