As expected, the ECB maintained its monetary stance yesterday. However, the meeting statement underlined that if the ECB’s updated assessment of the inflation outlook offers it more confidence that underlying inflation is approaching its 2% target.
President Lagarde stated, that the ECB is not “pre-committing to a particular rate path.”. However, the impact of the ECB meeting on market rate expectations was somewhat muted.
The British Pound was broadly supported after the ONS said the UK economy grew in February and revised its initial estimate for January’s growth earlier this morning.
The pound to euro exchange rate rebounded to the 1.17 level after it was revealed that the UK economy gained 0.1% month on month in February, with January’s number revised up to 0.3% from 0.2%.
Pound to Dollar exchange rate remains weak in the face of the larger U.S. dollar surge that has driven FX activity since the release of positive U.S. labour market and inflation statistics yesterday.
Looking ahead to today, the main highlight will be the preliminary reading of US consumer sentiment for April. Barring any major surprises, though, the data is unlikely to affect the dollar.