Market Report : 13.02.2024

Published: 13/02/2024 By ECAP

The British Pound rose after this morning’s UK wage data beat expectations and the UK unemployment rate fell to 3.8% in December, underscoring a tight labour market that can ensure inflation stays elevated. In fact, odds of a June rate cut from the BoE faded as a result of strong wage dynamics, which confirms the BoE’s suspicion that inflation will prove difficult to return to 2%.

The Euro registered further losses against the U.S. Dollar and the British Pound yesterday as some European Central Bank officials were quite dovish, laying the ground to cut rates. Looking forward, the euro area sees GDP figures on Wednesday, to be followed by an appearance from European Central Bank President Christine Lagarde on Thursday.

The U.S. Dollar firmed up as markets hunkered down before key U.S. inflation data that is widely expected to factor into the path of interest rates. The inflation data comes after a chorus of Federal Reserve officials warned that the central bank was in no hurry to begin trimming interest rates in 2024 – a trend that bodes well for the dollar and poorly for other currencies.

Data supplied by GC Partners