Home Daily Commentaries US CPI softens, prompting earlier Fed rate cut

US CPI softens, prompting earlier Fed rate cut

See Wah Li
Written by
See Wah Li

See Wah Li

OFXpert

With more than 6 years of experience in the foreign exchange market, See Wah’s strength lies in developing effective solutions to help navigate the complexities of currency fluctuations.

| Thursday 16 May, 2024

Daily Currency Update

The US dollar encountered setbacks against various currencies due to the release of US core inflation data, revealing its slowest pace in three years. This prompted earlier projections for rate cuts in the world's largest economy.

In April, core CPI decelerated to an annualized rate of 3.6%, in line with market forecasts. This, coupled with stagnant retail sales data, suggests an increasing probability of conducive conditions for rate reductions.

Last month's US retail sales figures remained stagnant instead of the anticipated 0.4% gain projected by economists, further reinforcing the notion of a slowing economy.

Key Movers

Market observers continue in viewing the ECB as the likely frontrunner among the major global central banks to implement rate cuts, with June almost unanimously anticipated by traders. However, the Bank of England could promptly follow suit, as its policy decision on June 20 remains uncertain.

Expected Ranges

  • GBP/USD: 1.2645 - 1.2725 ▲
  • GBP/EUR: 1.1625 - 1.1695 ▲
  • GBP/AUD: 1.8885 - 1.8995 ▼
  • EUR/USD: 1.0855 - 1.0915 ▲

Written by

See Wah Li

OFXpert

See Wah is passionate about supporting positive transformations when it comes to managing foreign exchange. As a Senior Currency Consultant at OFX, his goal is to help businesses make informed decisions, alleviate risks, and enhance their currency strategies for success. With over 6 years of experience in the foreign exchange market, See Wah’s strength lies in developing effective solutions to help navigate the complexities of currency fluctuations and mitigate their impacts on business profitability.