Daily Market Update 17/02/2023

“The US Dollar has been gaining strength against other currencies, with the US Dollar Index reaching its highest level since early January. This has been supported by positive economic data and comments from Federal Reserve officials who have expressed a more hawkish stance. As there are no major data releases expected, investors will be closely monitoring speeches from Fed officials Barkin and Bowman leading up to the weekend.”

Main Headlines

New York City’s John F. Kennedy International Airport has confirmed that one of its terminals will be closed today as a result of electrical issues, with both inbound and outbound flights affected. The disruption has hit one of the world’s busiest airports, with officials working to redirect affected flights to other terminals, following the power outage that began yesterday. As a result, some flights scheduled to arrive at JFK were rerouted to other East Coast airports, according to the airport’s website.

NatWest’s pre-tax earnings in 2022 have surged to £5.1bn, marking its highest profit since the bank almost collapsed and was forced to take a £45bn taxpayer bailout at the height of the global financial crisis. The lender has increased its banker bonuses, following a surge in loan and mortgage charges for its borrowers. The UK government still owns 46% of NatWest. This is the first time the bank has recorded a higher profit since 2007 when its earnings hit £10bn.


European shares opened nearly 1% lower this morning due to renewed bets that the US Federal Reserve would maintain its monetary tightening path, impacting rate-sensitive technology shares. On the other hand, Mercedes-Benz and Sika shares rose, buoyed by strong earnings. The pan-European STOXX 600 index slid 0.9%, with technology shares tumbling 1.8%. In the US, Wall Street ended lower yesterday following unexpectedly strong inflation data and a drop in weekly jobless claims, leading to fears that the US Federal Reserve would continue to raise interest rates in an attempt to contain rising prices.


Sterling is weaker than most major currencies in the early morning trade. Official figures have shown that UK shop sales volumes unexpectedly rose by 0.5% in January after falling in December, although sales dropped 5.1% compared to January of last year. Rising prices, particularly due to energy costs, have placed pressure on millions of households. Although the rate of inflation is starting to ease, at 10.1% it remains near a 40-year high. Online shops were boosted by January sales promotions, according to the Office for National Statistics (ONS)


Euro is stronger against sterling and weaker against the dollar this morning. ECB Governing Council member Gabriel Makhlouf has warned that the bank still has some way to go to sustainably return inflation to its 2% target, with the ECB’s independence and credibility ultimately at stake. The bank has embarked on its steepest ever run of interest rate hikes in a bid to fight inflation, with more hikes expected in the coming weeks and months. Earlier this week, Makhlouf said that the ECB could raise rates to above 3.5% from the current 2.5% and would likely not cut them again this year.


The dollar is well bid against most major currencies overnight. This morning, the US dollar rose significantly to reach a six-week high against a basket of currencies as the release of robust economic data from the US lifted market expectations of an increase in interest rate hikes. The latest data showed that the number of new claims for unemployment benefits dropped unexpectedly last week, while monthly producer prices recorded the biggest increase in seven months in January. As a result, the US dollar gained strength, causing the sterling, euro, and Japanese yen to hit fresh six-week lows this morning.

Ballinger & Co. Market Analysis– 17th February 2023

Today’s Market Rates

Today’s Interbank Rates at 10:22am against sterling movement.

GBP>EUR – 1.1219

GBP>USD – 1.1933

EUR>USD – 1.0637

GBP>CAD – 1.6125

GBP>AUD – 1.7492

GBP>SEK – 12.570

GBP>AED – 4.3821

GBP>HKD – 9.3640

GBP>ZAR – 21.767

GBP>CHF – 1.1129

Today’s Highlights

·        8:00 a.m.: UK Jan. Retail Sales

·        8:00 a.m.: Sweden Jan. Unemployment

·        8:45 a.m.: France Jan. CPI

·        12:30 p.m.: ECB’s Villeroy speaks

·        2:30 p.m.: US Jan. Import Price Index

·        2:30 p.m.: Fed’s Barkin speaks

·        2:45 p.m.: Fed’s Bowman speaks

·        4:00 p.m.: US Jan. Leading Index

·        5:00 p.m.: Russia 4Q GDP


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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