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Daily Market Report | Currency insight from Excel Currencies |
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| Written by Dan Waterman November 21st 2024 |
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Money markets cut the odds of a December interest rate cut in the UK, strengthening the Pound..
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| UK inflation in October rose to 2.3%, up from an unexpectedly low 1.7% in September. The last 2-months have seen dramatic movements in UK inflation data, after most of the year seeing consecutive and gradual falls. The outcome has been GBP v EUR positive, but has had no effect to GBP v USD.
Economists are split in their views as to what the BoE could/should do with interest rates over the coming months, because of the recent inflation data and Labour budget. For now, it feels like a December interest rate cut in the UK has become less likely and further easing next year has been reduced to around 50bp (which is deemed pro £).
The problem is, no-one knows just yet how the October Budget will impact UK inflation. The increase in business costs and taxes kick in in Q2 of next year, but higher energy prices in the meantime have risen and will rise again at the same-time of the Governments changes.
This creates a potentially unsavoury cocktail of low growth and higher inflation (expected) or stagflation (still very much lingering). Either/or is GBP negative. Let's see if the PMI's this month (released tomorrow morning) can shed some light on the potential direction on things for the UK in the months ahead. .
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Expected mid-market ranges for November 21st 2024 | | |
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On this day - | In 164 BC, Judas recaptures Jerusalem and redicates the second temple, commemorated since as Jewish festival Hanukkah
In 1818, Russia's Tsar Alexander I petitios for a Jewish state in Palestine
In 1906, China prohibits the opium trade
In 2017, Robert Mugabe of Zimbabwe resigns after 37-years of power
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