The British Pound plummeted to its lowest level this month on Friday, after statistics revealed that UK consumer spending stagnated in February and BoE Governor Andrew Bailey suggested rate cuts “were in play” this year. Since the BoE’s decision on Thursday, markets expect three cuts, most likely beginning in June, bringing the Bank closer to the timetable of rate decreases from the Federal Reserve and the European Central Bank.
The Euro traded uneven last week, with increased anticipation that the European Central Bank would begin decreasing interest rates sooner rather than later. In reality, financial markets predict at least three 25-basis-point changes, the first of which will occur in June or July. Furthermore, mounting anticipation that the ECB will be the second major central bank to slash interest rates following the Swiss National Bank’s surprise action last week weighs on the Euro.
The US dollar surged substantially last Friday following the Swiss National Bank’s unexpected decrease, which portrayed the Federal Reserve in a more hawkish perspective. Furthermore, the US central bank dramatically increased its forecast for growth in 2024, and Thursday’s statistics revealed that the US economy remained on strong ground as the number of Americans submitting new unemployment claims unexpectedly dropped last week.
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