Good morning,
GBP has fallen off against all major currencies with a 1.1% fall against USD and 1% off against the EUR in the last week. We have the Bank of England’s policy meeting on Thursday where we will have the decision on whether the bank will hike rates or hold at 0.1%. Just last week GBP-EUR hit 1.19 and now we are down at 1.1750; GBP-USD has followed the same pattern. The market has been pricing in a rate hike to 0.25% which has potentially over inflated GBP. The fall off suggests investors are shifting their expectations of a rate hike this week.
Later today we have the Federal Reserve’s interest rate decision. The US dollar has been on a good run and could continue if we get a hawkish tone from the Federal Reserve. The hikes are not expected to start until 2022, combine this with murmurs of an end to quantitative easing next year and we could see EUR-USD push below 1.15.
In other news there could be signs that the supply-chain snags are starting to ease. GXO Logistics Inc are starting to see more goods arrive at its facilities. As they are the world largest contract logistics provider it is worth taking note. Let’s hope container prices get back to some normality sooner rather than later.
Have a great day.
Josh Saunders, Senior Relationship Manager.
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