Daily Market Update 18/05/2023

Key Points:

•            US dollar continues to gain

•            Euro weakens on easing of inflation

•            Optimism building over debt ceiling talks


The theme for this week continues of weakness on the EUR with EURUSD now at 6-week lows, and GBPEUR back near 5-month lows after month-on-month inflation in the single-bloc dropped from 0.7% to 0.6% in April.

The USD index is now at the highest since the end of March, with 2-year treasuries continuing to climb after housing starts numbers came in higher than expected. Optimism increased in the debt ceiling talks after both President Biden expressed confidence on reaching a deal, and House Speaker Kevin McCarthy suggested reaching a deal this week was ‘doable’.

Early this morning there were unexpected job cuts in Australia, as well as the unemployment rate increasing up to 3.7% keeping the case alive that the RBA should hold interest rates where they are for the time being. GBPAUD gained initially but gave up gains swiftly after.


Market themes remain relatively the same with the USD continuing to be in demand on the back of data suggesting a more resilient economy, and the EUR weakening with lower inflation and economic sentiment in Germany. Today’s focus will be on speakers from the BoE and the Fed as well as the jobless claims numbers, that last week broke out of the 250,000-claimant mark. Should the trend on jobless claims continue to rise then it would back the case by markets of seeing rate cuts by the Fed this year. However, rate cuts are largely priced into the market from the US, so if anything, should the data point come in lower, that seems more likely to have more impact on the USD, with gains over the last 8 trading days likely to continue.

Equals Market Analysis– 18th May 2023

Today’s Market Rates

Today’s Interbank Rates at 09:37 am against GBP movement.

GBP>EUR – 1.1498

GBP>USD – 1.2437

EUR>USD – 1.0815

GBP>CAD – 1.6758

GBP>AUD – 1.8744

GBP>SEK – 13.045

GBP>AED – 4.5664

GBP>HKD – 9.7380

GBP>ZAR – 24.182

GBP>CHF – 1.1198

Today’s Speeches

•    GBP: BoE Bailey and Pill

•    USD: Fed Jefferson, Barr, and Logan


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