Eurozone inflation falls to 2.5%
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Daily Currency Update
The pound has remained stable at the start of this week as the UK's General Election approaches, with a Labour majority widely expected according to polls and bookmakers so it will just be how big the win is that will be of interest. Despite the upcoming election, the pound has shown little movement since Prime Minister Rishi Sunak announced the election six weeks ago, indicating that markets are not overly concerned about the potential changes in fiscal policy a Labour victory might bring.This week has been quiet in terms of significant economic data from the UK. The GBP/USD exchange rate is rangebound just below 1.27, while GBP/EUR is also stable around the 1.18 level.
Key Movers
Eurozone inflation data released yesterday showed a slight decrease in the overall reading from 2.6% to 2.5%, while the core reading, which excludes food and fuel costs, remained steady at 2.9%. Despite this, the euro remained unchanged, with markets still anticipating one or two more rate cuts from the European Central Bank (ECB) this year. ECB President Christine Lagarde is scheduled to speak this afternoon, and her comments may provide further insights into how the latest inflation figures could impact future interest rate decisions.In the US, the minutes from the Federal Reserve's last policy meeting will be released this evening. Markets are currently expecting an interest rate cut sometime after September. Meanwhile, the EUR/USD exchange rate has risen to 1.0750, though significant volatility is possible early next week following the second round of voting in the French parliamentary elections.
Expected Ranges
- GBP/USD: 1.2615 - 1.2740 ▲
- GBP/EUR: 1.1760 - 1.1860 ▲
- GBP/AUD: 1.8915 - 1.9080 ▼
- EUR/USD: 1.0690 - 1.0800 ▲