Published: 29/01/2024 By ECAPThe British Pound remains lacklustre in this morning’s trading session as investors appear to have sidelined ahead of the interest rate announcement by the Bank of England. Market participants see the BoE maintaining interest rates unchanged at 5.25% for the fourth time in a row as core inflation in the UK remains more than double the desired rate of 2%. However, investors will keenly focus on the interest rate outlook provided by the central bank.
The Euro was on the back foot this morning following last week’s ECB meeting where key interest rates were left unchanged as underlying inflation declined in December last year. However, ECB President Christine Lagarde warned that the Eurozone most likely experienced stagflation in the last quarter of 2023 and outlined the risks of further economic slowdown. Looking forward, the German GDP figures for the fourth quarter will be released tomorrow and is forecasted to contract by 0.3% QoQ and 0.2% YoY
This morning’s cautious market mood has helped the US Dollar stay resilient against its rivals and makes it difficult for other currencies to gather bullish momentum. Looking forward, the FOMC meeting will take place between tomorrow and the day after, with no change in rate expected. However, the press conference will be closely watched by investors. If Fed Chairman Jerome Powell delivers dovish comments, the USD will likely weaken against its rivals.
Data supplied by GC Partners