Published: 20/03/2024 By ECAP
The British Pound turned volatile this morning as the UK’s Office for National Statistics reported softer than expected inflation data for February. Annual headline and core inflation decelerated to 3.4% and 4.5%, respectively. Lower inflation is expected to allow Bank of England policymakers to consider cutting interest rates earlier than what market participants had anticipated.The Euro retreated and lost further ground yesterday even though the latest ZEW Financial Market Survey showed a sharp rise in Euro Area and German economic optimism, beating market forecasts by a margin. While the improved sentiment data paints a marginally better economic picture for the EU, it hasn’t done much to help a currently struggling single currency.
The U.S. Dollar rose slightly in Asian trade and sits at a two week high against a basket of currencies as investors await the Federal Open Market Committee's monetary policy meeting later in the day. The central bank is widely expected to keep interest rates unchanged. However, any signals on potential rate cuts, specifically from a press conference with Fed Chair Jerome Powell after the meeting, will be awaited.
Data supplied by GC Partners