Published: 13/12/2023 By ECAP
The British Pound was on the back foot this morning as Britain's economy shrank in October. In fact, gross domestic product fell by 0.3% from September, the Office for National Statistics said. This raises the risk of a recession and tests the BoE’s resolve to stick to its tough line against cutting to interest rates from their 15-year high.The Euro seems to have gained some support from ECB officials even though the central bank is expected to leave interest rates unchanged at its December meeting on Thursday. In fact, the ECB seems prepared to push back market expectations for a rate cut as early as March by stating that they still see price upside risks, notably from growing wages.
The U.S. Dollar steadied as sticky U.S. inflation data cast some doubts over what the Federal Reserve will signal at the conclusion of a meeting later in the day. On that note, market participants remained convinced that the Fed will leave interest rates unchanged later this evening. However, strong labour market and sticky inflation readings brewed some uncertainty over what the central bank’s outlook is for 2024.
Data supplied by GC Partners