Pound Sterling (GBP)

The British Pound strengthened against the Euro and the Dollar following stronger-than-expected UK inflation data. In January, inflation rose to 3%, up from 2.5% in December, primarily due to increased transport, food, and education costs. This surge may restrict further interest rate cuts by the Bank of England. Consequently, expectations for aggressive rate reductions have diminished, supporting the Pound’s recent recovery.

 Euro (EUR)

The Euro remains under pressure as inflationary forces persist, limiting the potential for substantial interest rate cuts by central banks. With services inflation rising and underlying inflation trends remaining strong, concerns over price pressures continue to grow. This environment is expected to weigh on the Euro’s performance, as shifting market expectations and ongoing economic uncertainty present potential challenges for the currency in the near term.

U.S. Dollar (USD)

The U.S. Dollar has weakened recently, partly due to softer economic data, leading to its lowest level in two months. However, analysts anticipate the Dollar could stabilise later in the year, supported by rising U.S. tariffs and economic outperformance, which may help contain its current weakness.