Central bankers digest last weeks data
Daily Currency Update
The Federal Reserve will issue its latest rate decision with influence from The Bank of England, though no change is anticipated. They could be in a difficult position after the latest UK inflation reading.Gross domestic product (GDP) readings from the eurozone come through this week, with the German reading on Wednesday likely to command particular attention.
Finally, the week is rounded off by the monthly US non-farm payrolls report, with the ADP report preceding it as usual. All in all, it promises to be a busy time for investors.
Key Movers
Pound-Euro's recent rise above the 1.17 level follows a double combination of last Wednesday's solid UK PMI print and Thursday's European Central Bank guidance, resulting in broad-based Euro weakness. One only needs to recall that it was an apparent lack of pushback by the ECB's Lagarde last Thursday that saw investors raise bets for an April rate cut, which resulted in a Euro sell-off. The reality is that defending a 'higher for longer' stance on interest rates is getting harder to defend as the inflation backdrop shows signs of improving.There were also signs of resilience in the US economy last week as fourth-quarter gross domestic product (GDP) beat expectations. The forecast of 2% was met with 3.3% actual, beating expectations for the third consecutive month.
Expected Ranges
- GBP/USD: 1.26901 - 1.27188 ▼
- GBP/EUR: 1.16973 - 1.17301 ▲
- GBP/AUD: 1.92535 - 1.93185 ▲
- EUR/USD: 1.08329 - 1.08500 ▼