Welcome to this week’s Market Update.
Middle East escalation increases the prospect of a protracted conflict between Israel and Iran and Central Banks in major economies are making key decisions this week. Find out more about the key developments impacting the major currencies below.
Current rates
| Currency pair | Rate |
|---|---|
| eur usd | 1.1579 |
| gbp eur | 1.1726 |
| gbp usd | 1.3580 |
Rates correct as of 9:30am on Monday 16th June but may now have changed.
The Big 3
Three stories covering the latest developments in economies, currencies and borders.
Central banks to make key interest rate decisions
Major central banks will make decisions on interest rates this week. In particular, the Bank of England will decide on whether to cut or hold. It’s facing pressure to cut following poor economic data but is expected to hold at 4.25% in good news for GBP. The Fed will also make decisions and is expected to hold steady. In fact, according to pricing in futures contracts, investors aren’t expecting anything to change until September. The Swiss National Bank is expected to lower its rate to zero according to economists.
[MSN]
UK GDP decline highlighting challenges
The UK economy suffered its worst monthly contraction since 2023, shrinking by 0.3%. This is when Trump’s trade war really hit exports and tax increases held back the services sector. Rachel Reeves has a challenge ahead of her to deliver the growth needed to finance the spending plans announced last week. Notably, this decline followed growth in March and was weaker than the predicted contraction forecast by economists.
Middle East conflict escalation increases oil
As the conflict between Israel and Iran continues, oil prices rose with concerns about disruption to energy supplies. Israeli airstrikes have dealt critical damage to Iran nuclear facilities and UK is shoring up defences in the region. The conflict rattled markets initially with oil jumping more than 13% on Friday. That has now eased but fears of a protracted conflict could keep things unsteady.
Looking forward
Monday – Chinese retail + production data.
Tuesday – US sales data, decisions on Japan interest rate cuts.
Wednesday – UK and South Africa report CPI. Fed interest rate decision.
Thursday – BoE and Swiss National Bank interest rates. New Zealand GDP.
Friday – Japan CPI. UK and Canada report sales.
Here’s what we’re talking to our clients about
We’re always here to support. Here are some of the conversations we’re having:
- Middle East conflict
- BIG interest rate decisions this week
- Government fiscal spending and how it affects us all
The contents of this article do not constitute financial advice and are provided for general information purposes only.
