GBP exchange rate consolidation
2024-09-11
■ Due to weakened expectations for the new government policies in the UK and the bottoming out of the US dollar, there is currently a trend of the pound weakening
■ The Bank of England (BOE) maintained its policy rate unchanged at its September meeting, causing the pound to rebound against the US dollar and find a position between 185-190 yen against the Japanese yen
Please organize the pound exchange rate before the Monetary Policy Committee (MPC) meeting of the Bank of England (BOE) on the 19th. The pound rose to $1.3266 against the US dollar on August 27th, setting a new high since March 2022. The pound against the yen rose to 208.10 yen on July 11, the highest point since January 2008, before briefly reversing and falling to the 180-yen range. However, by September 2, it had rebounded to the middle of 193 yen. During this period, the pound's appreciation was supported by the depreciation of the US dollar and the Japanese yen. However, in the UK general election held on July 4th, the Labour Party, the opposition, won its first political change in 14 years with an absolute majority of seats. The party's economic policies and fiscal discipline emphasized the pound's appreciation. However, due to limited budgetary space during the Conservative government period, Keir Starmer's new government hinted in a speech on August 27th that it would significantly increase capital gains tax and inheritance tax, stating that it would abide by fiscal discipline. The expenditure review is expected to be announced on October 30th, and the new government's fiscal plan will be highly anticipated.
Today, the UK will release its labor force statistics for May to July. The market expects the unemployment rate to drop to 4.1%, the lowest point since January, and the number of employees to increase by 123000 compared to the previous month. At the same time, the year-on-year growth rate of average wages, excluding bonuses, will slow down to 5.1%. Considering the economic losses caused by strikes by public sector employees, the new Chancellor of the Exchequer, Rachel Reeves, has announced an average salary increase of 5.5%. The year-on-year increase rate of the Consumer Price Index (CPI) in July was 2.2%, close to the target of the Bank of England (2.0%). However, the Bank of England still expressed the need to continue tightening monetary policy at the MPC meeting in August, and it is expected to maintain the policy rate of 5.0% unchanged at the MPC meeting on the 19th. The market has already anticipated that further interest rate cuts may be implemented at the MPC meeting on November 7th. The actual GDP for July announced on the 11th, is expected to accelerate year-on-year and month-on-month growth. If the pace of interest rate cuts slows down, the current trend of pound depreciation may be curbed. The chart shows that the pound against the US dollar will encounter upward resistance near the 6-day high of $1.3238, but if it can stop falling in the middle of $1.29, it is expected to rebound. The pound is expected to find support against the yen in the 185–190 yen range.
■ The Bank of England (BOE) maintained its policy rate unchanged at its September meeting, causing the pound to rebound against the US dollar and find a position between 185-190 yen against the Japanese yen
Please organize the pound exchange rate before the Monetary Policy Committee (MPC) meeting of the Bank of England (BOE) on the 19th. The pound rose to $1.3266 against the US dollar on August 27th, setting a new high since March 2022. The pound against the yen rose to 208.10 yen on July 11, the highest point since January 2008, before briefly reversing and falling to the 180-yen range. However, by September 2, it had rebounded to the middle of 193 yen. During this period, the pound's appreciation was supported by the depreciation of the US dollar and the Japanese yen. However, in the UK general election held on July 4th, the Labour Party, the opposition, won its first political change in 14 years with an absolute majority of seats. The party's economic policies and fiscal discipline emphasized the pound's appreciation. However, due to limited budgetary space during the Conservative government period, Keir Starmer's new government hinted in a speech on August 27th that it would significantly increase capital gains tax and inheritance tax, stating that it would abide by fiscal discipline. The expenditure review is expected to be announced on October 30th, and the new government's fiscal plan will be highly anticipated.
Today, the UK will release its labor force statistics for May to July. The market expects the unemployment rate to drop to 4.1%, the lowest point since January, and the number of employees to increase by 123000 compared to the previous month. At the same time, the year-on-year growth rate of average wages, excluding bonuses, will slow down to 5.1%. Considering the economic losses caused by strikes by public sector employees, the new Chancellor of the Exchequer, Rachel Reeves, has announced an average salary increase of 5.5%. The year-on-year increase rate of the Consumer Price Index (CPI) in July was 2.2%, close to the target of the Bank of England (2.0%). However, the Bank of England still expressed the need to continue tightening monetary policy at the MPC meeting in August, and it is expected to maintain the policy rate of 5.0% unchanged at the MPC meeting on the 19th. The market has already anticipated that further interest rate cuts may be implemented at the MPC meeting on November 7th. The actual GDP for July announced on the 11th, is expected to accelerate year-on-year and month-on-month growth. If the pace of interest rate cuts slows down, the current trend of pound depreciation may be curbed. The chart shows that the pound against the US dollar will encounter upward resistance near the 6-day high of $1.3238, but if it can stop falling in the middle of $1.29, it is expected to rebound. The pound is expected to find support against the yen in the 185–190 yen range.