Dear Reader,

Today's overview of economic news and market action

• Cautious mood on markets yesterday …
• Currency-wise, the main FX pairs operated in tight ranges …
• Of the limited moves to note, the dollar firmed while sterling weakened somewhat …
• Sees GBP/USD open back at the $1.28 threshold …
• EUR/GBP is up near the midpoint of 85-86p …
• EUR/USD is in the lower half of $1.09-1.10 …
• US CPI inflation data for February is the main data highlight today …

The March meeting of the ECB’s Governing Council saw the central bank maintain its key deposit rate at 4%. This outcome was in line with expectations.

World economy grew at a very modest pace in 2023. Subdued growth expected again in 2024, with continuing weak performance by Eurozone in particular. 

Inflation fell sharply last year and further moderation in price pressures anticipated in 2024.

Service sector growth and inflation strengthen in February

The latest AIB PMI® survey data indicated resurgent service sector growth in February, accompanied by rising price pressures. Total activity and new business both rose at the fastest rates since last September, driving the sharpest rate of job creation for eight months.

Cautious Approach by Central Banks

After around two years of aggressive interest rate hikes from the main central banks, monetary policy makers are currently on hold.