Pound Sterling (GBP)

The British Pound climbed to its highest level against the Euro since April 2022, buoyed by expectations that the Bank of England will take a more cautious approach to cutting interest rates compared to the European Central Bank. Market forecasts suggest that the interest rate gap between the UK and the Eurozone will widen further over the next year. This rally in Sterling reflects the UK’s robust economic growth and persistent inflationary pressures.

Euro (EUR)

The Euro weakened against a range of currencies ahead of tomorrow’s ECB policy announcement. The European Central Bank is anticipated to implement its fourth rate cut of the year, reducing rates by 25 basis points. Analysts expect a dovish tone, with discussions of additional rate cuts likely to weigh on the Euro’s performance.

U.S. Dollar (USD)

The U.S. Dollar inched higher ahead of the November consumer inflation report, a key indicator for the Federal Reserve’s interest rate strategy. The Dollar Index saw a slight uptick as markets focused on the anticipated inflation data, which is expected to reveal a modest rise. With the Fed recently cutting rates, any indication of stagnating inflation progress could lead to a re-evaluation of future rate-cutting plans.