Home Daily Commentaries US inflation drops, Fed hold interest rates again

US inflation drops, Fed hold interest rates again

Daily Currency Update

Major currencies strengthened against the US dollar yesterday due to softer-than-expected US inflation data.

The initial gains were more pronounced after the US inflation report revealed that consumer prices were flat month-to-month in May, contrary to market expectations of a 0.1% increase.

Later in the evening, the Federal Reserve kept interest rates steady at 5.25-5.5%. Additionally, the policymakers' projection for rate cuts this year decreased to just one, down from three in March and five at the beginning of 2024.

Key Movers

Yesterday's mixed data release from the UK had minimal impact on the pound. The GDP month-on-month figure met expectations at 0.0%, causing little market movement. Today, attention shifts to the BOE quarterly bulletin, which will primarily offer commentary on market developments and monetary policy operations. No major economic data is expected.

Expected Ranges

  • GBP/USD: 1.2755 - 1.2815 ▲
  • GBP/EUR: 1.1805 - 1.1865 ▲
  • GBP/AUD: 1.9185 - 1.9285 ▲
  • EUR/USD: 1.0795 - 1.0865 ▲

Written by

See Wah Li


See Wah is passionate about supporting positive transformations when it comes to managing foreign exchange. As a Senior Currency Consultant at OFX, his goal is to help businesses make informed decisions, alleviate risks, and enhance their currency strategies for success. With over 6 years of experience in the foreign exchange market, See Wah’s strength lies in developing effective solutions to help navigate the complexities of currency fluctuations and mitigate their impacts on business profitability.