06/12/2024
Written by: Ian Morley
Summary
In the recent trading session, the currency markets maintained a narrow range, with participants anticipating upcoming economic data. The absence of significant releases led the dollar to closely align with overall market sentiment. A positive shift occurred late in the US session when the Treasury announced reduced borrowing needs for Q1 2024, driving US equities to record highs and causing a moderate easing of the dollar as risk-on currencies strengthened.
Speeches:
· EUR: ECB Lane & Tuominen
Market Analysis
Despite escalating tensions in the Middle East, markets largely overlooked them, focusing instead on upcoming tier 1 macro-economic data. The US FOMC interest rate meeting tomorrow is eagerly anticipated for insights from Fed Chair Powell regarding the potential timing and extent of interest rate adjustments this year.
Noteworthy Events Today
The ECB is set to release its initial estimate of Q4 2023 GDP today, with expectations of a 0.1% contraction in the overall economy. This, following a negative reading in the previous quarter, could indicate that the EU has entered a recession.
In positive news for UK consumers, the British Retail Consortium reported a rare decline in shop price inflation to its lowest level in 18 months, rising by 2.9% compared to 4.3% in December. Sterling traders are eagerly awaiting Thursday’s Bank of England interest rate setting meeting.