 British Pound held steady following release of UK data showing decrease in both headline and core consumer inflation for May. This development is unlikely to influence BoE decision tomorrow, where a rate hold is widely anticipated. Although BoE is expected to begin cutting interest rates soon, this plan has been delayed due to the unexpected call for general elections on July 4. Market consensus now points to August as the likely time for the start of monetary policy easing. Traders will be looking for clues from tomorrow's statement and possibly the voting results to solidify this expectation. Meanwhile, Australian Dollar is currently the strongest currency, buoyed by RBA recent communications. RBA has expressed uncertainty about the disinflation process staying on track and voiced concerns over persistent price pressures. This has led the market to speculate on the possibility of another rate hike, even though this is not the baseline expectation among most economists. The situation, however, could change significantly with the Q2 CPI data due in July, which will clarify the outlook for RBA's decision in August... |
