Home Daily Commentaries UK data ease pressure on Bank of England

UK data ease pressure on Bank of England

Wednesday 25 January, 2023

Daily Currency Update

On Tuesday, UK PMI data highlighted a further decline in cost pressures, which eased back to their lowest since April 2021 and softened pressure on the Bank of England. However, wage pressures may be the key driver behind rising business expenses, which could make the Bank of England more aggressive in the short term when looking at its tightening policy. Inflation and wage growth remain the key focal points for the Bank of England. Despite a weak macroeconomic environment, the BoE remains resolute in bringing inflation to target.

Key Movers

The US dollar continued to edge lower against the euro on Tuesday after data showed euro zone business activity made a surprise return to modest growth in January, while US business activity shrank for a seventh straight month. Wednesday morning started with little change for EUR/USD, with the market waiting for the release of US fourth-quarter GDP figures on Thursday.

Expected Ranges

  • GBP/USD: 1.2305 - 1.2385 ▲
  • GBP/EUR: 1.1305 - 1.1365 ▲
  • EUR/USD: 1.0855 - 4.0925 ▲