Published: 07/12/2023 By ECAP
The British Pound was on the back foot against all major currencies except the Euro as the latest Financial Stability Report from the BoE showed that the UK’s central bank continues to grapple with a lopsided economy. Looking forward, the absence of economic data released from the UK docket should leave the British pound poised to follow global market dynamics and risk sentiment.The Euro continues to lose ground as the recent dovish rhetoric from ECB officials held back investors from placing fresh bullish bets around the shared currency. In fact, ECB board member Isabel Schnabel said that the central bank can take further rate hikes off the table given a remarkable fall in inflation and lifted rate cut bets. Ultimately, the markets are now pricing in the possibility of a 142 bps cumulative rate cut in 2024.
The U.S. Dollar steadied in Asian trade, retaining recent gains as markets awaited more cues on when the Federal Reserve planned to begin trimming interest rates. While the Fed is widely expected to keep rates on hold in December, markets were uncertain over when the bank plans to begin trimming rates. This uncertainty aided the dollar, even as ADP payrolls data pointed to more cooling in the labour market.
Data supplied by GC Partners