Dollar gains on US inflation uptick
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Daily Currency Update
The latest monthly UK GDP figures have been released this morning with initial estimates showing the economy expanded by 0.2% in January compared to December. This growth undid the fall of 0.1% seen the month before and future figures may show it is currently eking out anaemic growth if recent PMI data is anything to go by. The reading was in line with market expectations which is likely why the pound was relatively unmoved with GBP/USD currently trading just under 1.28 having fallen back yesterday after US inflation data. GBP/EUR continues to trade around 1.17. There is little data of note from the UK for the rest of the week so US releases will be the main area of attention.Key Movers
Yesterday saw this week’s main event with the latest US CPI print showing an unexpected uptick from 3.1% to 3.2% y/y while no change was expected. The slight rise in prices saw the dollar strengthen however it has since given up most of these gains as markets largely shrugged off the minor increase with expectations still that the Federal Reserve will start cutting interest rates from their 23-year high at its June meeting. We will hopefully get a clearer picture of the Fed's thinking at next Wednesday’s interest rate decision which is being accompanied by its latest economic projections. There is little data of note for the rest of the day with tomorrow’s US Producer Price Index the next data that could move forex markets. EUR/USD fell from around 1.0940 to 1.09 after the aforementioned CPI print before paring these losses. It is now around 1.0930.Expected Ranges
- GBP/USD: 1.2750 - 1.2860 ▼
- GBP/EUR: 1.1670 - 1.1760 ▲
- GBP/AUD: 1.9280 - 1.9445 ▲
- EUR/USD: 1.0870 - 1.0980 ▼