Published: 11/01/2024 By ECAPThe British Pound was relatively flat as BoE Governor Andrew Bailey gave no hints regarding the path of interest rates, reaffirming the need to bring inflation down. Looking to Friday, the UK Manufacturing Production, Industrial Production, and monthly Gross Domestic Product for November will be released. These figures could give a clear direction to the British Pound.
The Euro seems to be holding its ground even though the eurozone may have been in recession last quarter, and prospects in the near term remain weak. Moreover, ECB policymaker Mario Centeno said that the central bank should cut its key interest rates sooner than it recently thought and should not wait until May to decide.
The U.S. Dollar drifted lower as investors waited on U.S. inflation data to see whether bets on as many as five Fed interest rate cuts this year were justified. For now, forecasts still show the market expects 140 basis points of cuts this year with a two-thirds chance they will begin as soon as March, leaving prices sensitive to data surprises.
Data supplied by GC Partners