Pound Sterling (GBP)
The British Pound has come under strain as domestic economic worries move to the forefront. Investors are growing increasingly uneasy about the UK’s worsening public finances ahead of November’s budget, sparking talk of possible tax hikes and spending cuts. Recent data showing slower wage growth and higher unemployment has strengthened expectations that the Bank of England will soon cut interest rates. Together, these factors have dragged down the Pound’s value.
Euro (EUR)
The Euro also slipped early last week, pressured by political uncertainty in France and disappointing industrial figures from Germany. Markets were shaken by the unexpected resignation of French Prime Minister Sébastien Lecornu, though his quick reappointment helped ease concerns and restore some calm. Even so, the Euro continues to face headwinds from deeper structural problems, including ongoing weakness in Germany’s economy and fading optimism around earlier fiscal stimulus measures.
U.S. Dollar (USD)
Meanwhile, the U.S. Dollar held steady last week, supported by demand for safe-haven assets amid rising geopolitical tensions and renewed U.S.-China trade worries. Although Trump’s tariff threats initially sparked a selloff, efforts over the weekend to defuse tensions helped the Dollar recover. It also benefited from softness in other major currencies like the Euro. With fresh inflation data and trade talks on the horizon, sentiment toward the Dollar remains cautiously positive heading into the new week.