GBP: The British Pound strengthened after October’s inflation data revealed a sharper-than-expected increase, with the Consumer Price Index (CPI) climbing to 2.3% from 1.7%. This bolstered market expectations that the Bank of England would maintain elevated interest rates for an extended period, leading to Sterling gains. However, the combination of persistent inflation and stagnant economic growth raises concerns about potential stagflation, which could potentially weigh on the Pound in 2025.

EUR: In contrast to the Pound, Germany’s Producer Price Index fell by 1.1% year-on-year, signalling ongoing deflation. With the European Central Bank grappling with stubborn inflation and reduced growth projections, markets are pricing in a 25-basis-point rate cut next month, intensifying pressure on the Euro.

USD: The U.S. Dollar stabilised after three days of declines, following a pullback from recent one-year highs achieved after Donald Trump’s election. Investor sentiment remains mixed regarding the trajectory of U.S. interest rates, with a 61% probability of a rate cut in December. The dollar’s long-term outlook is uncertain, particularly as Trump’s proposed expansionary policies could amplify inflationary pressures.