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Yet increasingly, euro area specific factors, particularly exposure to higher oil prices, risk further weakness in an already stagnating economy, and the single currency. The euro is especially vulnerable to rising oil prices, with net imports accounting for over 90% of oil products available in the European Union. "High oil prices are weighing on the euro area's terms of trade, and if oil prices move above $100 per barrel to $110 per barrel we think it will be difficult for the euro to avoid parity," said Nomura's G10 FX strategist Jordan Rochester. But it also lifts price pressures through higher import costs, compounding the impact from higher oil prices. "Definitely the euro zone is not in a good place right now," said Moec, adding that he did not rule out a euro move to parity.

Persons: Dado Ruvic, Jordan, Nomura, Morgan Stanley, Jens Eisenschmidt, Francesco Pesole, Athanasios, Gilles Moec, Dhara Ranasinghe, Alun John, Yoruk, Christina Fincher Organizations: U.S, REUTERS, European Union, OPEC, Barclays, European Central Bank, ECB, ING, Germany, Bank of America, AXA Investment, Thomson Locations: Jordan Rochester, United States, ITALY, Italy, U.S, London, Amsterdam

☆ Data supported a 25-basis-point rate hike from the Bank of England, strategist says
▼ + stars: | 2023-08-03 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailData supported a 25-basis-point rate hike from the Bank of England, strategist saysJordan Rochester, G10 FX strategist at Nomura, discusses market implications of the Bank of England's 25-basis-point rate hike.

Persons: Jordan Rochester Organizations: Bank of England, Nomura, Bank of England's

☆ Reactions: UK inflation cools in June, pound drops
▼ + stars: | 2023-07-19 | by ( ) www.reuters.com time to read: +6 min

Sterling dropped broadly, falling against the dollar, the euro and the yen, as interest-rate futures showed investors no longer expect UK rates to peak above 6%. COMMENTS:KEVIN BRIGHT, GLOBAL LEADER, CONSUMER PRICING PRACTICE, MCKINSEY & COMPANY, LONDON:"Inflation dipped more than expected; but the gulf between the UK and the Eurozone inflation levels remains. Despite most categories seeing a decline, food & non-alcoholic beverage inflation at 17.3% remains only 1.8% below its peak in March 2023. "Continued rising prices, higher interest rates and below inflation wage growth – are a triple blow to household budgets. NEIL BIRRELL, CHIEF INVESTMENT OFFICER, PREMIER MITON INVESTORS, LONDON:"Some good news on UK inflation at last, coming in below expectations for June and most importantly the core inflation rate fell more than thought.

Persons: Sterling, BoE, KEVIN, JOE TUCKEY, JORDAN, NOMURA, CHRIS BEAUCHAMP, Andrew Bailey, JEREMY BATSTONE, CARR, RAYMOND JAMES, ” KENNETH BROUX, It's, JOSEPH CALNAN, NEIL BIRRELL, Amanda Cooper, Andrew Heavens, Catherine Evans Organizations: Bank of England's, Reuters, Reuters Graphics Reuters, MCKINSEY, COMPANY, LONDON, Bank of England, JORDAN ROCHESTER, CPI, IG GROUP, Bank of, SOCIETE GENERALE, U.S, EMEA, Thomson Locations: homebuilders, Bank of England, EUROPEAN

☆ US dollar stumbles, drops to more than one-year low as inflation eases in June
▼ + stars: | 2023-07-12 | by ( Gertrude Chavez-Dreyfuss | ) www.reuters.com time to read: +3 min

[1/2] U.S. one hundred dollar notes are seen in this picture illustration taken in Seoul February 7, 2011. The greenback also hit its lowest against the Swiss franc since early 2015 after the inflation report. Data showed core U.S. consumer prices rose just 0.2% in June, compared with forecasts for a gain of 0.3%. The monthly rise in core prices was the smallest since August 2021. Against the yen, the dollar dropped to a six-week low of 138.17 yen .

Persons: Lee Jae, Simon Harvey, Jordan Rochester, Sterling, Gertrude Chavez, Dreyfuss, Ann Saphir, Chris Reese, Andrea Ricci Organizations: REUTERS, Swiss, Swiss National Bank, Nomura, Bank of England, Thomson Locations: Seoul, Swiss, U.S, London, Norwegian, Swedish, United States

With economic and monetary policy outlooks varying, currency moves are increasingly out of sync with each other. More pain is also anticipated for the yuan, trading near seven-month lows, as well as smaller Asian currencies. It's continuing to weaken against some European currencies and also Latin American currencies," he said. MULTI-LAYERED CRISISKit Juckes, head of FX strategy at Societe Generale, said the focus on monetary policy differences was also a result of uncertainties elsewhere. "We've got a one-in-a-100-years pandemic and once-in-75-years war and a-once-in-25-years energy crisis all thrown into the mix together," said SocGen's Juckes.

