The ECB yesterday left policy unchanged as expected, with Draghi saying decisions on QE will probably be taken in October. The chairman also commented that the rise in the euro means financial conditions have tightened.
In the US, expectations of a December rate rise have dropped considerably. Fed vice chairman, and noted hawk, Fischer resigned this week, and will leave his post next month. This adds to uncertainty about the Fed leadership, with Yellen’s term as chair due to expire early next year.
Tensions with North Korea, and the hurricane hitting Florida, are also weighing on the dollar.
For the UK, the economic data continues to remain soft.
On the exchanges, GBP/USD has broken above the 1.3000 level on general dollar weakness. The high last month around 1.3250 should hold the topside, whilst 1.2950 provides initial support from here.
GBP/EUR has found some support following the new year-to-date low of 1.0740 last week, although Euro sentiment remains strong. We need a closing break of 1.1000 to alleviate the risk of further short-term weakness.
GBP/USD – 1-year chart
Week ahead
| Date | Release | Last | Expected* |
| 12/9/17 | UK CPI YoY | 2.6% | 2.7% |
| 14/9/17 | UK BOE Base Rate | 0.25% | 0.25% |
| 14/9/17 | US CPI YoY | 1.7% | 1.8% |
*Bloomberg survey
Equity Indices
| Indices | Previous Close | YTD % Change |
| FTSE 100 | 7396 | +3.29% |
| S&P | 2465 | +10.11% |
| EUROSTOXX | 3447 | +4.60% |
| DFM GENERAL INDEX | 3644 | +3.22% |
Foreign Exchange
| Currency | Last | Currency | Last |
| EUR/USD | 1.2050 | AUD/USD | 0.8095 |
| GBP/USD | 1.3150 | USD/AED | 3.6730 |
| GBP/EUR | 1.0910 | GBP/AED | 4.8280 |
| USD/CHF | 0.9475 | EUR/AED | 4.4260 |
| USD/JPY | 107.75 | XAU/USD | 1353 |
UK Benchmark Rates
| Libor | Swap Mid | ||
| 3 month | 0.28575% | 2 year | 0.54% |
| 6 month | 0.39763% | 3 year | 0.61% |
| 12 month | 0.58838% | 5 year | 0.74% |
Click here to view National Treasury Bank’s deposit rates.
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