GBP: The British Pound strengthened after the Bank of England reduced interest rates by 25 basis points last week, while signalling caution on additional rate cuts. The Bank indicated that a December rate reduction is unlikely, preferring a measured approach due to inflation risks from the latest budget. Markets now anticipate that UK rates will remain elevated longer than in the Eurozone, bolstering the Pound’s relative strength for 2024.

EUR: The Euro declined across all major currencies following Donald Trump’s presidential victory, as investors worried about the Eurozone’s susceptibility to his trade policies, given its dependency on exports. Concerns over economic exposure to U.S. tariffs positioned the Euro as the weakest performer among major currencies, with pressure mounting as Trump’s policies could further impact the Euro if implemented.

USD: The U.S. Dollar held steady, with investors awaiting key consumer inflation data and Federal Reserve official remarks this week. Although the dollar’s upward momentum was slowed by the Fed’s recent rate cut, it retained much of its prior gains, supported by Trump’s election win. The dollar index edged higher in Asian markets, as attention turned to the forthcoming inflation data and the Fed’s policy trajectory.