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Mini-Budget imminent

Today's news headlines:

'Kwasi Kwarteng to unveil his plan to kick-start UK economic growth'. The long-anticipated mini-Budget is due to be delivered to the nation today by UK Chancellor Kwasi Kwarteng, which will outline several tax reforms and payment caps intended to help households and businesses across Britain. The Chancellor is expected to massively increase UK borrowing in order to fund these policies. The National Insurance increase reversal announced yesterday alone is estimated to cost the UK £30 billion a year. The opposition Labour Party believes Kwarteng is setting the Tories up for defeat by announcing tax reforms that help higher earners and large businesses while also allowing bankers' year-end bonuses to increase. (Financial Times)

'Japan intervenes to prop up Yen for first time since 1998'. After the Bank of Japan announced its plan to stick with its ultra-low policy rates yesterday morning, the Japanese Yen tumbled to a 24-year low against the US Dollar. This prompted the Japanese government to intervene in what was described as a 'rapid and one-sided' move in the foreign exchange market by selling Dollars for the first time since the late 1990s. As USD/JPY approached the 146 level, the BoJ took decisive action around 5pm local time to offload Dollars, causing the Yen to surge back to a little over 140 in the space of half an hour. The huge mediation rippled throughout the global foreign exchange markets, causing the Pound and Euro to enjoy positive movements against the Dollar and finish the day in the green. (Financial Times)


Lots of Manufacturing and Services PMI data will be available from Europe and the US throughout the day, giving some insight into business conditions. All eyes will be on Washington this evening as Federal Reserve Chair Jerome Powell delivers opening remarks at a Fed Listens event, which could inject some volatility into the currency markets. 


German Flash Manufacturing PMI: 48.3 vs 49.1 previously
German Flash Services PMI: 45.4 vs 47.7 previously 
UK Flash Manufacturing PMI: 48.5 vs 47.3 previously 
UK Flash Services PMI: 49.2 vs 50.9 previously 
US Flash Manufacturing PMI: 2:45PM
US Flash Services PMI: 2:45PM
Federal Reserve Chair Jay Powell speaks: 7:00PM
Japanese Bank Holiday: All day

Interbank rates*:

GBP/USD: 1.1230         
GBP/EUR: 1.1435
EUR/USD: 0.9820
USD/CAD: 1.3495


Please contact your Dealer about any upcoming FX requirements you may have, or call +44 (0)20 3465 8200. 

*Indicative interbank rates taken on the day of writing. Please speak to your Dealer to find out the current rates available for you.