- Data released this morning confirmed that the UK suffered a technical recession after GDP for the fourth quarter came in as expected at -0.3%. Clearly the economy has struggled with high interest rates and a cost-of-living crisis – however it’s not all doom and gloom for the government in an election year. There are some green shoots, with retail sales and housing indicators showing some signs of recovery and recent monthly GDP data improving. Inflation is moving in the right direction and expected to drop below 2% in the coming months as energy bills fall. The slightly more positive outlook should allow the BoE to start to reduce interest rates in time, however the pound remains stuck in a range although is currently at the lower area of its recent range hovering just above 1.26.
- The Japanese yen remains under the spotlight, recovering a touch from its multi-year lows against the US dollar. 152 remains a likely line in the sand and the greenback lost some ground after Federal Reserve Governor Christopher Waller said that there is no rush to lower interest rates, calling recent inflation data “disappointing.” He said that he wants to see “at least a couple of months of better inflation data” before cutting. A June cut continues to be most likely, but Fed officials remain wary of shifts in inflation and the labor market. Tomorrow’s PCE data and next week’s non-farm payroll prints will both be heavily scrutinized.
- The single currency is a little lower this morning trading close to recent support around 1.0790-1.08. German unemployment data and retail sales are both on the docket and neither are likely to impact EURUSD too much with month ends flows likely to continue to drive markets today. Just to show how range bound EURUSD has been in 2024, January’s month end fixing rate was 1.08, February was 1.0848 and March’s fix could well be somewhere between the two.
We are using cookies to give you the best experience on our website. Download the GPS Cookies Policy for more information. The main types of cookies we use are as follows: strictly necessary cookies, performance cookies, advertisement cookies, and analytics cookies. You can find out more about which cookies we are using or switch them off in settings. Except for strictly essential cookies, you have also the option to decline the usage of cookies at any time. You can do this through this cookie management panel, which appears when you first visit, and you can access it independently through the link provided at the foot of the page.