Published: 19/07/2024 By ECAP
The British Pound failed to catch bids during yesterday’s trading session following the release of UK’s latest labour data. In fact, the mixed data served to revive interest rate cut bets for August, with the odds of a rate cut increasing from 35% to 40% in the wake of the release. This ultimately weighed on GBP exchange rates as the currency struggled to garner investor attention.The Euro held its ground as the European Central Bank left all three key interest rates unchanged yesterday, fully in line with market expectations. However, with Europe now approaching its holiday season, the quarterly ECB staff macroeconomics projections at the September 12th meeting will become key. These projections serve as a crucial input for the ECB Governing Council's evaluation of economic trends and potential risks to price stability.
The U.S. Dollar rose further in overnight trade, benefiting from safe-haven demand even as bets on interest rate cuts persisted. In fact, concerns over a renewed trade war between the US and China, along with persistent geopolitical tensions, tempered investors' appetite for riskier assets. Ultimately, this scenario has helped the safe-haven buck build on its recovery from its recent multi-month lows.
Data supplied by GC Partners