Inflation eases in the US
Daily Currency Update
The UK economy's growth slowed significantly in October, contracting by 0.3% month-on-month, falling short of market expectations for a flat reading. This marked a deceleration from the 0.2% growth recorded in September. Year-on-year growth also disappointed, expanding by only 0.3%, less than half the 0.6% forecast and well below the 1.3% growth registered in September.The three-month rolling average of GDP remained stagnant at 0% in October, unchanged from the prior month but below the consensus estimate of 0.1%. Manufacturing production exhibited a similar pattern, rising by 0.8% year-on-year, half the 1.9% anticipated and significantly lower than the 3.0% recorded in September. Industrial production, a broader measure of manufacturing and mining activity, contracted by 0.8% year-on-year in October, down from 0% in September and below the -0.1% expected by market analysts.
Key Movers
Inflation in the US eased in November, with the CPI increasing by a modest 0.1%, a slight improvement from the flat reading in October. However, the year-over-year inflation rate declined to 3.1% from 3.2%, suggesting a continued cooling of price pressures. This development has bolstered expectations for a pause in the Federal Reserve's rate-hiking campaign, with some market participants even forecasting a rate cut as early as May. Futures markets project a more aggressive easing path in 2024, with rates potentially falling by up to 1.25 percentage points. However, the CNBC Fed Survey suggests a more measured approach, with the central bank likely to make three rate cuts, assuming quarter-percentage-point increments.Expected Ranges
- GBP/USD: 1.25172 - 1.25706 ▼
- GBP/EUR: 1.16063 - 1.16425 ▼
- GBP/AUD: 1.91036 - 1.91748 ▲
- EUR/USD: 1.07801 - 1.07997 ▼