Published date: 29 April 2024
GBPEUR
Sterling rejected the downside break out that was driven by last week’s dovish comments from BoE Deputy Governor Ramsden. In true Bank of England style, Chief Economist Huw Pill disagreed and suggested that current inflation levels are still too high to initiate rate cuts. This prompted a sterling recovery, assisted by services sector PMI data, which once again beat expectations (54.9 vs expected 53).
GBPUSD
As expected, GBPUSD has bounced from egregiously oversold conditions, as the prior week’s dovish comments from BoE’s Ramsden were counterpunched by BoE’s economist Huw Pill who pushed back on imminent rate cuts. Allied to this, some hotter US PCE inflation data has been unable to inspire a lasting rally in an already crowded dollar position in the market. The US dominates the news flow for this week.
EURUSD
EURUSD recorded modest gains throughout the week due to a mixture of solid PMI data, a positive German business climate survey, and mixed US data. However, despite these factors, the dollar did not strengthen significantly. This week, European inflation data is the key release this side of the pond, with some hefty dollar drivers in the form of Wednesday’s FOMC meeting and Friday’s Non-Farm Payrolls.
