Published: 30/01/2024 By ECAPThe British Pound was January's best-performing major currency, held aloft by broadly constructive global risk sentiment and a retreat in expectations for the scale of BoE interest rate cuts due in the coming months. However, financial markets expect the Bank to shift its stance on Thursday, a development that could compromise the Pound's recent ascent against its G10 peers.
The Euro started the week on the back foot and touched its lowest level since mid-December against the U.S. Dollar. Yesterday’s move comes as mixed comments from ECB officials weighed on the Euro. ECB Vice President Luis de Guindos said inflation risks were tilted to the downside and ECB policymaker Mario Centeno argued that the central bank should start cutting rate sooner than later.
The U.S. Dollar was relatively flat this morning as markets remain in a cautious mood ahead of tomorrow’s key event from the Federal Open Market Committee. The Federal Reserve is likely to keep its key interest rates steady for the fourth time in a row. However, investors will keenly watch whether the Fed will choose the March or May meeting for the first rate cut after a prolonged “rate-tightening” campaign.
Data supplied by GC Partners