FX Talk - an Ebury podcast

In this week's episode, our analysts turn their attention to the year ahead, and give their thoughts on what to expect in the FX market in the coming twelve months. What will be the most important themes in markets this year, and how could central bank easing cycles and the US and UK elections impact currencies? We also give our thoughts on the global economy, and discuss the arguments in favour of both stronger and weaker growth in 2024. 

Our episode ends with our analysts providing their predictions for the currencies that they believe will both over- and underperform in 2024. Is the Japanese yen poised for a rebound, and which emerging market currencies could struggle this year? Listen to this week’s FX Talk episode to find out our thoughts!

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We’d like to hear from you! Provide us with feedback so we can improve the podcast: https://linktr.ee/fxtalk  

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In this episode, we delve into the aftermath of the Federal Reserve's unexpectedly dovish shift following its December policy meeting. FOMC Chair Powell said the ‘progress’ had been made on inflation, while noting that discussions were already being had on interest rate cuts. The ‘dot plot’ was also revised lower, suggesting a total of 75 basis points of cuts in 2024. Markets embraced the narrative of imminent and rapid rate reductions, triggering a sharp sell-off in the US dollar against most currencies. 

We also give our thoughts on the December policy announcements from both the Bank of England and European Central Bank, while each picking the currencies that have surprised us the most in 2023.

We’d like to hear from you! Provide us with feedback so we can improve the podcast: https://linktr.ee/fxtalk  

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We’d like to hear from you! Provide us with feedback so we can improve the podcast: https://linktr.ee/fxtalk  

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We unpack the recent inflation developments, focusing on the disappointing October US and UK CPI reports. These both fell short of market expectations, leading to no shortage of volatility in markets. US headline inflation dropped sharply to 3.2%, while monthly inflation failed to rise for the first time since July 2022. This, coupled with a two-year low in the core measure, all but cemented expectations that the Federal Reserve is done with its hiking cycle. The result was a sharp sell-off in the dollar, which fell by more than 2% against its major peers. EUR/USD is trading at August highs above $1.09, while sterling has climbed back above the $1.25 level, despite last week’s drop in UK inflation.

We’d like to hear from you! Provide us with feedback so we can improve the podcast: https://linktr.ee/fxtalk  

Liked this show? Please leave us a review here – even one sentence helps! 

We’d like to hear from you! Provide us with feedback so we can improve the podcast: https://linktr.ee/fxtalk  

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Our FX 101 series provides a strong foundation of knowledge and terminology to better understand the more in-depth discussions and analysis covered in our regular episodes of FX Talk. By offering a range of topics and insights, FX 101 helps you build a solid understanding of FX and its complexities, and ultimately serves as a starting point in doing business without borders.

 This episode will cover:
1. Barter System and Gold Coins
2. Gold Standard Era
3. Bretton Woods Agreement
4. Evolution to Modern Currencies

We’d like to hear from you! Provide us with feedback so we can improve the podcast: https://linktr.ee/fxtalk  

Liked this show? Please leave us a review here – even one sentence helps! 

We’d like to hear from you! Provide us with feedback so we can improve the podcast: https://linktr.ee/fxtalk  

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We have a special guest in this episode of FX Talk, Ebury's Head of Nordics, Carl Lindh, as we debate the outlook for the main currencies in Scandinavia. Before we get into that, we discuss the fallout from the latest major central bank meetings, and October’s underwhelming US nonfarm payrolls report.

Both the Federal Reserve and the Bank of England held rates steady this month, while hinting that further rate hikes were probably unlikely. The FOMC struck an optimistic tone on US growth, although Powell expressed caution due to the increase in Treasury yields and a lag in policy transmission. Meanwhile, the Bank of England slashed its 2024 GDP forecast, warning that the UK economy was set to flatline next year.

We’d like to hear from you! Provide us with feedback so we can improve the podcast: https://linktr.ee/fxtalk  

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We’d like to hear from you! Provide us with feedback so we can improve the podcast: https://linktr.ee/fxtalk  

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The ongoing conflict between Israel and Palestine has taken centre stage, with a focus on the recent Hamas attacks and the Israeli military's retaliatory actions.

Meanwhile, financial markets remain fixated on economic data and central bank decisions. Following our previous episode, most currencies rebounded against the dollar, thanks in part to a dovish tone from several Fed policymakers that tempered expectations of more US rate hikes.

