US inflation drops, Fed hold interest rates again
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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 ▲