Published: 29/11/2023 By ECAPThe British Pound is finding support as "the message is getting through" that the Bank of England is serious about keeping interest rates at 5.25% for longer than the market expects. In fact, Bailey reinforced the message on Monday when he told a regional newspaper that he was concerned the fight against inflation would get tougher.
The Euro extended its winning streak against the U.S. Dollar for the fifth consecutive session yesterday, benefitting from a softer greenback. Looking forward, market participants are likely to keep a close eye on economic data related to the ECB. In fact, Spain and Germany are expected to release preliminary Consumer Price Index data for November, and both countries are anticipated to report a slowing in the annual inflation rate.
The U.S. Dollar now hovers near four-month lows against a basket of currencies as less hawkish signals from Federal Reserve officials ramped up hopes for an early interest rate cut in 2024. Looking forward, investors will shift their focus to the preliminary GDP data annualized for the third quarter. Moreover, the Federal Reserve will release the Beige Book later in the session, which will give a picture of the overall US economic growth.
Data supplied by GC Partners