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UK inflation falls to lowest level since September 2021
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Daily Currency Update
The inflation rate in the UK has declined for the second month in a row, dropping to 3.2% from the previous month’s 3.4%, which is its lowest level since September 2021. However, this does not necessarily mean that prices are decreasing, but rather that they are increasing at a slower pace. The Bank of England is currently deliberating on when the first interest rate cut should be made. August seems to be the first potential month for the central bank to make rate cuts, but there are now doubts about whether this will happen before autumn. This decision follows a period of raised borrowing costs in response to surging inflation, which has been the highest since the 2008 financial crisis.Key Movers
In the United States, any possibility of a rate cut in the current quarter has been completely dismissed. This is because the majority, if not all, members of the committee agree with the stance of Fed Chairman Jerome Powell, who has been consistently hawkish since he announced an end to the cycle of rate cuts.The upcoming FOMC meeting, which is scheduled for three weeks from today, has caused the market to anticipate a more hawkish tone in the statement. This could potentially lead to a reduction in the projected number of cuts for the year.
Expected Ranges
- GBP/USD: 1.2405 – 1.2485 ▼
- GBP/EUR: 1.1695 – 1.1755 ▲
- EUR/USD: 1.0585 – 1.0645 ▼
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