Published: 05/02/2024 By ECAPThe British Pound has risen six weeks in succession against the Euro and sits on the cusp of breaking to its highest levels since 2022. The most recent move comes as market participants lowered expectations for a May rate cut. Looking forward, there is no front-line data on tap, but the Bank of England remains in focus with Monetary Policy Committee members Breeden, Dhingra and Mann due to speak.
The Euro has lost a lot of ground, affected by the region’s macroeconomic woes. The German economy contracted by 0.3% in the three months to December, while EU growth stood pat in the same period. Looking forward, Investors will keep an eye on the German Trade Balance and the January Composite PMI from Germany, the Eurozone and Spain.
The U.S. Dollar steadied at a near two-month high as Friday’s strong labour market data and last week’s hawkish signals from the Federal Reserve saw investors reconsider bets on early interest rate cuts. In fact, Fed Chair Jerome Powell said that resilience in the U.S. economy gave the Fed more headroom to keep monetary policy steady for the time being.
Data supplied by GC Partners