ChamberFX Weekly Brief
Keep up-to-date on foreign exchange developments and news with our ChamberFX weekly briefs and monthly newsletters. These valuable insights are provided by Damon Ellam, International Payments UK, MoneyCorp. Damon is our regional representative and will be providing useful monthly FX forecasts to help chamber members with their currency strategies.
Good Morning
Welcome to my August newsletter. I hope you find it useful and informative.
Please see below my thoughts for this month, a calendar of the upcoming FX market risk events, as well as the interest rate & FX rate predictions.
If you’d like to discuss strategies for your business or need insights when navigating the upcoming risk events, feel free to reach out to me directly.
Additionally, if you know other businesses who could benefit from Moneycorp services, we’d love it if you could refer them to us.
Have a great month ahead!
Best,
Damon.
What’s driving FX markets in August?
Markets have responded positively to the certainty brought by the US-EU and US-Japan trade agreements, along with an extended truce with China. This has contributed to a strengthening of the US dollar in recent weeks. With fears of a global trade war now significantly reduced, attention is likely to shift back to economic data and interest rate expectations. In my view, the trajectory of US interest rates will be the primary driver for FX markets in the coming months – so expect me to keep linking everything back to that for the foreseeable future.
President Trump is pushing for a rapid reduction in US interest rates. However, inflation remains elevated and economic data has generally held up well, supporting the case for higher rates in the short term. This has created ongoing tension between Trump and Federal Reserve Chair Jerome Powell, a dynamic that is likely to persist until Powell’s term ends in May 2026.
The Bank of England’s next interest rate decision is scheduled for Thursday, 7th August. Markets anticipate another rate cut to 4.0%, with only one or two additional cuts expected over the next 12 months. We currently forecast rates to reach 3.5% by around April 2026. However, this outlook could shift quickly if inflation remains stubbornly high or if economic data disappoints.
In the UK, growing anticipation around the Autumn Budget and persistent fiscal concerns could also exert downward pressure on the pound.
Overall, I believe the sentiment that drove extreme USD weakness over the past six months has largely faded. As a result, I’m wary that markets may begin to reverse the recent trend unless there is a further shock to markets.
Risk Event Calendar
|
Date (Aug) |
Time (UK) |
Country |
Currency |
Description |
|
Thu 7th |
12:00 PM |
United Kingdom |
GBP |
Bank of England meeting |
|
Tue 12th |
5:30 AM |
Australia |
AUD |
Reserve Bank of Australia meeting |
|
Tue 12th |
7:00 AM |
United Kingdom |
GBP |
Unemployment & Wage data |
|
Tue 12th |
1:30 AM |
United States |
USD |
CPI inflation data |
|
Thu 14th |
7:00 AM |
United Kingdom |
GBP |
GDP growth data |
|
Thu 14th |
10:00 AM |
European Union |
EUR |
GDP growth data |
|
Wed 20th |
3:00 AM |
New Zealand |
NZD |
Reserve Bank of New Zealand meeting |
|
Wed 20th |
7:00 AM |
United Kingdom |
GBP |
CPI Inflation data |
|
Thu 21st |
8:15 AM |
France |
EUR |
Manufacturing and Services PMIs |
|
Thu 21st |
8:30 AM |
Germany |
EUR |
Manufacturing and Services PMIs |
|
Thu 21st |
9:00 AM |
European Union |
EUR |
Manufacturing and Services PMIs |
|
Thu 21st |
9:30 AM |
United Kingdom |
GBP |
Manufacturing and Services PMIs |
|
Thu 21st |
2:45 PM |
United States |
USD |
Manufacturing and Services PMIs |
|
21st – 23rd |
N/A |
United States |
USD |
Jackson Hole - Economic Policy Symposium |
|
Thu 28th |
1:30 PM |
United States |
USD |
GDP growth data |
|
Fri 29th |
1:30 PM |
United States |
USD |
Core PCE Price Index |
Interest Rate Summary
Bank of England:
- Headline interest rate: 4.25%
- Next meeting date: 07/08/2025
- Next meeting expectation: Cut to 4.00%
- Expected interest rate on 31/12/2025: 3.75%
- Expected interest rate on 30/06/2026: 3.50%
European Central Bank:
- Deposit interest rate: 2.00%
- Next meeting date: 11/09/2025
- Next meeting expectation: Hold
- Expected interest rate on 31/12/2025: 2.00%
- Expected interest rate on 30/06/2026: 1.75%
US Federal Reserve:
- Headline interest rate: 4.50%
- Next meeting date: 17/09/2025
- Next meeting expectation: Cut to 4.25%
- Expected interest rate on 31/12/2025: 3.75%
- Expected interest rate on 30/06/2026: 3.50%
Forecast Snapshot
Where do the banks think FX markets will be at the end of the 2025?
GBP/USD
- Current 1.325
- Barclays 1.37
- BNP Paribas 1.38
- Nomura 1.37
- UniCredit 1.31
- Wells Fargo 1.37
- Bloomberg Consensus Median 1.36
GBP/EUR
- Current 1.15
- Barclays 1.19
- BNP Paribas 1.15
- Nomura 1.14
- UniCredit 1.12
- Wells Fargo 1.16
- Bloomberg Consensus Median 1.16
EUR/USD
- Current 1.155
- Barclays 1.15
- BNP Paribas 1.20
- Nomura 1.20
- UniCredit 1.19
- Wells Fargo 1.18
- Bloomberg Consensus Median 1.18
Read the newsletter in full.
Weekly FX Briefs
Contact
For further information and advice on Hull & Humber's ChamberFX, or for assistance with your currency strategy, please click here or contact Lorraine Holt at l.holt@hull-humber-chamber.co.uk or call 01482 324976.
Service delivered by Hull & Humber Chamber of Commerce in partnership with TTT Moneycorp Limited.
TTT Moneycorp Limited is authorised by the Financial Conduct Authority under the Payment Service Regulations 2017 (reference number 308919) for the provision of payment services.
