Market Report : 28.01.2024

Published: 28/02/2024 By ECAP

The British Pound continues to tread higher as the UK economic outlook improves. In fact, this was underscored by falling inflation and improving consumer confidence. However, even with fresh evidence of inflation's steady demise, markets continue to anticipate the BoE will remain reluctant to cut rates until at least August. Ultimately, wage dynamics and service price pressures remain inconsistent with a durable attainment of the 2% inflation target.

The Euro was relatively flat this morning but could draw some gains from the recent comments made by the European Central Bank President Christine Lagarde on Monday. Lagarde mentioned that although inflation is steadily approaching the central bank's targets, the ECB is committed to keeping its current policy measures unchanged for the foreseeable future.

The U.S. Dollar inched up as investors brushed off U.S. manufactured goods data and awaited the Federal Reserve's preferred measure of inflation for clues on when the central bank may start cutting interest rates. For now, markets have largely priced out a rate cut at both the Fed's March and May meeting, and the chance of a cut in June sits around 51%.

Data supplied by GC Partners