Market Report : 01.10.2024

Published: 01/10/2024 By ECAP

The British Pound rallied to new highs against the Euro yesterday, reaching a 29-month peak against the bloc’s single currency. The moves comes as the expectation that the BoE’s easing cycle will be slower than other central banks from G-7 nations continues to provide support to the British Pound. Ultimately, investors anticipate the BoE to cut interest rates one more time by 25-bps in the remainder of this year.

The Euro struggled to gain any meaningful traction yesterday as investors keenly await today’s release of Eurozone inflation data before placing directional bets. The data is expected to show that the Eurozone inflation fell below the ECB’s 2% target in September. Ultimately, a softer CPI print will reaffirm bets for a 25 bps rate cut at the next ECB policy meeting in October.

The U.S. Dollar garnered some interest after Fed Chair Jerome Powell adopted a more hawkish tone during yesterday’s speech. Powell stated that he sees only two more 25-basis point interest rate cuts this year as a baseline if the economy performs as expected. Investors were quick to react and pared bets for a more aggressive policy easing by the US central bank.

Data supplied by GC Partners