Pound Sterling (GBP)

The British Pound bounced back against the Euro after a recent slump, mainly influenced by changes in the U.S. Dollar. This rebound came after UK inflation figures came in lower than expected and as uncertainty lingered over the direction of U.S. interest rates. Experts believe the Pound will stay relatively strong in the short term, with its value closely linked to movements in the Dollar and broader reactions to global events.

Euro (EUR)

Meanwhile, the Euro started the week on a weaker note due to disappointing economic sentiment data from Germany and a cautious approach from the European Central Bank. Worries about potential U.S. tariffs and their effect on the Eurozone economy also put pressure on the currency. Investors are now looking ahead to key PMI reports, which could further sway sentiment if they point to continued economic stress in the region.

U.S. Dollar (USD)

The U.S. Dollar took a sharp hit, falling close to a three-year low, as markets responded to President Trump’s push to reshape the Federal Reserve and calls for immediate rate cuts. This raised concerns over the Fed’s independence and added to the confusion caused by mixed messages on trade. As a result, the U.S. Dollar Index dropped 1.2% to 98.21, weakening against the Pound, Euro, and Swiss Franc, even as Fed Chair Jerome Powell held firm against cutting rates amid inflation worries.