Economic Updates in Major Currencies.

  • USD stabilizes around 104 mark, awaiting US PCE price index report for further direction.
  • Fed Governor Christopher Waller hints at holding off interest rate cuts amid strong inflation data.
  • EUR faces gloomy outlook with German economy expected to expand minimally in 2024.
  • ECB anticipated to cut borrowing rates by 25 basis points in June to stimulate growth.
  • GBP steadies as British businesses trim staffing and wage increase plans, with market expectations adjusting for potential Bank of England rate cuts.

USD: Stabilizing Around Key Levels Ahead of Crucial Data

The dollar index hovers just above the 104 mark in Thursday’s Asian session, as investors await crucial data for further cues. Eyes are set on the upcoming US PCE price index report, a pivotal measure for the Federal Reserve’s inflation outlook. Fed Governor Christopher Waller’s remarks signal a cautious approach, suggesting the central bank may hold off on interest rate cuts amid robust inflation data. With the dollar index near a three-week high at 104.09 and US treasury yields slightly up at 4.21%, market attention remains on EURUSD and GBPUSD, both trading flat.

EUR: Gloomy Outlook for German Economy

Five leading economic research institutes forecast minimal growth for the German economy in 2024, with a downward revision to GDP projections. Economic contraction in Q3 and Q4 of 2023 highlights ongoing challenges. Anticipation mounts for ECB intervention, with expectations of a 25 basis point rate cut at the upcoming June meeting to stimulate growth.

GBP: Sterling Steadies Amidst Economic Signals

Sterling stabilizes as British businesses show cautious optimism, trimming staffing and wage increase plans. The Bank of England monitors inflation pressures, with market expectations adjusting for potential interest rate cuts. Despite uncertainties, supportive survey data suggests resilience in the UK recovery narrative, influencing GBP momentum against major currencies.

*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time. CentralFX are not responsible for the rates shown.