However, the dollar has shown broad strength in the past week, partly due to stronger US inflation figures. The euro is hovering just above 10-month lows, reflecting concerns about the state of the Eurozone economy. The British pound is also struggling, with a soft UK GDP report and vague comments from Bank of England members providing little clarity on UK interest rates.

Among the G10 currencies, safe-havens like the US dollar and Swiss franc have been the best performers in the past week.

We’d like to hear from you! Provide us with feedback so we can improve the podcast: https://linktr.ee/fxtalk  

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We’d like to hear from you! Provide us with feedback so we can improve the podcast: https://linktr.ee/fxtalk  

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September was a very busy month in the FX market, dominated by a host of major central bank meetings. Events kicked off with the ECB, which delivered a ‘dovish hike’, whereby it raised rates, but suggested that there was minimal appetite to hike again. Investors were taken aback by the Bank of England’s decision to hold rates steady, after the August UK inflation report missed expectations. 
On the flip side, the Federal Reserve adopted a hawkish stance, keeping rates unchanged, although indicating in its ‘dot plot’ that it foresees one final hike by year-end. These hawkish communications, and recent strong US data, have led to a sharp move higher in US Treasury yields, with the 10-year yield rising to a 16-year high around 4.8%.  

This has triggered an aggressive rally in the US dollar against almost every other currency. The USD index has risen by more than 6.5% since mid-July to its highest level since November.

We’d like to hear from you! Provide us with feedback so we can improve the podcast: https://linktr.ee/fxtalk  

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We’d like to hear from you! Provide us with feedback so we can improve the podcast: https://linktr.ee/fxtalk  

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In recent weeks, the USD has performed well largely due to safe-haven flows, which came about because of investors' concerns about economic slowdown in China. The slowdown is being evidenced by disappointing data like GDP,  PMI, retail sales, and industrial production, along with issues in the property sector. On the other hand, the US economy has shown great strength, with a healthy labour market and impressive growth indicators. In contrast, the Euro and Sterling have fallen from their highs against USD. Last week's business activity PMI data from the UK and EZ have been underwhelming and have fallen into contraction, indicating further economic difficulties.

We’d like to hear from you! Provide us with feedback so we can improve the podcast: https://linktr.ee/fxtalk  

Liked this show? Please leave us a review here – even one sentence helps! 

We’d like to hear from you! Provide us with feedback so we can improve the podcast: https://linktr.ee/fxtalk  

Liked this show? Please leave us a review here – even one sentence helps! 

Our FX 101 series provides a strong foundation of knowledge and terminology to better understand the more in-depth discussions and analysis covered in our regular episodes of FX Talk. By offering a range of topics and insights, FX 101 helps you build a solid understanding of FX and its complexities, and ultimately serves as a starting point in doing business without borders.

 This episode will cover:
1. Understanding exchange rates
2. Floating systems
3. Fixed exchange rates
4. Impact of Central Banks

We’d like to hear from you! Provide us with feedback so we can improve the podcast: https://linktr.ee/fxtalk  

Liked this show? Please leave us a review here – even one sentence helps! 

We’d like to hear from you! Provide us with feedback so we can improve the podcast: https://linktr.ee/fxtalk  

Liked this show? Please leave us a review here – even one sentence helps! 

August is typically a quiet month in the financial markets as investors often take a break, seeking sunnier climates elsewhere. In consequence, volatility can be relatively low, and currency trades tend to be narrower due to the lack of substantial economic news or announcements. Predicting whether this pattern will follow suit this year is challenging without a definitive forecast. However, it's notable that there remains plenty for the markets to consider and for us to discuss.

Over the past few weeks, headlines have been dominated by the meetings of the G4 central banks, namely the U.S. Federal Reserve, the European Central Bank, the Bank of Japan, and the Bank of England. As anticipated, the Federal Reserve raised rates by another 25 basis points at its July meeting. This comes after offering indications that it may cease raising rates, following evident signs of U.S. inflation easing. In the same vein, the European Central Bank adopted an unexpectedly dovish stance. Notably, Lagarde refrained from committing to any hikes, suggesting a potential pause from September onwards.

We’d like to hear from you! Provide us with feedback so we can improve the podcast: https://linktr.ee/fxtalk  

Liked this show? Please leave us a review here – even one sentence helps! 

We’d like to hear from you! Provide us with feedback so we can improve the podcast: https://linktr.ee/fxtalk  

Liked this show? Please leave us a review here – even one sentence helps!