Pound Sterling (GBP)
The Pound is under pressure as UK fiscal risks and political uncertainty weigh on sentiment. Concerns are mounting over Chancellor Rachel Reeves’ reluctance to bow to demands for higher public spending. At the same time, fears of potential breaches of fiscal rules are dragging GBP/EUR lower.
Euro (EUR)
The Euro is holding firm ahead of key inflation figures from Germany, France, and Italy, which will feed into expectations for the wider Eurozone release. Projections point to headline inflation rising to 2.3% and core to 2.4%, likely reinforcing the European Central Bank’s cautious approach to interest rates. Should the data surprise to the upside, the Euro may gain further support against its peers.
U.S. Dollar (USD)
The Dollar has advanced to multi-week highs on the back of stronger-than-forecast economic data, including an upwardly revised 3.8% GDP growth rate and a decline in jobless claims. These results have prompted markets to pare back expectations for aggressive Federal Reserve rate cuts. Although the rally looks extended, focus now shifts to the forthcoming PCE inflation figures, which could guide the Fed’s next move and determine whether the Dollar’s strength endures.