Currency Market Update - 12th January 2024

Currency Market Update

US inflation came in stronger than what was forecasted for December, seeing the inflation rate increase to 3.4% versus 3.1% in November. Even if core inflation dropped from 4% to 3.9%, it was expected to reach a level of 3.8%. This has created more market uncertainty of when the Federal Reserve will start to cut rate and that its initial rate hike might be postponed from March to later in the year.

We can also read about a problematic situation in the Red Sea, that is vital for worldwide shipping. Tensions has risen between the US and Iran after an oil tanker was seized off the coast around Oman. People within the shipping industry states that threat levels are at its highest point in decades. Vessels are now forced to reroute around South Africa, which will cause lengthy delays and put pressure on countries economic growth.

This morning we could see that the UK economy grew by 0.3% in November, after two consecutive contractions in September and October. Biggest contribution to this was from the service sector – retail, car leasing and computer games companies being the biggest winners. Also the public sector grew after it was less impacted by national strike actions in November.



Pin It