GBP: The British Pound weakened against the Euro yesterday after Trump proposed new tariffs on Canada and Mexico. While the Pound gained value relative to the Canadian Dollar and U.S. Dollar, it lost ground against the Euro due to concerns about the UK economy, driven by disappointing PMI data. With no significant UK economic data releases, the Pound remains susceptible to global market trends.

EUR: The Euro also faced challenges amid increasing worries about the Eurozone’s economic outlook. Markets have fully factored in a 25-basis-point rate cut by the European Central Bank in December, with a 58% probability of a larger 50-basis-point cut. Additionally, renewed tariff threats from U.S. President-elect Trump are further dampening sentiment, putting additional pressure on the Euro. Investors are now turning their attention to upcoming Eurozone inflation figures for further direction.

USD: The U.S. Dollar edged lower as concerns grew over Trump’s commitment to imposing tariffs on goods from China, Mexico, and Canada. The Dollar Index declined after earlier gains, with investor focus shifting to key U.S. economic data, such as the PCE price index and revised GDP figures. Market participants are watching closely for signs on the Federal Reserve’s rate trajectory, with scepticism mounting over the need for further cuts amid signs of economic resilience.