IFX Market Report: Wednesday 23rd November 2022

Tuesday was a pretty quiet day from a data perspective, with only UK Public Sector Net borrowing and Eurozone preliminary Consumer Confidence figures to note. Both were better than expected and saw the pound and the Euro gain some ground against the dollar. GBPUSD pushed to around 1.1880 and EURUSD hovered around 1.03.

This morning in the UK preliminary Services PMI came in slightly better than expected. The data was forecast to show contraction of 48 but came in at 48.8.

The Bank of England looks likely to hike interest rates in December by 0.5%, bringing the base rate to 3.5%, with them expecting to peak at 4.25% in Q1 2023 with the additional 0.75% coming across the first two months of 2023. This will bring some positive news to households as the BOE originally put forecasts above 5% when Liz Truss's mini-budget was announced.

The supreme court ruled this morning that Scotland cannot hold a second referendum for Scottish Independence. Alex Salmond, the former SNP first minister who now leads the Alba party, says that in light of today’s supreme court ruling nationalists should use “a civic campaign of protest and action” to push for independence. On the other side Scottish Labour Leader, Anas Sarwar says that he welcomes the decision from the supreme court, but thinks that Scotland does need change but not via a referendum or independence.

The news of the referendum was deemed positive for the UK, and GBPUSD currently resides at 1.1935

GBPEUR resides at 1.1574

EURUSD resides at 1.0313