Published: 24/01/2024 By ECAPThe British Pound extended its gains from end of last week as UK public borrowing in December massively undershot expectations. Consequently, any expansion in government spending could boost economic growth and delay the first rate cut at the Bank of England, which are both supportive developments. Looking forward, investors await the release of January’s UK advanced Manufacturing and Services PMI for fresh impetus.
The Euro faced downward pressure following yesterday’s preliminary Consumer Confidence data, indicating a decrease in consumer trust regarding economic activity. Looking forward, market participants await tomorrow’s central bank meeting. The ECB has generally predicted a stable interest rate environment until the summer months unless there are significant shifts in the underlying economic indicators.
The greenback marked a strong start to 2024 as inflation and labour market data saw investors scale back expectations for early interest rate cuts by the Fed. This notion was exacerbated by a series of hawkish comments from Fed officials over the past week. Focus now turns to fourth-quarter gross domestic product data, due tomorrow, and PCE price index data due on Friday.
Data supplied by GC Partners