Published: 29/07/2024 By ECAP
The British Pound has been consolidating its recent moves ahead of this week’s Bank of England meeting on Thursday. The markets forecast 50% odds of a quarter-point rate cut, although views are split on whether the cut will occur now or at the next meeting in September. A firm commitment to a September rate cut would make this a dovish hold, which is not entirely consistent with a rebound in the Pound.The Euro was relatively flat as investors await more cues from preliminary GDP data for the second quarter from Germany and the Eurozone. In the case of stronger than expected readings, this could lift the shared currency against its peers. Looking forward, key pan-EU Harmonized Index of Consumer Prices inflation figures will drop on Wednesday, giving investors a key look into when they could expect a follow-up rate cut from the ECB.
The U.S. Dollar extended losses after PCE price index data showed some easing in inflation on Friday. The reading ramped up bets that the Fed was close to gaining enough confidence to begin cutting rates by September. Focus this week is squarely on the Fed’s meeting, where the central bank is expected to keep rates unchanged. However, investors will be watching for any cues from the central bank on when it plans to begin trimming rates.
Data supplied by GC Partners