Market Report : 12.07.2024

Published: 12/07/2024 By ECAP

The British Pound continues to draw support from yesterday’s data showing that Britain's economy grew more quickly than expected, by 0.4% in May. This comes on top of the recent comments by the Bank of England policymakers dashing hopes for a rate cut in August. In fact, the BoE member Catherine Mann said on Wednesday that until there was some deceleration in services prices, she is not in favour of cutting interest rates.

The Euro surged to a five-week high against the U.S. Dollar but dropped to a multiyear low against the British Pound yesterday. The latter move comes as German inflation eased to 2.5% in June, confirming earlier data and reinforcing the possibility of another rate cut by the ECB in September. For now, the single European currency is trading in a calm tone in today’s early trading hours.

The U.S. Dollar steadied in early European trade this morning after tumbling to a one-month low in overnight trade. The greenback was battered by yesterday’s softer than expected CPI data, which showed inflation cooled a smidge more than expected in June. The reading ramped up bets that the Federal Reserve will have more confidence to begin cutting interest rates in September.

Data supplied by GC Partners