Market Report: GBP, EUR, and USD Analysis of the Week

Market Report 20/03/23 - 24/03/23

Key Points

• BoE Interest rate decision
• S & P Global Composite PMI out for the Eurozone
• Fed Interest rate decision

GBP

Last week we had the unemployment figures, this saw the result of 3.7%, we also had Jeremy Hunt’s Spring Budget, this covered key points such as the UK’s inflation levels expected to drop to 2.9% by the end of the year, we also were told that the UK will avoid recession in 2023, but the economy will shrink by 0.2%. This week we have the BoE’s interest rate decision, it is expected to rise by 25bps, this a smaller than hoped rise, if we see a rise in the interest rate then this could have a positive effect on the Pound, but if we see less than this, then it could be seen as bearish for the GBP. We also have the CIPS Services PMI, this captures the overview of sales and employment. If we see a score above 50 points then this is a positive result showing expansion, if we do see a result under 50 points, then this could be seen as negative for GBP quotes.

EUR

The ECB’s Monetary policy was released at the back end of last week, we saw a rise in the interest rate of 50 bps to 3.5%, even with this result, we still saw the Euro drop against both the Pound and the Dollar last week. This week we have the S&P Global Composite PMI out for Germany and the whole Eurozone. This is based on both the Manufacturing and Services industries, if we see a result above 50 points on both, signalling expansion, then this could positively affect Euro quotes, but if we see a result lower than 50 points, showing contraction, then could be seen as negative for the Euro.

USD

Last week we saw the CPI data released in the US, we saw a small drop by 0.1% to 5.5%, this leads us into the Interest rate decision we have this week being released, we have also had the Fed say they are prepared to increase the pace of their Interest rate hikes. The predicted result is a hike of 25 bps, if we do see a rise of this or bigger then this could be seen as bullish for the USD, if we don’t see a hike or even a cut, then this can be seen as negative for the Dollar. We also have the durable goods orders being released, if we see a rise from the previous result then this could have a positive effect on the USD, but if we see a drop, this could be negative for the USD. We also saw further advancements in the War between Russia and Ukraine. The ICC put out an arrest warrant for Vladimir Putin, if we see action taken because of this, then this could lead to a rise for the greenback.