US CPI comes into focus
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Daily Currency Update
The US FOMC meeting minutes were the key data release on Wednesday. Despite concerns about a potential contraction in the next six months, US central bankers view the economic outlook as fundamentally healthy. The minutes indicated that the Federal Reserve is comfortable with current inflation levels, which are close to the Fed's 2% target, and that unemployment remains low. The release provided no new insights for market participants regarding interest rate decisions, shifting attention to upcoming inflation and jobs data to be released in the next 48 hours.In currency markets, GBP/USD has traded within a tight range of 1.3060 to 1.3090 over the past 24 hours, opening at 1.3080. Meanwhile, EUR/USD has drifted lower, falling back below 1.0950 overnight.
Key Movers
The US will hold the macroeconomic headlines today with both unemployment claims and the Consumer Price Index (CPI) set to be released at 1:30 PM. Inflation figures, both month-to-month and year-on-year, are expected to decline, with the yearly percentage projected to be just 0.3% above the Fed’s 2% target. Weekly unemployment claims are anticipated to show a slight uptick.These releases are likely to impact the US dollar significantly, as any indication of worsening or sticky inflation could prompt the Fed to act more quickly on interest rate cuts. Additionally, news from other regions will influence currency movements, including Hurricane Milton, which has recently hit Florida, causing tornadoes and flooding, as well as ongoing tensions in the Middle East.
Expected Ranges
- GBP/USD: 1.3060 - 1.3110 ▼
- GBP/EUR: 1.1920 - 1.1990 ▲
- GBP/AUD: 1.9290 - 1.9530 ▼
- EUR/USD: 1.0910 - 1.0970 ▼