Key Points:
• BoE hikes by 0.25%
• UK economy growth slows
• Debt ceiling talks cause safe haven demand
Recap:
GBP largely declined yesterday following the BoE meeting. There was a unanimous 7-2 vote to hike by 0.25%, as well as upwards revision on GDP and willingness to hike rates further should there be inflationary pressures. Some could call this hawkish, however, similar to the Fed and ECB last week, there was no conviction in dictating future rate policy and consequently GBP largely declined with markets shaving 5bps off peak interest rates for this year. The weakness yesterday suggests markets booking profits on the recent gains for the currency and this could continue in the short term, but doesn’t necessarily mean there will be negative sentiment on GBP over the medium term. Over in the US, data continued to add to odds of rate cut bets by the Fed beginning as early as July, after producer inflation numbers came in lower and the weekly jobless claims figures rose to the highest since October 2021. However, the USD gained yesterday across the board on safe-haven demand.
Markets
UK GDP numbers this morning showed economic growth slowed as expected to 0.1% in the first quarter, down from 0.6% in the fourth quarter. GBP is up slightly this morning. Data points are thin on the ground today with markets likely to be cautious going into the weekend, with debt ceiling talks continuing. Any safe-haven demand should support USD. Have a good weekend all.
Equals Market Analysis– 12th May 2023
Today’s Market Rates
Today’s Interbank Rates at 10:58 am against GBP movement.
GBP>EUR – 1.1480
GBP>USD – 1.2527
EUR>USD – 1.0909
GBP>CAD – 1.6901
GBP>AUD – 1.8736
GBP>SEK – 12.901
GBP>AED – 4.5992
GBP>HKD – 9.8240
GBP>ZAR – 24.196
GBP>CHF – 1.1183
Today’s Speeches
• USD – Fed Daly
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