Pound remains high on US Dollar’s weakness

Daily Currency Update

The pound traded in higher territory for the fifth consecutive day during the early Asian session of trading on Tuesday. A positive risk-on sentiment with a decline in the US Dollar is supporting the currency at the current level.

The US labour data towards the end of last week weakened the Federal Reserve's case for rate cuts. Investors have been looking at pricing around a 62% odds of rate cuts in the March meeting, according to the CME FedWatch tool, also the New York Fed's 1-year inflation expectations came in at 3.01% against a reading of 3.36% prior.

These details for the US Dollar show that an inflation decrease can weaken the currency, with the outlook from the Federal Reserve and their next plans.

Raphael Bostic, the US Fed Atlanta President noted on Monday that inflation pressures in the US had developed further than they had expected and that the rise in unemployment is far less than they had expected given the decrease in inflation.