The British Pound remains weak in this morning’s trading session, as investors appear to have stayed away ahead of the Bank of England’s interest rate decision. Market participants expect the BoE to keep interest rates steady at 5.25% for the fourth time in a row, as core inflation in the UK remained more than double the target rate of 2%. However, investors will be closely watching the central bank’s interest rate outlook.

The Euro went down this morning following last week’s ECB meeting, where key interest rates were remained unchanged while underlying inflation fell in December last year. However, ECB President Christine Lagarde cautioned that the Eurozone would most likely see stagflation in the fourth quarter of 2023, highlighting the risks of additional economic decline. Looking forward, German GDP numbers for the fourth quarter will be revealed tomorrow and are expected to fall by 0.3% QoQ and 0.2% YoY.

This morning’s cautious market tone has helped the US Dollar maintain its resilience against its rivals, making it difficult for other currencies to acquire bullish momentum. Looking ahead, the FOMC meeting is scheduled for tomorrow and the next day, with no rate move forecast. However, investors will be paying great attention to the news conference. If Fed Chairman Jerome Powell makes dovish remarks, the USD is likely to decline against its peers.

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