Daily Market Update 28/09/2021


Sterling is stronger versus the euro and weaker against the dollar this morning. Bank of England Governor Andrew Bailey moved to reinforce the option that interest rates could rise as early as this year while cautioning about the limits of monetary policy to balance diverging forces in the UK economy. Sir Keir Starmer was faced with dissent at the Labour party’s annual conference on Monday as a member of the shadow cabinet resigned, and delegates defied the leadership’s line on two foreign policy issues. More than 65 hospitality leaders, including the Savoy and Soho House, have warned the UK government that the sector is “close to imploding” under the strain of acute labour shortages.

The euro is lower against most major currencies overnight. The Greens and the liberal Free Democrats – who hold Germany’s balance of power after Sunday’s historic vote – said they would start talks to decide who they want to join in government after the Social Democrats’ narrow election win. The EU’s top trade and digital officials have landed in the US ahead of tomorrow’s inaugural Trade and Technology Council with the Biden administration. France has demanded last-minute changes to a draft joint statement the bloc will adopt at the meeting, designed to pave the way for more transatlantic co-operation in areas of strategic interest.

The dollar is higher against most majors in the early morning trade. Two regional Federal Reserve presidents – Boston Fed chief Eric Rosengren and Dallas’s Robert Kaplan -are retiring following embarrassing revelations of stock trading last year. Jerome Powell will testify on the Fed’s economic response to the pandemic before a Senate panel today. Elsewhere, Congress Democrats are considering a plan that would require banks to report accounts with at least $10,000 to the Internal Revenue Service – well above the Biden administration’s proposed $600 threshold – while also exempting some common transactions from the law.

Ballinger & Co. Morning Report– 28th September 2021

Today’s Rates
GBP>EUR – 1.1667
GBP>USD – 1.3624
GBP>CHF – 1.2645
EUR>USD – 1.1678
GBP>CAD – 1.7233
GBP>AUD – 1.8800
GBP>SEK – 11.898
GBP>AED – 5.0037
GBP>HKD – 10.599
GBP>ZAR – 20.590

Today’s Calendar
• AUD Retail Sales s.a. (MoM)(Aug)

Today’s Highlights
• USD: Index Price Analysis: Attention shifts to 94 and beyond.
• ECB’s Villeroy: Inflation forecast justifies keeping loose policy.
• China: Evergrande unlikely to trigger global crisis but must watch for impact on China – ADB
• EUR>GBP Price Analysis: Stays pressured towards 0.85 (1.1764), teases bearish cross.

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