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  • richard evans

USD up on higher US inflation expectations

Good morning


The US dollar has had a bit of a push higher, with GBPUSD dropping to 1.2445 overnight (now 1.2475) and EURUSD hitting a low of 1.0845 (now 1.0870). USDJPY meanwhile pushed up to 136.20 early this morning, now sits 135.95. A higher reading from the Michigan inflation expectation Friday seemed to be the catalyst for the move, perhaps casting some doubt as to whether the time is right for the Fed to pause its rate rise cycle. We hear from a few Fed officials today, will be interesting to see what their feelings are on the matter. Recent comments have been reasonably hawkish.


The GBP decline came after last weeks BoE rate rise. Both USD and EUR had lost ground after their central banks tightened, now it se4ems to be GBP’s turn. GBPEUR had been up at 1.1545 last week, traded as lost as 1.1450 after the BoE rate rise, now sits 1.1480. Remember this 1.1460/70 area had capped the upside for some time, it looks like it could be turning into quite a pivotal level. We are holding above there for the time being.


USDTRY and EURTRY are up at 19.64 and 21.45 respectively as we await the final results of the Turkish elections. At the moment it looks as though Erdogan is ahead but with not quite enough of the vote to win outright, which would lead to a second election in two weeks time. He’d need 50% to win outright, BBC are reporting he currently has 49.49%. I’d be surprised if he doesn’t find the extra 0.51% but that’s just me being a bit sceptical about the democratic process there.


Ukraine’s Zelensky is in the UK to meet Sunak, his fourth stop on a brief topur of Europe having been in France, Germany and Italy already. His visit comes soon after UK announced it would be providing Ukraine with longer range missiles that will help Ukraine hit targets while staying far from Russian defences. Ongoing talks of more sanctions on Russia by the West although it is difficult to work out whether these have any lasting effect.


Arsenal seem to have blown their chances of a premier league title having lost to Brighton over the weekend although to be fair the damage had already been done after failing to beat Southampton and West Ham back in April, then drawing against Liverpool having been 2-0 up. Still, coming second to Man City isn’t anything to be ashamed of. Spurs on the other hand have plenty to be ashamed of. Going to be an interesting time for them, need to find a new manager who can rebuild the team and set them back onto winning ways for next season. Surprisingly I’ve not yet had the call…..


Good luck to anyone who has kids sitting GCSEs and A Levels which start this week. It’ll be a tough time for many. I have one who I’ll be having to stop from doing too much work and one who I’ll have to push to do any. No middle ground here. Anyway, best wishes to all, I hope it all goes smoothly and with the minimum of fuss and stress.


- 10.00 EU industrial production, growth forecasts

- 13.45 Feds Bostic speaks

- 14.15 Keds Kashkari speaks

- 17.30 Feds Barkin speaks

- 22.00 Feds Cook speaks

- 02.30 RBA minutes

- 03.00 China retail sales, industrial production

- 07.00 UK unemployment



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