Market Report : 10.05.2024

Published: 10/05/2024 By ECAP

As expected, the Bank of England kept rates unchanged at 5.25% yesterday. Governor Bailey has not ruled out a rate cut at their next meeting in June, drawing attention to the two inflation releases that will take place between now and then. Also suggesting they may need to cut rates by more than is currently priced in. Sterling had some early morning support, with the Q1 GDP release beating forecast, printing at 0.6% - taking the UK out of recession and showing the fastest growth in 2 years.

The Euro has continued to hold it’s own against both Sterling and the Dollar, maintaining a solid position across both pairs this week. Following a busier start to the week, the European data has slowed towards the back end. The remaining release of note is the ECB meeting account due later today. Looking ahead, next week’s key US inflation data will pose a risk to the Euros recent form against the greenback.

The Dollar ends the week on the backfoot against its peers, losing around 0.5% against both Sterling and the Euro over the past few days. One catalyst for this move was the higher than anticipated US unemployment claims that printed at 231k vs 212k.  Looking forward for the Dollar; comments from the FOMC later today will garner some attention, but the prime data is due next Wednesday, with the latest US inflation release, which will certainly pose a risk to USD pairs.

Data supplied by GC Partners