Published: 17/09/2024 By ECAP
The British Pound rose slight during yesterday’s session, ahead of Thursday's Bank of England policy meeting. The U.K. central bank is expected to hold its key interest rate at 5%, after kicking off its easing with a 25-bp reduction in August. For now, in the absence of any notable UK data, the direction of the Pound may remain dependent on market sentiment as investors await the BoE’s rate decision.The Euro seems to be consolidating its recent moves following last week’s ECB rate cut. Moreover, ECB President Christine Lagarde dampened expectations for another reduction in borrowing costs next month, stating the rate path was not predetermined and that the central bank would decide rates meeting by meeting, with no pre-commitments.
The U.S. Dollar was dented by growing expectations that the Fed will cut interest rates by 50-basis points at the conclusion of tomorrow’s meeting. In fact, investors are pricing in a 68% chance for a 50 bps cut and a 32% chance for a 25 bps cut. Ultimately, the central bank is expected to kick off an easing cycle that could see interest rates fall by a total of 100-basis points by the year-end.
Data supplied by GC Partners