• Home
  • Blog
  • Markets await UK & US interest rate decisions | Excel Currencies

Markets await UK & US interest rate decisions

A very busy week ahead for financial markets with huge economic events being released by the majors..

Yes the Pound lost value last week, but it was rather negligible as it fit within the usual weekly market swings we generally see. This week will matter though if Sterling falls again, not only on a trend basis, but on a value basis also. 

Wednesday-Friday, the UK releases key data daily that will create volatility and so this is a real 'risk-week' for the UK/GBP. First up is UK inflation. Both the core and headline figures are expected to fall by at least 0.4%, after being stale for the last 3-months. This may cause £ weakness if economists have got it right. 

Thursday sees the UK release PMI's in the morning and then the interest rate decision and press conference thereafter. The PMI's have been positive since October and no change is expected this time round and so the £ may strengthen. No change in UK interest rates are expected this month, but the stance from the BoE may create volatility either way. 

Lastly, retail sales released on Friday is anyone's call as the last 3-months have been wildly inconsistent. All-in-all, a very tough week to predict for the Pound..

It's another quiet week for the Euro-Zone with only the PMI's released on Thursday being the only real thing of note. Similar to the UK, the last handful of months have been positive and so we may see the Euro strengthen here, but otherwise the single currency will be moved by events elsewhere.

The Fed's press conference Wednesday evening after its interest rate decision, is arguably the most important event of the week. This is because money markets believe the US will be the first major economy to cut interest rates since the pandemic subsided. 

It's a flip of a coin really what the Fed says on Wednesday, but expect to see volatility either way. How strident the Fed sounds on the need to keep rates steady, will be of particular interest and therefore poses a risk to anyone involved in the USD..