GBPUSD falls as inflation is in focus
The UK’s weak economic data has eased the pressure on Cable to increase interest rates. An uptick in Britain’s unemployment rate combined with slowing wage growth over the past three months has slightly raised the chances of a pause at the BoE’s meeting in June. The price action reflects the market’s adjustment to the shifting odds, even though most participants still expect the central bank to hike rates by a quarter of a point to 4.75%. The CPI report will likely be the market mover, and it is likely that this data will cement the rate consensus. A soft reading can cause a correction. 1.2300. Sterling could also bounce back towards 1.2800.
NZDUSD consolidates before RBNZ decision
A budget that is expansive has stabilized the New Zealand dollar. The market sees the government’s fiscal measures towards helping those struggling with soaring living costs may contribute to the inflationary pressure. Following the RBNZ’s surprisingly hawkish stance at the last meeting, traders have revised their expectations and bet it would increase the official cash rate past the peak of 5.5%. Central bank has some room to maneuver if it believes the economy will avoid recession.