26/07/2024
Written by: Ian Morley
Summary:
The US dollar maintained its strength despite slightly lower-than-expected PPI numbers, pushing both GBPUSD and EURUSD to new lows for 2024. The European Central Bank (ECB) kept rates unchanged as anticipated but hinted at a 0.25% rate cut in June, contributing to the euro’s weakness.
Speeches:
Market Insight:
The UK’s GDP figures for February indicated a second consecutive month of growth, suggesting recovery from last year’s recession, albeit at a modest rate of 0.1%. The narrative surrounding diverging growth and rate policies between the US and UK/EU is gaining traction, reflected in the strengthening US dollar. We’re monitoring GBPUSD and EURUSD closely, particularly for a close below their 2024 lows, which could signal further downward movement, potentially approaching the lows of November 2023. Any hawkish commentary from the Federal Reserve could amplify USD gains. The ECB’s recent meeting and commentary heighten the possibility of it being the first to cut rates, pressuring the euro.
Analysis:
Given the USD’s upward momentum driven by higher yields and differing growth and rate outlooks, we’re particularly interested in how GBPUSD and EURUSD will close today, with their 2024 lows serving as critical indicators. A weekly close below these levels may signal a path toward the lows of November 2023.