Blog


18/08/2022 – Exchange Rates

  • Posted by currencies in Rate Alerts
  • August 18, 2022
  • No Comments

Inflation in The UK has again reached new highs, climbing to 10.1% in July mainly contributed by an increase in prices for food and fuel. Expectations for inflation hitting double figures have come much earlier than the initial time-frame of October, and is also the first time since February 1982 that inflation has been in double figures. The biggest increase saw price rises for bread, cereal, dairy, meat, vegetables and many more household goods. Package holidays and air fares also rose sharply due to a summer rush to get away once all covid rules had been lifted. With inflation set to climb potentially as high as 15%, this leaves The Bank of England with no choice but to keep on hiking interest rates, and more aggressive than previously, with a further 100 bps worth of hikes expected by the end of the year.

First up this morning, focus turns to the inflation release for The Euro-Zone. Forecasts suggest inflation will climb to 4%, up from 3.7% in June with The Euro-Zone also struggling to contain rising inflation as they face an energy crisis off the back of reduced fuel supply by Russia. The European Central Bank raised rates by 50bps last time out, so any major increase in inflation will no doubt put the central bank under pressure to look at further rate hikes moving into the end of the year. In terms of impact on the currency, this will come down to how much higher or lower inflation actually is compared to the current projections.

Heading into the afternoon we have weekly jobless data for The United States, with members of The Federal Reserve stating the current strength in the labour market suggests that economic activity is stronger than what the 2nd quarter growth figures portrayed. These releases along with inflation, wages and Non-Farm Payrolls will nonetheless be closely watched by the central bank as they gear up for another rate hike in September. Markets are currently pricing in a 50bps hike at 57.5%.

GBP/EUR 1.1853 GBP/USD 1.2057 GBP/AED 4.4230
GBP/AUD 1.7328 GBP/CHF 1.1497 GBP/CAD 1.5540
GBP/NZD 1.9175 EUR/USD 1.0156 GBP/ZAR 20.024

Leave a Reply

Your email address will not be published.

What's Going On?

Currencies 4 You Ltd is a company registered in England and Wales (registered no. 06866898). Registered office: Regus House Victory Way Admirals Park, Crossway, Dartford, Kent, DA2 6QD. Currencies 4 You Ltd Payment and Foreign Currency Exchange Services are provided by Currency Cloud Limited and Equals Connect Limited. Currency Cloud Limited. Registered in England No. 06323311. Registered Office: Stewardship Building 1st Floor, 12 Steward Street London E1 6FQ. The Currency Cloud Limited is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 for the issuing of electronic money. FCA registration number: 900199. Payment Services are provided by Equals Connect Limited, registered in England and Wales (registered no. 07131446). Registered Office: Vintners’ Place, 68 Upper Thames St, London, EC4V 3BJ. Equals Connect Limited are authorised by the Financial Conduct Authority to provide payment services (FRN: 671508). Payment services for Currencies 4 You Ltd are provided by Sciopay Ltd. Sciopay Ltd is a company incorporated in England & Wales. Registration No: 12352935. Sciopay Ltd is licensed and regulated by HMRC as a Money Service Business (MSB). Licence No: XCML00000151326. Sciopay Ltd is authorised by the Financial Conduct Authority as an Authorised Payment Institution. Firm Reference Number: 927951. | Terms and Conditions | Privacy Statement | Careers