Pound Sterling (GBP)
GBP: The British Pound strengthened as robust wage growth and an unchanged jobless rate highlighted resilience in the UK labour market. Although job losses were recorded, signs of stability helped underpin confidence in Sterling. The currency was further supported by a risk-on market tone that favoured growth-oriented assets. Attention now shifts to upcoming UK inflation and retail sales figures, which could steer the Pound’s direction later this week.
Euro (EUR)
EUR: The Euro lost ground as political uncertainty in France weighed on sentiment, while the broader risk-friendly mood reduced demand for safer assets. Confidence in the single currency was also dented by expectations of a sharp drop in Germany’s ZEW economic sentiment index. With limited domestic drivers, the Euro underperformed its peers and remains exposed to regional instability and weaker investor confidence.
U.S. Dollar (USD)
USD: The U.S. Dollar softened as markets prepared for the Federal Reserve to restart its rate-cutting cycle, beginning with a likely 25 basis point reduction this week. Dovish expectations have been reinforced by cooling labour market indicators and subdued consumer sentiment. That said, the Dollar’s downside could be constrained, as investors have already priced in much of the Fed’s planned easing.