Market Report : 21.03.2024

Published: 21/03/2024 By ECAP

The British Pound seems to be gathering some strength ahead of the Bank of England’s interest rate decision. The BoE is widely anticipated to keep interest rates unchanged at 5.25%. However, investors will look for cues about when the BoE will start lowering key borrowing rates. Currently, expectations are firm for a rate cut in the August policy meeting.

The Euro held its ground yesterday even though ECB President Christine Lagarde stated that policymakers would consider cutting interest rates in the June meeting as incoming data should provide more insight into the inflation trajectory and the labour market condition. For now, markets expect three rate cuts from the ECB by December.

The U.S. Dollar tumbled from two-week highs after comments from the Federal Reserve kept expectations of interest rate cuts largely in play. In fact, even though the Fed kept interest rates steady, the central bank maintained its forecast for a 75-basis point reduction in rates this year. The move, particularly the Fed’s outlook, ramped up appetite for high-yielding, risk-driven assets.

Data supplied by GC Partners