Published by: ECAP
INFLATION DATA
The British Pound strengthened after UK inflation rose to 3.3% in March, with service-sector price pressures accelerating, reinforcing expectations that interest rates could still rise later this year. While overall policy expectations were largely unchanged, persistent domestic inflation supported Sterling. With little movement elsewhere, focus shifts to upcoming PMI data, where slowing UK growth may limit gains but ongoing cost pressures could provide underlying support.
The Euro lacked clear direction amid an absence of fresh Eurozone data, leaving it without strong domestic support. Broader market trends offered only limited assistance, keeping the currency subdued. Attention now turns to upcoming PMI releases, where signs of slowing private-sector activity could weigh further, though any indications of persistent cost pressures may help stabilise sentiment and prevent deeper weakness.
The US Dollar weakened slightly as improving global risk sentiment reduced demand for safe-haven assets, following easing geopolitical tensions tied to a ceasefire extension involving Iran. Despite this, losses were limited due to ongoing uncertainty, including unresolved diplomatic conditions. Market caution persists, with sentiment remaining the primary driver; renewed tensions could quickly restore the Dollar’s appeal as a defensive asset.
Data supplied by GC Partners