Daily Spectrum FX Report

GBP: The British Pound is walking a well-trodden path against the Euro and Dollar, with current Pound-Euro and Pound-Dollar exchange rates seemingly unwilling to budge. In fact, a relatively sanguine economic outlook, belied by the flat economy and steady communications from the Bank of England regarding interest rate policy, have contributed to the low-volatility environment.

EUR: The Euro stumbled for the second straight day against the US Dollar as investors assessed recent data. Looking forward, market participants await a further slew of eurozone data with German Retail Sales and Consumer Price Index numbers to be released later in the session. Tomorrow will round out the week with pan-European Harmonized Index of Consumer Prices inflation.

USD: The U.S. Dollar firmed in early European trade yesterday, shrugging off signs of U.S. economic weakness ahead of the release of today’s key inflation data. A stickier than expected reading could prompt the Fed to delay rate cuts further. For now, markets have largely priced out a rate cut at both the Fed's March and May meeting, and the chance of a cut in June is seen as largely 50:50.

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