Published: 15/01/2025 By ECAP
The British Pound reached a multi-week low against the Euro and weakened against the U.S. Dollar after UK inflation data came in below expectations. In fact, December's CPI rose 2.5%, slightly under the forecast, while core inflation eased to 3.2%. However, despite the Pound's decline, the softer inflation may provide some support, potentially helping to stabilize the currency in the near term.The Euro struggled to attract investor attention, trading mostly flat against its peers. In fact, yesterday’s comments from ECB official Phillip Lane on the potential easing of monetary policy dampened EUR appeal. Additionally, a risk-on market mood undermined the Euro's safe-haven status. Looking forward, upcoming industrial production data and Germany's GDP growth could influence the Euro's direction later in the week.
The U.S. Dollar retreated from a two-year high ahead of key consumer inflation data, which will influence future interest rate decisions. In fact, weak producer price index data raised hopes for easing inflation, but certain components suggested underlying inflation remained high. On that note, market focus has shifted to the upcoming CPI data and President Trump’s tariff plans, which could impact inflation and rates.
Data supplied by GC Partners