Wednesday 19th February
· Mixed UK inflation.
· Despite a rise in CPI, the services component sees only a slight increase.
Recap
· USD finished the day slightly stronger after Fed members Daly and Waller signalled that interest rates should remain on hold until further inflation progress is made.
· GBP saw modest support following job data showing slightly stronger wage growth in the three months leading up to December, indicating ongoing inflationary pressures.
· Bank of England Governor Bailey attempted to downplay expectations of an inflation uptick in the coming months.
· Canada's Core CPI for January came in at 2.7% (vs. 2.4% expected), underscoring persistent inflationary pressures in the economy.
Today’s Rates
Today's Interbank Rates at 10:25 am against GBP movement.
GBP>EUR – 1.2084
GBP>USD – 1.2601
EUR>GBP – 0.8274
EUR>USD – 1.0427
GBP>CAD – 1.7897
GBP>AUD – 1.9828
GBP>SEK – 13.512
GBP>CHF – 1.1398
GBP>PLN – 5.0322
GBP>AED – 4.6266
GBP>HKD – 9.7981
GBP>ZAR – 23.200
Today’s Key Takeaways
UK CPI came in higher than expected at 3.0% YoY (vs. 2.8% expected), but the services component saw a smaller-than-anticipated increase.
· This is positive news for the Bank of England as it suggests moderating inflation pressures in the services sector.
· GBP performance remains mixed, with no clear direction from the data.
Market outlook:
· A calm trading day is expected, with little market-moving data scheduled.
· The key event is the release of the latest FOMC meeting minutes this evening.
· No major surprises are anticipated, as Fed Chair Powell and other key members have already shared their post-meeting insights.
19th February 2025
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