The anticipation that the UK central bank’s policy-easing cycle will be slower than those of other major central banks has given the British Pound some support, and it continues to muster some strength. Although it was too soon to declare triumph, BoE Governor Andrew Bailey stated on Friday that he was “cautiously optimistic” about inflation.
The recent data release indicating a dismal growth prognosis for the Eurozone caused the Euro to fall. This has led to speculation that the European Central Bank will drop rates once more in September. Now, all eyes will be on the first reading of the August inflation statistics for Germany and the Eurozone, which are anticipated later this week.
In Asian trading, the US dollar slightly increased after climbing 0.2% from its 13-month lows yesterday. Despite dovish indications from the Federal Reserve, betting on U.S. interest rate cuts continued to cast a shadow over the dollar’s prospects. With markets still undecided on whether to cut rates by 25 or 50 basis points in September, this idea offers a more optimistic picture for risk-sensitive currencies.
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