Daily Market Update 18/01/2023

“Cable extended its sustained rally to a new five-week high, despite softer than expected UK inflation figures this morning. Data showed the UK Consumer Price Index eased to 10.5 per cent year-on year, in contrast to 10.6 per cent anticipated. The BoE’s rate-hiking bias earlier in the week could be the reason behind this upside move. All eyes are on US retails sales and US PPI data later today.”

Main Headlines

Donald Trump has issued a warning to Ron DeSantis if the Florida Governor decides to run against him in the 2024 presidential race. The former president also continued to sound off on his Truth Social platform on Monday about the parallel investigations into the discovery of a large trove classified materials at his Mar-a-Lago home and the discovery of a small number of classified documents from President Joe Biden’s time as vice president at his home and an office he once used. Meanwhile, former New York City mayor Rudy Giuliani has spoken out to reveal that Mr Trump once advised him to take secret documents home with him.

Jeremy Hunt is planning a “slimmed down” spring budget with no immediate tax cuts as the Conservatives press ahead with attempts to win back economic credibility after the damage inflicted by the Truss administration. Treasury insiders said the chancellor was not expected to announce any tax cuts in his fiscal statement this March as his focus was wholly on getting the economy back on a steady footing and the public finances were tight. They said that boosting growth, bringing down inflation and reducing national debt were the government’s top priorities as it seeks to restore confidence among business and the public, and only then could taxes be reduced.


European markets were mixed this morning as uncertainty persisted on the economic outlook, a topic high on the agenda at the World Economic Forum in Davos this week. The pan-European Stoxx 600 index was fractionally higher in early trade. Travel and leisure stocks added 1.1% while chemicals dropped 0.6%. Elsewhere overnight, Asia-Pacific shares traded mostly higher even as the Bank of Japan announced no change to its yield curve control policy, while US stock futures were slightly higher this morning.


Sterling is stronger against the dollar and weaker against euro this morning. UK inflation eased on the month, in line with economists’ expectations, as fuel, clothing and recreational costs dragged down the index. Inflation softened to 10.5% in December, down from the 10.7% of November, the British Office for National Statistics said this morning. The core CPI, which excludes food, energy, alcohol and tobacco, was steady on the month at 6.3% in December, the ONS found. The agency said the largest downward contribution came from the transport, clothing and recreation sectors, offsetting hikes in housing and household services, food and non-alcoholic beverages.


Euro is well bid against most major currencies overnight. The European Union is ramping up its preparedness for possible chemical and nuclear emergencies as Russia’s invasion of Ukraine nears the one-year mark with a stockpile of items to be set up in Finland, it was announced yesterday. A total of €242 million has been allocated to Finland by the European Commission to create the bloc’s first strategic reserve against chemical, radiological and nuclear (CBRN) threats for use by all member states. “Russia’s war of aggression against Ukraine has confirmed the need to strengthen EU CBRN preparedness,” Janez Lenarcic, European Commissioner for Crisis Management, said.


The dollar is weaker than most major currencies in the early morning trade. Wall Street is bracing for an impending fight on Capitol Hill over the federal debt limit, raising fears a showdown could send the already fragile US economy into a recession. Treasury Secretary Janet Yellen warned last week the US will hit its statutory debt limit and that unless Congress takes swift action, the government may not be able to pay its bills as early as June. The Treasury Department will begin deploying “extraordinary measures” this week to prevent the US from defaulting on its obligations. The emergency moves should give Congress until at least early June to raise or suspend the country’s current $31.4 trillion borrowing limit.

Ballinger & Co. Market Analysis– 18th January 2023

Today’s Market Rates

Today’s Interbank Rates at 09:33 am against sterling movement.

GBP>EUR – 1.1359

GBP>USD – 1.2335

EUR>USD – 1.0858

GBP>CAD – 1.6480

GBP>AUD – 1.7560

GBP>SEK – 12.727

GBP>AED – 4.5299

GBP>HKD – 9.6510

GBP>ZAR – 20.894

GBP>CHF – 1.1281

Today’s Highlights

·        8:00 a.m.: UK Dec. CPI

·        9:00 a.m.: South Africa Dec. CPI

·        10:15 a.m.: ECB’s Villeroy speaks at Davos

·        10:30 a.m.: UK Nov. House Price Index

·        11:00 a.m.: Euro-Area Dec. CPI

·        1:15 p.m.: ECB’s Villeroy speaks at Davos

·        2:30 p.m.: US Dec. PPI, Retail Sales

·        3:15 p.m.: US Dec. Industrial Production

·        4:00 p.m.: US Jan. NAHB Housing Market Index

·        Fed releases Beige Book


This document has been prepared solely for information and is not intended as an Inducement concerning the purchase or sale of any financial instrument. By its nature market analysis represents the personal view of the author and no warranty can be, or is, offered as to the accuracy of any such analysis, or that predictions provided in any such analysis will prove to be correct. Should you rely on any analysis, information or report provided as part of the Service it does so entirely at its own risk, and Frank eXchange Limited/Manor House Foreign eXchange Limited accepts no responsibility or liability for any loss or damage you may suffer as a result. Information and opinions have been obtained from sources believed to be reliable, but no representation is made as to their accuracy. No copy of this document can be taken without prior written permission.


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