Persons: Yen, Pound, Jordan Rochester, Nomura, Lee Hardman, Hardman, Juckes, Morgan Stanley reckons, We've, SocGen's, You’ve, Dhara Ranasinghe, Alun John, John Stonestreet Organizations: The Bank of, European Central Bank, Reuters Graphics Rochester, Societe Generale, Bank of Japan, Thomson Locations: Europe, COVID, Ukraine, The Bank of Japan, United States, Beijing, Scandinavia

☆ Pound heads for biggest weekly gain in six months
▼ + stars: | 2023-06-02 | by ( Amanda Cooper | ) www.reuters.com time to read: +3 min

LONDON, June 2 (Reuters) - Sterling headed for its biggest one-week rally against the dollar in six months on Friday, as U.S. interest rates looked increasingly likely to plateau sooner than UK rates. The pound has gained 1.5% against the dollar this week, the most since early December, and nearly 1.1% against the euro - which would be its largest weekly increase in nearly four months. Meanwhile, as UK inflation remains stubbornly high, traders have reassessed the outlook for monetary policy in Britain too. Money markets show markets are pricing for UK rates to peak at 5.32% by year-end, up from 4.50% now. A month ago, the expectation was that UK rates would be around 4.80% by December.

Persons: Sterling, Warren Venketas, Jordan Rochester, Amanda Cooper, Susan Fenton Organizations: NFP, Federal Reserve, Treasury, U.S, Nomura, Thomson Locations: Washington, Britain, Rochester

EURNOK and inflationGoldman Sachs and UBS said that the rising cost of borrowing would likely support the Norwegian crown. But those daily sales are well down from the 4.3 billion crowns per day the central bank sold in October. "Any budget surplus that was generated from the commodity exports was basically being neutralized by the Norges bank," said Simon Harvey, head of FX analysis at Monex. Much of the crown's fate could also depend on what the U.S. central bank does. If the Fed stops hiking rates, this would likely boost global equities, which have a strong positive correlation to the Norwegian crown.

☆ Britain’s pound is beating every other major currency this year
▼ + stars: | 2023-04-04 | by ( Julia Horowitz | ) edition.cnn.com time to read: +3 min

The pound, which has advanced about 3.3% versus the greenback since the start of 2023, is the best-performing currency among developed economies this year. The UK currency has been boosted by indications the country’s economy is holding up better than expected. The International Monetary Fund predicted in January that the UK economy would contract by 0.6% this year, while all other advanced economies would grow, if only slightly. “There was a lot of pessimism being priced into the pound,” said Francesco Pesole, a currency strategist at ING. “There was a big re-rating of growth expectations around Europe, and that impacted the UK,” Pesole said.

European stocks have vastly outperformed their U.S. peers. The euro STOXX (.STOXXE) benchmark has beaten its U.S. peer, the S&P 500 (.SPX), by over 18 percentage points since September. "It's a very big move in European gas prices and that has dramatically improved the outlook. "Lower gas prices are surely a positive, but their rapid fall also tell us that they can rise just as fast should things go wrong. A closely watched index of European corporate credit (.MERER00) has seen its yield fall nearly 50 basis points this year.

☆ Premarket stocks: Is the dollar's relentless rise coming to an end?
▼ + stars: | 2022-11-22 | by ( Julia Horowitz | ) edition.cnn.com time to read: +7 min

At last, however, its breakneck rally could be coming to an end. Last week, investors turned bearish on the greenback for the first time since July 2021, according to data from Societe Generale. First, there was the surprising inflation data in the United States, which showed that prices rose more slowly than expected in October. If these economies perform better than expected, the United States won’t look like the only game in town — and other currencies could look appealing again. About 261,000 positions were added in October, and by next summer, the bank expects monthly gains of closer to 50,000.

☆ Storm clouds gather over the pound as focus turns back to dire economy
▼ + stars: | 2022-11-02 | by ( Harry Robertson | ) www.reuters.com time to read: +4 min

The good news for new Prime Minister Rishi Sunak is that few analysts now expect the pound to fall below parity with the dollar. A warm October has helped natural gas prices fall but a cold winter could drive up the cost of Britain's energy imports again, said Jordan Rochester, currency strategist at Nomura. DOLLAR PRESSURENot all strategists think the pound will return to near the lows seen in September. "The global economy is slowing down and heading for a recession and in such a scenario, the U.S. dollar does tend to outperform," said Alvin Tan, a senior currency strategist at RBC. Further rate hikes from the Federal Reserve, including on Wednesday, are also likely to support the dollar, he said.

☆ Could the British pound hit parity with the dollar? Here's what the bulls and bears say
▼ + stars: | 2022-10-14 | by ( Ganesh Rao | ) www.cnbc.com time to read: +3 min

First, it fell to an all-time low against the U.S. dollar after the U.K. government announced its "mini-budget." And of course, a strong dollar hasn't helped either . Strategists at Nomura were the most bearish on the pound, expecting it to trade below parity — at $0.98 — by the fourth quarter. ING: £1 = $1-$1.05 Francesco Pesole, an FX strategist at ING, said the pound looked too strong at $1.10. "A policy mix of loose fiscal policy (with little detail on how to close the deficit) and milder monetary tightening gives investors few reasons to hold the pound," they said.

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