Market Report : 16.05.2024

Published: 16/05/2024 By ECAP

The British Pound has rallied against the Euro, Dollar and other G10 currencies yesterday. The move comes as the foreign exchange market engages a classic 'risk on' gear to rising expectations that the Federal Reserve will cut interest rates in September. Ultimately, the Pound's gains suggest the prospect of a June rate cut is less of an overhang for the Pound than has been the case in recent weeks.

The Euro received some support from yesterday’s seasonally adjusted GDP data which expanded by 0.3% QoQ, meeting market expectations. This growth signals a recovery from the 0.1% contraction experienced in each of the previous two quarters. Additionally, the annual growth rate matched expectations at 0.4%. The rest of the week is strictly mid-tier data releases, leaving markets to wistfully look beyond.

The U.S. Dollar lost further ground yesterday as US inflation eased more than investors expected and risk appetite roared to the forefront. Nevertheless, the greenback is expected to stabilize in the coming weeks after recent economic data showed mixed signals about the strength of the American economy. Following a period of volatility, analysts now anticipate a quieter trading environment with low volatility until more substantial data is released.

Data supplied by GC Partners