Excel Currencies Blog

On Wednesday, Chancellor Reeves announced a series of investments that she says will result in higher economic output. The expansion of Heathrow Airport and significant developments in the Oxford-Cambridge corridor was welcome news, but GBP was indifferent to the news.

Yesterday evening, the Fed decided to keep interest rates on hold (as expected) and Fed Chair Powell delivered the same stance on future policy. President Trump has been very vocal that he wishes US interest rates to be far lower, but thus far the Fed remain unmoved.

Trump wants a lower USD to mainly help US manufacturers, something he led with during his campaign. Lower interest rates mean a weaker currency, which could also assist in re-balancing global trade imbalances. However, US inflation is still a bit of a concern and the economy continues to perform well under a high interest rate environment.

Today, the ECB cut interest rates for the 5th consecutive meeting and it looks like things aren't slowing down anytime soon. The interest rate cut and the comments made by President Lagarde were as expected and so the Euro was unfazed. 

'Disinflation is well on track', but the economic recovery is still facing headwinds after posting a disappointing 0% in Q4 last year. The EU looks to be following the same path as the UK at the moment and that's into a stagflationary period, where growth stagnates and inflation rises.