A digital pound should not be available in large sums initially to avoid the risk of bank runs, British lawmakers said in a report on Saturday that also highlighted the need to safeguard cash and user privacy. The Bank of England and finance ministry have said an electronic form of the pound is likely in the second half of the decade, as 130 countries consider similar moves to keep abreast of technological advances in payments. But lawmakers on the Treasury Select Committee said in their report that while a digital ...

South Africa’s rand strengthened against the dollar on Friday, reversing its losses from the previous day, as U.S. Federal Reserve Chair Jerome Powell said the Fed would move “carefully” on interest rates. At 1619 GMT, the rand traded at 18.6150 against the dollar , about 1.2% stronger than its previous close. The dollar was last trading flat against a basket of global currencies, after falling in the wake of Powell’s comments. Powell reaffirmed the U.S. central bank’s intent to be cautious in its upcoming monetary policy decisions, but also said ...

USD: Reality check for the dollar bears In yesterday’s FX Daily, we argued that the heavy lifting to a dollar recovery was likely hinging on more US activity data resilience but that a hawkish pushback by the Fed and higher oil prices were two other potential channels of dollar support. Personal spending, PCE and initial jobless claims were in line with consensus, but the large OPEC+ output cuts announced in the afternoon after soft eurozone CPI figures favoured a rotation away from Europe back into the dollar. Our feeling is ...

The South African rand weakened against a broadly stronger U.S. dollar on Thursday after local data showed a rise in producer inflation, a widening budget deficit and a trade deficit. At 1510 GMT, the rand traded at 18.8850 against the dollar , about 0.7% weaker than its previous close. The dollar last traded around 0.6% stronger against a basket of global currencies, boosted by month-end demand as investors squared positions for November. South Africa’s producer inflation (ZAPPIY=ECI) quickened to 5.8% year on year in October from 5.1% in September, statistics ...

An influential committee of European Union lawmakers voted on Tuesday in favour of a draft law aimed at shifting clearing of euro-denominated derivatives from a post-Brexit London to the bloc. Long a Brexit battleground between London and Brussels, the EU wants better oversight of clearing in euro denominated interest rate swaps bought by EU-based market participants, the bulk of which are cleared by the London Stock Exchange Group (LON:LSEG) in the United Kingdom. The European Parliament’s economic affairs committee voted on Tuesday to approve the draft law that requires EU ...

USD: Fed hawks soften their stance We had not been expecting it this early, but some of the Federal Reserve hawks now seem to be happy to express a view that the inflation battle is won. Driving the bond market rally and dollar sell-off yesterday was a speech and comments from Fed hawk, Christopher Waller. His speech ‘Something Appears to Be Giving’ is well worth a read. On 18 October, he suggested that something had to give in that robust US growth and slowing inflation could not co-exist. He concluded ...

The rise in U.S. rate cut expectations for next year seems to have prompted hedge funds to cool their optimism on the dollar, potentially weakening a key plank of support for the currency in the coming months. The latest Commodity Futures Trading Commission (CFTC) data shows that funds cut their net long dollar position against a range of major and emerging currencies to $4.5 billion in the week ending Nov. 14 from $10 billion the week before. The $5.5 billion week-on-week swing is the biggest since July and second largest ...

The U.S. dollar ticked up on Wednesday after falling to its lowest in more than three months on hopes that the Federal Reserve will soon be cutting rates. New Zealand’s dollar was one of the biggest movers, rising 0.49% to $0.6166, after the Reserve Bank of New Zealand on Wednesday held interest rates but warned that further policy tightening might be needed. The had surged more than 1% earlier in the session to a four-month high of $0.6207. Comments from Fed official Christopher Waller flagging a possible rate cut in ...

MSCI’s global stock index advanced on Tuesday while the dollar fell as a Federal Reserve official signaled that the U.S. central bank was done raising rates and could even consider rate cuts if inflation keeps easing. The U.S. dollar index hit a 3-1/2 month low and was on track for its biggest monthly drop in a year as investors took the view that growth in the world’s largest economy is starting to slow down, with the market starting to price in a rate cut by the first half of the ...

USD: Excessive weakness The dollar has stayed under pressure at the start of this week as markets remained bullish on Treasuries across the curve on the back of growing dovish Federal Reserve expectations. The Fed Funds future curve currently prices in the first rate cut in June 2024. Yesterday, soft US home sales data helped consolidate the dollar’s bearish momentum and now endorses the narrative that higher rates are having a more tangible impact on the economy. Expect the dollar to remain very sensitive to US data, including today’s Conference ...

The U.S. dollar hit a three-month low against a basket of peers on Tuesday before steadying, as traders continued to unwind long dollar positions before this week’s U.S. and euro zone inflation data. The , a measure of the greenback against six major currencies, was last at 103.17, a whisker above the 103.07 it touched in Asia trade, the lowest since Aug. 31. The index is on track for a loss of more than 3% in November, its worst performance in a year. “Markets have been wanting to get ahead ...

The pound gained for a third day on Monday and was on track for its largest monthly rise versus the dollar in a year, largely a result of investors ditching the greenback ahead of what many believe will be a rapid shift to U.S. rate cuts in 2024. Separately, in a potential longer-term boost for sterling, Prime Minister Rishi Sunak announced a raft of foreign investments in Britain ahead of a gathering of business leaders. Sterling has gained nearly 4% versus the dollar this month, but has fared less well ...

USD: Too soon The DXY dollar index is down around 3.5% from its highs seen in October. The drop looks largely down to the view that the Federal Reserve’s tightening cycle is over and that portfolio capital can now be put back to work in bonds, equities, and emerging markets. While acknowledging that November and December are seasonally soft months for the dollar, our view is that this dollar sell-off has come a little early. We are bearish on the dollar through 2024 but expect the core driver to be ...

The U.S. dollar began the last week of November on the back foot and was on track for its biggest monthly drop in a year as traders eyed fresh economic cues in the week ahead to determine the future path of policy rates. A postponed OPEC+ meeting, the release of the Federal Reserve’s tracked measure of inflation alongside consumer prices data in the euro zone and Australia fill this week’s calendar, which will also see a rate decision from the Reserve Bank of New Zealand and Chinese PMI data. The ...

The South African rand weakened on Friday, giving back some gains from the previous session, when the central bank kept its main interest rate unchanged. At 1544 GMT, the rand traded at 18.8550 against the dollar , 0.19% weaker than its previous close. The dollar last traded around 0.4% weaker against a basket of global currencies. South Africa’s central bank stuck to its previous hawkish tone on Thursday as it kept its main lending rate unchanged for the third meeting in a row, boosting the rand, despite inflation quickening in ...