Daily Update 10/05/2023

Key Points:

•            GBP breaks to 5-month high vs EUR

•            BoE meeting tomorrow remains risk factor

•            US inflation in focus today


GBP continued its trend higher yesterday, with GBPEUR now trading at the highest level for 2023 ahead of tomorrow’s Bank of England meeting. The EUR continued to weaken following last week’s ECB meeting. USD continues to trade flat ahead of CPI data today.


GBPEUR is currently at the highest rate for five months ahead of tomorrow’s BoE meeting, and following last week’s ECB meeting. Interest rate expectations continue to be the driving factor with markets pricing in 0.65% worth of hikes by the BoE by the end of the year, versus markets reducing ECB rate expectations to 0.40% over the same period. Worth noting though that tomorrow’s BoE meeting will be a risk factor for additional gains for GBP. We expect a 0.25% hike, but the accompanying statement and forecast on inflation will be key on how the markets price in interest rate expectations and should that 0.65% be reduced then that would likely be negative for GBP.

Over to today, US inflation numbers are the focus, and given the Fed’s message of being data dependent on future rate hikes, any sign that inflation is climbing again would likely add to some gains on USD.

Equals Market Analysis– 10th May 2023

Today’s Market Rates

Today’s Interbank Rates at 09:45 am against GBP movement.

GBP>EUR – 1.1527

GBP>USD – 1.2627

EUR>USD – 1.0954

GBP>CAD – 1.6909

GBP>AUD – 1.8697

GBP>SEK – 12.897

GBP>AED – 4.6361

GBP>HKD – 9.8940

GBP>ZAR – 23.708

GBP>CHF – 1.1245

Today’s Speeches

•    EUR – ECB Muller, Centeno


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