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Euro falls to a seven week low, BoE holds rates
Powell’s statements rattles markets as the dollar gains ground
Euro hits a seven-week low at $1.077, influenced by the dollars upbeat momentum and Eurozone inflation slowing to 2.8%.
GBP/USD drops to 1.2624 as the BoE maintains rates at 5.25%, with a noteworthy three-way split among committee members.
On the Market Watch!
The Euro and Pound
The euro fell to a seven-week low to $1.077, its lowest level since December 13. The dollar strength was buoyed by the Fed’s statements overnight as Powell pushed back on rate cuts, which ultimately pressured other majors.
Additionally, the Eurozone inflation slowed annually to 2.8% in January, compared to 2.9% in December, while during the same period the core index slowed at 3.3% from 3.4%.
The GBP/USD pair also touched lows of 1.2624, after the BoE kept interest rates unchanged at 5.25%. Six members out of the Monetary Policy Committee opted to maintain the current rate, two advocated for an increase, and one recommended a rate cut. This marked the first instance of a three-way split since the financial crisis in 2008.
Andrew Bailey also indicated that inflation is anticipated to temporarily reach its target of 2% by this summer, which is a year-and-a-half earlier than previously anticipated.
In the US, unemployment claims rose to 224K vs 213k expected vs 215K previous. US stock futures remained flat after yesterday’s slump. Overnight the Dow Jones fell 317 points while the Nasdaq fell the most by 2.2% especially after Microsoft and Alphabet’s miss on revenue.
