Pound Sterling (GBP)
The Pound has held up well, helped by expectations that the Bank of England will be slower to cut interest rates than some of its peers. In the short term, this has given the Pound decent momentum, particularly against the Euro, though questions remain over whether the Bank will eventually shift towards easier policy later in the year.
Euro (EUR)
The Euro has shown resilience even as French politics has become a source of unease for investors. France faces a confidence vote in early September, and markets are weighing up whether the government will be forced into snap elections or whether it can find enough parliamentary support to push through some form of fiscal consolidation. As attention turns to the European Central Bank, the Euro has managed to hold steady and may find support if policymakers signal less urgency about cutting rates.
U.S. Dollar (USD)
The Dollar came under pressure following President Trump’s dismissal of Federal Reserve Governor Lisa Cook, which many view as another step towards politicising the central bank. However, the Dollar remains unchanged as Cook is challenging her removal in the courts, and because her absence does not change the Fed’s near-term decisions while Jerome Powell remains in charge. Investors expect monetary policy to stay guided by economic data, particularly after stronger-than-expected US figures this week.