Market Report : 15.03.2024

Published: 15/03/2024 By ECAP

The British Pound tumbled against the US Dollar yesterday after the US Department of Labor announced a rebound on inflation that could dent the Federal Reserve’s easing policy. On the U.K. front, the Bank of England will probably keep investors guessing next week about when it is likely to start cutting interest rates as it waits for clearer signs that inflation pressures in the economy really are being quashed.

The Euro continues to face new hurdles due to the dovish stance emerging from European Central Bank policymakers. François Villeroy de Galhau, an ECB policymaker, suggested on Wednesday that a rate cut in the spring remains probable. Additionally, ECB Governing Council member Yannis Stournaras advocated for an early rate reduction yesterday. Looking forward, ECB board member Philip Richard Lane is scheduled to speak, and investors will closely monitor his remarks for insights into the ECB's policy direction.

The U.S. Dollar firmed up this morning and seem set to snap a three-week losing streak after hotter than expected U.S. inflation data suggested a slight increase in the risk that interest rate cuts from the Federal Reserve may be delayed. In fact, the string of sticky inflation reports has led investors to dial back their expectations, with markets now pricing in 60% chance of the Fed cutting rates in June, compared to 74% a week earlier.

Data supplied by GC Partners