Market Report : 13.05.2024

Published: 13/05/2024 By ECAP

The British Pound was bolstered by the release of higher than expected UK Gross Domestic Product figures on Friday as well as improved risk appetite. The UK economy expanded by 0.6% in Q1, surpassing forecasts and signalling the end of the nation's brief recession. Ultimately, this economic rebound represents the most robust growth seen in over two years.

The Euro has been relatively flat even though ECB policymakers noted that they will likely be in a position to cut interest rates in June as inflation in the Eurozone is on track to ease back to 2% next year. In turn, markets expect the ECB to cut its interest rate on June 6th despite the fact that the rate path beyond that is uncertain.

The U.S. Dollar steadied from recent swings as focus turned squarely to upcoming U.S. inflation data for more cues on interest rates. The CPI reading – due on Wednesday – will be in close focus, given that it is likely to factor into the outlook for U.S. interest rates. For now, while the U.S. economy seemingly cooled in recent months, inflation is still projected to remain sticky.

Data supplied by GC Partners