Published: 20/06/2024 By ECAP
The British Pound rose after data showed U.K. inflation returned to the Bank of England's 2% target in May for the first time in nearly three years. The drop in annual consumer price inflation from April's 2.3% reading was in line with expectations and marked a sharp decline from the 41-year high of 11.1% reached in October 2022. Ultimately, the data all but confirms the BOE won't be cutting rates today.The Euro is struggling to attract investor support this morning amid a lack of fresh releases. In fact, with data in short supply, ongoing political uncertainty in France surrounding the upcoming snap election serves to deter investor support in the common currency. As Eurosceptic and far right parties gain ground ahead of the vote, markets have expressed concern over how this may impact the euro in months to come.
The U.S. Dollar stabilized yesterday after the previous session’s weakness as retail sales barely rose last month. This points to lingering headwinds in the momentum of consumer spending despite inflationary pressures showing signs of cooling. Markets are now pricing in a 67% chance the Fed will begin easing rates in September, with 50-basis points worth of cuts priced in for the year.
Data supplied by GC Partners