GBP: This morning, the British Pound is fluctuating without a clear direction due to the absence of new UK economic data. With limited data available, declining market sentiment is discouraging investor interest in the increasingly risk-sensitive currency. However, as markets factor in a more gradual approach to policy easing by the Bank of England, reduced expectations of interest rate cuts may help support Sterling during these low-activity trading conditions.

EUR: The Euro is under increasing pressure as growing political polarization in Europe, particularly in Germany, raises concerns about the currency’s stability. Analysts at Macquarie highlight that the rise of extremist parties in Germany reflects similar political turmoil observed in France during the June parliamentary elections. This political uncertainty poses not just a domestic challenge but also a broader risk to the entire eurozone.

USD: The U.S. Dollar reached a two-week high against the Euro yesterday as investors gear up for a week packed with significant data releases, including the U.S. payrolls report set for Friday. This jobs report is anticipated to heavily influence the Federal Reserve’s decision on September 18. The forthcoming data comes on the heels of comments from Fed Chair Jerome Powell last month, indicating the potential for interest rate cuts due to concerns over a weakening labor market.