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It’s been a weak start to the month for European markets as investors weigh the messaging from both the Federal Reserve and the Bank of England, which appears to be that rate cuts are coming, just not as soon as markets were hoping 24 hours ago, prompting some modest weakness across the board.
The narrative of the last mile of disinflation being the hardest, which in 2023 became popular in the world of central banking, reflects concern that after having dropped significantly, further declines in inflation would be more difficult.However, it seems that relevance of this narrative is increasingly being questioned.
AUD/USD has come under pressure following the soft inflation data from Australia.
The US Dollar (USD) stays resilient against its rivals. Economists at ING analyze Greenback’s outlook ahead of the Federal Open Market Committee (FOMC) event.
GBP/USD trades around 1.2675 levels. Economists at OCBC Bank analyze Cable’s outlook ahead of the Bank of England (BoE) meeting on Thursday.