The pound is heading for a monthly decline on euro and dollar

Amidst investors' attention shifting towards the British budget for next week, the pound saw a little monthly decrease vs the euro and the dollar on Thursday. The day coincides with an abundance of inflation data globally.

Against the dollar, sterling is heading for a monthly decline of 0.26%. Whereas against the euro, the pound softened earlier on the daily and the monthly.

The Fed's preferred inflation indicator, the U.S. PCE, was released earlier today. It showed that although U.S. prices increased in January, the annual increase in inflation was the lowest in almost three years, maintaining the possibility of a Federal Reserve interest rate cut in June.

The move was expected and had minimal effect on currency movements.

Although markets were apprehensive about altering ECB pricing too much ahead of the U.S. data, data released on Thursday showed that inflation in the eurozone decreased further this month, supporting the argument for rate cuts by the European Central Bank.

According to Lee Hardman, senior FX strategist at MUFG, there is a possibility of delivering the budget for next week to currency markets in this manner.

Tax cuts are anticipated from British Finance Minister Jeremy Hunt, although he is constrained by pledges to address the country's roughly 2.5 trillion pounds ($3.2 trillion) in debt.

(Sources: investing.com, reuters.com)