Published: 17/01/2024 By ECAPThe British Pound rose across the board this morning after UK inflation for December rose by more than expected, leading markets to cool expectations for imminent BoE interest rate cuts. The Bank of England has nevertheless cautioned against complacency, and today's surprisingly hot figure will justify the Bank's preferred stance to keep rates level for an extended period.
The Euro was relatively flat following the latest remarks from ECB policymakers. In fact, Christine Lagarde said the central bank was on track to get inflation back to its 2% target, but victory had not yet been won. Moreover, Klass Knot said any rate change was unlikely in the first half of 2024. Ultimately, investors have pushed back rate-cut expectations to April from March.
The U.S. Dollar stood at a one-month high amid increasing doubts over early interest rate cuts by the Federal Reserve. In fact, Waller stated that while interest rate cuts were likely to happen this year, the central bank was not considering any in the near-term, citing continued resilience in the U.S. economy. Ultimately, Waller’s comments saw investors scaling back bets for a 25-basis point rate cut in March.
Data supplied by GC Partners