The British Pound rebounded to a certain extent against the dollar after a period of decline in reaction to the release of UK inflation data which declined less than anticipated.
The 3.2% reading for March was above consensus value although it continued to slow. Inflation data affected interest cut expectations as traders potentially see only one cut this year from the Bank of England.
Attention could now turn to Friday’s retail sales data for March, where stronger-than-expected readings could further bolster the pound.
Across the Atlantic, the US dollar was under some pressure after a series of gains but could maintain its strength as expectations that interest rates could remain high for longer remain after US data and Fed Chair Jerome Powell’s remarks yesterday.
With more Federal Reserve officials scheduled to speak soon, the market is anticipating that they will reflect Powell’s stance, emphasizing that any decisions regarding interest rate adjustments will depend upon inflationary trends, which could continue to support a strong dollar in the near term.
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