Home Daily Commentaries Eurozone CPI in focus

Eurozone CPI in focus

Daily Currency Update

Bank of England governor Andrew Bailey gave a speech about the cost of living squeeze and the future path of interest rates in London, yesterday. He warned there would be no easy way out of the UK’s cost of living crisis and further interest rate rises might be needed to combat inflation. It seems action may also be taken sooner on interest rate hikes as Bailey alluded to the lessons learned in 1970 with an act now or pay later thought process. Manufacturing activity in the US contracted for a fourth consecutive month in February. Despite logging a slight improvement from the month prior, the survey data came in at 47.7 which is below the expansion gauge of 50.00. GBP/USD initially dropped from 1.2085 down to 1.2020 after Bailey’s address, but the losses continue into today’s session after the US manufacturing latest. GBP/EUR has also weakened in the past 24 hours, falling below 1.1250 briefly.

Key Movers

A lot of attention will be on this morning’s preliminary Eurozone consumer price index, especially after preliminary data from Germany, France, and Spain all came in higher than expected. The nation’s results suggest a potential upside to the Eurozone release. Equally scrutinized will be the minutes from the ECB’s latest policy meeting. The Euro has lost some of the gains against the USD ahead of the meeting, falling from 1.0690 down to 1.0620 ahead of these releases. Further losses will be likely if the inflation figure is higher. Later in today’s session we also have US unemployment claims, which will likely have a sway on the currency pair.

Expected Ranges

  • GBP/USD: 1.1930 - 1.2070 ▼
  • GBP/EUR: 1.1210 - 1.1300 ▼
  • GBP/AUD: 1.7710 - 1.7860 ▼
  • EUR/USD: -0.943 - 1.0690 ▼