Currency news

Fed calls for patience on rate cuts

Chief Market Strategist at Equals Money
-
3
min read
Publish date
26/06/24
    • GBP: Manufacturing shows signs of recovery
    • EUR: German business climate declined in June
    • USD: Fed gives out mixed signals


    Yesterday's currency recap

    Currency markets continue to trade sideways ahead of Friday’s key US inflation data, and the upcoming French/UK elections. US Consumer confidence data released yesterday showed the US consumer remains upbeat, adding to the Fed’s “higher for longer” interest rate mantra. Canadian and Australian inflation data came in hotter-than-forecast, reinforcing the argument that the global fight to curb rising prices is far from over.

    The possible outlier being Europe, where anaemic growth and slowing inflation prompted ECB’s Rehn to confirm the market’s pricing for 2 rate cuts this year.

    Today's GBP rates

    Currency pair Daily move* Indicative rate**
    GBPAUD -0.57% 1.8975
    GBPCAD 0.00% 1.7323
    GBPCHF 0.05% 1.1354
    GBPDKK 0.07% 8.8358
    GBPEUR 0.08% 1.1847
    GBPJPY 0.04% 202.6400
    GBPNOK -0.01% 13.4645
    GBPNZD 0.05% 2.0735
    GBPSEK 0.08% 13.3620
    GBPUSD 0.01% 1.2685


    *Daily move - against
    G10 rates at 7:30am, 26.06.24

    ** Indicative rates - interbank rates at 7:30am, 26.06.24

    Key data points

    Currency Event Period Consensus Previous
    EUR German Consumer Confidence Jul -18.90% -20.90%
    GBP CBI Distributive Trades Jun 1 8.00%
    USD Mortgage Applications Jun N/A 0.90%
    USD Building Permits May 1.386m 1.44m
    USD New Home Sales May 0.64m 0.634m

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    What we think

    Market volatility continues to decline, as central bank interest rate calls fall in line with current interest rate pricing. All eyes are now firmly on Friday’s US Core PCE data (Fed’s preferred measure of inflation) for evidence of further progress on taming inflation. The euro remains vulnerable ahead of Sunday’s 1st round of voting in the French Elections.

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    About the author
    Lawrence Kaplin
    Profile
    Chief Market Strategist at Equals Money

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