Excel Currencies Blog

Manufacturing industry feeling the pain of higher interest rates..

The UK economy continues to grow and so remains out of the much anticipated recession this year. The result was softer than last month and what had been forecast, but the data showed a solid increase in private sector output. Travel, leisure and hospitality sectors all showed resilient consumer demand, but manufacturing firms suffered with the steepest reduction in production levels for 4-months.

Public sector borrowing experienced the second-highest level last month since records began 30-years ago. £24 billion was borrowed, up from £20 billion in March. Sentiment towards the Pound continues to improve however, with the latest report from the Commitments of Traders showing investors are the most bullish since 2021.

It's all about the inflation rate this week for Sterling and the market is expected to see a sizeable drop from double-digit numbers. Whilst consumers will want to see a number as low as possible, GBP sellers will want to see a higher number than the 8.2% forecast to avoid a potentially weaker £ this week.


EUR
The Euro-Zone released similar PMI figures to the UK this morning with services shining, but factory output extending its slide (especially in Germany). A 5-month low for business confidence was realised due to price increase concerns remaining elevated at histrionic levels. 

The ECB are expected to raise rates to 4% this year and so the months ahead should see € strength. ECB President Lagarde should reinforce this opinion tomorrow in her speech, which is the only thing of note for the bloc this week.


USD
The Dollar continues its fine form into the new week, but releases major data daily that will provide relatively high volatility spots on release. For this reason, it makes it an unpredictable week and so impossible to forecast on what may or may not happen..