US inflation falls further than expected
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Daily Currency Update
Yesterday saw the latest Consumer Price Index reading from the US with inflation falling further than expected to 2.8% y/y from 3%. The faster than expected drop saw some volatility in dollar crosses however there wasn't a big drop in its value as is often the case. Markets are preoccupied with Donald Trump's tariff agenda at present so backward-looking data, like this, is on the backburner for the time being. Canada and the EU said they would impose reciprocal tariffs on the US as Trump's 25% steel and aluminium levies came into effect yesterday. In response, Trump said he would implement further tariffs on the pair. EUR/USD has drifted a little lower overnight with the pair just under 1.09. GBP/USD hit a four-month high of 1.2993 yesterday before receding to around 1.2950.Key Movers
Today’s data includes monthly US Producer Price Index (wholesale inflation) and Unemployment Claims for last week. The latter seems to be gathering more and more attention as the huge amount of recent stock market volatility begins to raise the prospect that the US could possibly be heading for a recession later this year. As usual tariff talk from the President will be the continued main area of interest.Expected Ranges
- GBP/USD: 1.2880 - 1.3040 ▲
- GBP/EUR: 1.1860 - 1.1960 ▲
- GBP/AUD: 2.0470 - 2.0620 ▲
- EUR/USD: 1.0835 - 1.1000 ▼