Published: 01/12/2023 By ECAPThe British Pound looks set to score a second consecutive weekly gain against the Euro, aided by a surprise rise in UK house prices, pushback against rate cut bets by Bank of England's Megan Greene, and a large undershoot in Eurozone inflation. Ultimately, easing financial conditions have prompted a host of Bank of England rate-setters to say over recent days that UK interest rates must stay at 5.25%
The Euro continues to waffle against the British Pound after Eurozone inflation figures missed the mark, causing the bloc’s single currency to slide against a basket of currencies. In fact, Eurozone annualized HICP inflation came in below expectations, with YoY Core HICP printing at 3.6% against the forecast 3.9%, extending the decline from the previous period’s 4.2% as inflation continues to cool across the Eurozone.
The U.S. Dollar extended its recovery yesterday following remarks from San Francisco Federal Reserve President Mary Daly indicating that the FOMC is not yet considering slashing borrowing costs. However, Daly's forceful position, which clashes with the more cautious posture embraced by other colleagues, highlights a widening chasm between the doves and the hawks.
Data supplied by GC Partners