Interest Rate Decisions In Focus This Week

GBP: This morning, the British Pound is showing little activity as investors are waiting on the sidelines before the Bank of England announces its latest interest rate decision. It's anticipated that the BoE will keep rates steady at 5.25% due to the UK's high core inflation, which is more than double the desired rate. However, investors are interested in the central bank's future rate projections.

EUR: The Euro is weaker today following the European Central Bank's recent meeting where it kept key interest rates unchanged. Despite a decrease in underlying inflation in December, ECB President Christine Lagarde expressed concerns about stagflation in the Eurozone's last quarter of 2023 and highlighted the risks of further economic slowdown. Tomorrow, Germany's GDP figures for the fourth quarter are expected to show a contraction.

USD: The cautious market sentiment this morning has bolstered the US Dollar against other currencies, making it challenging for them to gain momentum. Looking ahead, the Federal Open Market Committee meeting is scheduled for tomorrow and the following day, with no expected changes in interest rates. However, investors will closely monitor the press conference, particularly for any dovish remarks from Fed Chairman Jerome Powell, which could weaken the USD against its counterparts.

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