Published: 11/07/2024 By ECAP
The British Pound continues to gain ground against a basket of currencies supported by the release of UK GDP figures. In fact, the UK economy grew more than expected in May after stagnating in April, with the GDP expanding at 0.4% MoM, beating market expectations of 0.2%. However, the uncertainty surrounding the BoE’s decision to begin lowering its borrowing costs from the August meeting has capped any further gains.The Euro is largely rangebound this morning amid a lack of fresh economic releases in the Eurozone. With macroeconomic releases in short supply, dialled back expectations of ECB monetary loosening serve to keep the common currency afloat. However, French political jitters continue to prevent EUR from edging higher against its rivals. In fact, concerns of a political deadlock in the Eurozone’s second-largest economy may continue to leave EUR on the defensive.
The U.S. Dollar lost ground after yesterday’s comments from Fed Chair Jerome Powell sparked more optimism over interest rate cuts. A key point of pressure on the dollar was Powell stating that the Fed did not need to see inflation falling below its 2% target to begin cutting rates, only that the bank needed enough confidence that inflation was easing. This puts upcoming CPI data squarely in focus, with any signs of easing inflation likely to spur increased bets on a rate cut.
Data supplied by GC Partners