Published: 30/05/2024 By ECAP
The British Pound was left exposed to global risk dynamics yesterday due to a lack of domestic data, with the increasingly risk-sensitive currency falling against its stronger peers. However, the recent shift in Bank of England interest rate cut expectations put a floor under GBP. In fact, the chance of a rate cut in June is now vanishingly small. Looking ahead, UK economic data remains thin on the ground for today’s session. As a result, Sterling may trade without a clear trajectory.The Euro’s strong negative correlation with the US dollar stifled the Euro’s upside potential yesterday, as investors favoured the U.S. Dollar. Nevertheless, an acceleration in German inflation in May and stronger German consumer confidence results both helped the single currency firm against its weaker rivals. Looking forward, positive Eurozone data could lift the bloc’s single currency today. Analysts expect unemployment in the bloc to have held at a record low in April and economic sentiment to have improved in May.
The U.S. Dollar rose slightly in Asian trade, extending yesterday’s strong gains and reaching its highest levels since mid-May. The move comes as investors remained largely biased towards the greenback amid increasing conviction that the Fed will not cut interest rates any time soon. Looking forward, a revised reading on first quarter GDP is due later today and is expected to show continued resilience in the U.S. economy.
Data supplied by GC Partners