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Slim chances of a US rate cut in June
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Daily Currency Update
The market in the US is currently anticipating 1-2 interest rate cuts by the Federal Reserve in the coming year. However, despite this anticipation, key US central bank figures, such as Fed Chair Jay Powell, have not provided any clear signals on the timing of these rate cuts this week. This has made prospects for a June cut dim, suggesting that the first reduction may not occur until September. Jerome Powell refrained from offering any insights into when and to what degree interest rate cuts might occur, emphasizing the necessity for prolonged restrictive policy. This reluctance to signal potential rate cuts has increased uncertainty, reinforcing the notion that a “higher for longer” approach is likely.Key Movers
In the eurozone, the market was close to reaching a consensus that a reduction in interest rates was likely to happen at the ECB’s Governing Council meeting in June. However, Christine Lagarde, who is usually cautious, expressed a desire for rate cuts to commence promptly. Robert Holzman, the leading hawk on the committee and Governor of the Austrian Central Bank, raised concerns. He cited the escalating tensions between Israel and Iran, driven by the current geopolitical landscape, as grounds for reconsideration.Expected Ranges
- GBP/USD: 1.2405 – 1.2495 ▼
- GBP/EUR: 1.1645 – 1.715 ▲
- EUR/USD: 1.0635 – 1.0695 ▼
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