Dollar On Track For Weekly Decline

The pound fell yesterday against the dollar, retreating below the 1.2000 level as the market digested some rather dovish comments from BoE officials including Huw Pill and Silvana Tenreyro, the?latter of whom?noted that energy is the biggest driver of inflation (and nothing absolutely to do with the bank creating currency out of thin air,) but may not lead to persistent inflation. And to back up the thesis, data from the BoE Monthly Decision Maker Panel showed a decline in inflation expectations.

Whilst the US dollar index , which measures the dollar against its major peers, eased 0.11% to 104.85 in early Asian markets, yesterday saw the DXY briefly reclaim the 105.00 level, after positive jobs data showed jobless claims remained below 200k. However, commentary from the Fed's Bostic, poured cold water on further gains after warning the Fed may have to do more on the peak rate but suggested a potential pause in raising rates from mid-to-late summer. We also saw a poll of analysists that said recent dollar strength is temporary, and the currency will weaken over the course of the year amid an improving global economy and expectations the Fed will stop hiking interest rates well ahead of the European Central Bank.

The euro was weaker yesterday, despite the hotter-than-expected inflation data. We also saw the minutes from the ECB policymakers meeting last month, which showed there were split in their interpretation of inflation trends and the type of signal they should send about their next rate move.

TODAY's UK ECONOMIC DATA RELEASE:

Final Services PMI

TODAY's US ECONOMIC DATA RELEASE:

ISM Services?

TODAY's EU ECONOMIC DATA RELEASES:

Eurozone final services PMI?

Germany trade data?