Published: 16/09/2024 By ECAP
The British Pound traded in a narrow range at the end of last week, with the currency consolidating some of its recent gains. However, further upside movement seems limited, with some analysts warning the currency may have become overvalued in recent weeks. For now, the Pound may continue to trade sideways as GBP investors await high-impact UK data later in the week.The Euro traded in mixed fashion on Friday as market participants digested the ECB’s recent interest rate cut and lacklustre Eurozone industrial production figures. However, helping to underpin the euro was its negative correlation with a weakened U.S. Dollar. Turning to this week, the focus for EUR investors will be Germany’s latest ZEW economic sentiment index.
The U.S. Dollar crept lower this morning, extending a run of recent losses as markets positioned for a likely interest rate cut this week. In fact, the Fed is widely expected to cut rates at the conclusion of its policy meeting on Wednesday, although markets are split over how much the central bank will reduce rates. Investors are pricing in a 50% chance for a 50-basis point cut, and a 50% chance for a 25-bps cut.
Data supplied by GC Partners