Published: 18/12/2024 By ECAP
The British Pound initially retreated after UK inflation in November met expectations, with CPI rising to 2.6%. In fact, high services inflation remains a concern, keeping core inflation elevated. Despite this, the market participants anticipate cautious Bank of England policies, with no immediate rate cuts expected. Ultimately, the Pound's broader trends suggest continued strength against European and commodity currencies.The Euro slipped as the Eurozone's economy showed signs of contraction in December, with its Composite PMI at 49.5, indicating a slowdown. In fact, economic activity shrank as new orders declined, and job cuts accelerated, marking the fastest pace in four years. These challenges, along with reduced business optimism and rising costs, weighed on the Euro, highlighting ongoing struggles within the Eurozone economy heading into 2025.
The U.S. Dollar remained near three-week highs as investors focused on upcoming Federal Reserve cues regarding interest rates. Despite expectations of a 25-basis point rate cut, the Fed's hawkish outlook is likely, driven by persistent inflation and a strong labor market. Moreover, strong retail sales data further supported the Dollar during yesterday’s trading session.
Data supplied by GC Partners