USD has had a strong week against GBP. Jerome Powell spoke earlier in the week and mentioned the importance to measure inflation levels. This was seen as a little more hawkish tone than the previous weeks Federal Reserve meeting. These comments from Powell, saw traders indicating a more bullish USD forecast, at least in a short-term. During this week, we have also seen several speeches from Presidents and Prime Ministers addressing the situation between Ukraine and Russia. The markets have processed the comments as uncertainty of the situation and leading to a shift in traders risk appetite and leaning to safe-haven currencies like the USD.
In the late morning, we have a speech from ECB President Christine Lagarde. EUR has been flat during this week and if we could notice any changes in ECB’s stance on their forward guidance this could lead to movements for EUR pairs. What’s likely to happen though, is that ECB will continue their neutral view on interest rates and not forcing market fluctuations.
The afternoon is heavy from the US with a bundle of PCE, personal income and personal spending being released. Expectations for PCE index month-on-month is a small uplift from 0.2% to 0.3%. With Federal Reserve gauge inflation readings, if we see a stronger uplift – we can see USD strength of the back of this. Bear in mind that at the same time personal income and spending will also be announced. Expectations is that income will decrease from 0.4% to 0.3% and spending staying flat at 0.5%. These readings will be of high importance too, as the US job market has been falling and ahead of next weeks ADP and non-farm payroll, it might paint a picture of how the US job market is going to continue performing.
GBP/EUR 1.1420 GBP/USD 1.3343 GBP/AED 4.9024
GBP/AUD 2.0447 GBP/CHF 1.0666 GBP/CAD 1.8615
GBP/NZD 2.3171 EUR/USD 1.1666 GBP/ZAR 23.2990