GBP EUR USD - Dollar Benefits from Hawkish Comments

GBP

GBP weakened fractionally this morning as revised GDP data released by the Office for National Statistics showed the UK economy fell into a technical recession last year.

According to the ONS, the UK economy shrank by 0.3% in the last quarter of the year following on from a 0.1% contraction the month prior. Despite this, the UK economy is expected to have shown some recovery this year with many anticipating 0.2% growth.

Despite the data, GBP has remained fairly stable as markets continue to wait for further cues from the Bank of England as to when rates will be cut.

EUR

The Euro continued its decline from yesterday to today, primarily due to disappointing German Retail Sales figures for February, falling short of expectations. Retail Sales unexpectedly shrank by 1.9% on a monthly basis, contrary to the anticipated 0.3% growth. This underscores a growing concern over the escalating cost of living crisis, exacerbated by the European Central Bank's persistently high interest rates.

USD

This morning, the U.S. Dollar stabilized against major currency counterparts, showing slight improvement benefitting from hawkish comments from FOMC member Christopher Waller.

Waller mentioned that the Fed needs to take a more cautious approach to cuts, pushing back against overly dovish bets.

Added to this, USD is benefitting from risk aversion ahead of The Personal Consumption Expenditures (PCE) price index, favoured by the Federal Reserve as an inflation measure, is scheduled for release tomorrow. Although markets will be closed for the Good Friday holiday, the PCE index reading is anticipated to influence the Federal Reserve's perspective on interest rates.

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