Spectrum FX Daily Report

GBP: The British Pound traded in a wide range against its major rivals yesterday, while firming against the U.S. Dollar amid a shift in market sentiment. In fact, an increasing appetite for risk appeared to cushion GBP’s downside following last week’s dovish Bank of England interest rate hold. Looking ahead, a lack of notable releases in the coming days could see the British Pound trade in alignment with global risk dynamics.

EUR: The Euro held its ground yesterday as key economic data releases are relegated to later in the week, leaving investors to focus on statements from policymakers that dot the landscape. In fact, investors continue to look for the catalyst that could create a strong and specific direction in the Euro’s pricing. For now, the picture remains cloudy with investors avoiding big bets.

USD: The U.S. Dollar faced headwinds yesterday amid a lack of macroeconomic releases in the US. Moreover, ramped up expectations that the Federal Reserve could begin to lower interest rates as soon as September 2024 continued to hamper the greenback. Looking forward, focus this week remains squarely on upcoming PCE price index data. The reading is the Federal Reserve’s preferred inflation gauge and is likely to factor into the bank’s outlook on interest rates.

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