Published: 26/07/2024 By ECAP
The British Pound seems to be losing momentum as the BoE is now anticipated to cut rates to 5% at its August meeting next week, according to a majority of economists in a Reuters poll. Additionally, UBS analysts noted that not only is the BoE is expected to deliver the first 25-basis points cut in early August, but a second cut of 25-basis points should follow in November, bringing the interest rate to 4.75% by the end of 2024.The Euro has encountered difficulties as the near-term European Central Bank’s outlook remains uncertain due to strong expectations of additional rate cuts. The ECB is anticipated to lower interest rates two more times this year, as price pressures are expected to persist at current levels throughout the year and only return to the bank’s target in 2025.
The U.S. Dollar steadied this morning after seeing some resilience on stronger than expected gross domestic product data for the second quarter. The reading pushed up hopes that the U.S. economy was headed for a soft landing, where growth will remain steady while inflation eases. Focus is now squarely on PCE price index data. The reading is due later today and is expected to show inflation eased further in June.
Data supplied by GC Partners