26/07/2024
Written by: Ian Morley
Summary:
The pound fell at the end of the week following remarks by BoE’s Ramsden indicating reduced concern about UK inflation compared to previous months, echoing Governor Bailey’s dovish comments earlier in the week. Market expectations for a UK interest rate cut have shifted from September to August. USD gains earlier in the day diminished as tensions eased following Israel’s strikes on Iran.
Speeches:
Market Insight:
This week, key events include the release of first-quarter US GDP figures and core PCE numbers, with March’s core PCE number due on Friday. Stronger-than-expected figures would support recent Fed comments and likely boost the USD. Tuesday will bring PMI numbers for April from the EU, UK, and US.
Market sentiment has improved slightly as geopolitical risks are being priced out, though the pound has opened lower as markets reassess the BoE’s rate policy projections.
Analysis:
The pound posted its third consecutive weekly decline as markets adjust expectations for a Bank of England interest rate cut. August appears to be the favoured month for markets, but any repricing for an earlier cut could weigh further on GBP. April’s PMI numbers will be closely watched for signs of economic activity that could shift sentiment towards the currency.