Published: 22/08/2024 By ECAP
The British Pound has rallied across the board yesterday as recent inflation and employment reports have strengthened the case for the Bank of England to maintain interest rates at 5% in its upcoming September meeting. Looking forward, today’s PMI data will be pivotal for the British Pound. Stronger figures could reinforce the case for the Bank of England to maintain its current interest rate in September.The Euro has been holding its ground recently as ECB policymakers refrained from committing to a specific path for interest rate cuts. Nonetheless, ECB policymaker Olli Rehn said that the ECB may need to lower interest rates again in September due to persistent economic weakness. In fact, markets have priced in nearly a 90% chance of a 25-basis points cut.
The U.S. Dollar edged higher in early European trade yesterday but remained close to seven-month lows as minutes from the last Federal Reserve meeting and revisions to payrolls data pointed to an interest rate cut in September. In fact, Nomura forecasts continued weakness in the U.S. Dollar, with this outlook driven by several macroeconomic factors.
Data supplied by GC Partners