UK unemployment ticks higher
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Daily Currency Update
In the UK, the Bank of England remains deeply concerned with inflation and the associated pressures, yet it is anticipated that members of the Monetary Policy Committee (MPC) will prioritize achieving their 2% CPI target over closely examining the fluctuating labour market indicators. Unemployment has risen for the third consecutive month, offering rate setters further assurance of a slowdown in the job market, as the jobless rate reaches its highest level since the previous summer.Market sentiment indicates a downward trend for UK inflation, with expectations for next week's CPI release to confirm this trajectory. This fosters optimism for an interest rate cut in June.
Key Movers
In the recent week, market sentiments have shifted, gradually reducing their expectations for the ECB to implement further rate cuts beyond June. Although considerable effort will be required to dissuade the ECB from its initial cut in June, as communication has solidified market anticipations—around 25 basis points have consistently been factored in.Today, the market will look forward to insights from Klaas Knot of the European Central Bank, who will be sharing the platform with Powell, alongside Isabel Schnabel. Both are known for their aggressive stances, so it's likely we'll hear some words of caution regarding future monetary easing plans beyond June.
Expected Ranges
- GBP/USD: 1.2525 - 1.2595 ▲
- GBP/EUR: 1.1585 - 1.1655 ▼
- GBP/AUD: 1.8935 - 1.9035 ▼
- EUR/USD: 1.0755 - 1.0835 ▲