Published: 02/07/2026 By ECAP
HIGHEST LEVEL
The British Pound strengthened to its highest level in a year, supported by growing confidence among investors. The Pound benefited as attention shifted towards the outlook for UK interest rates, with expectations that borrowing costs could still rise in the coming months. Higher UK interest rates continue to support the currency, although upcoming comments from a Bank of England policymaker could influence sentiment and determine whether the Pound maintains its recent momentum.
The Euro weakened after lower than expected inflation reduced expectations of further interest rate rises. Softer price growth prompted investors to question whether policymakers will need to tighten monetary policy again, weighing on confidence in the single currency. Attention now turns to economic data and comments from central bank officials, with any cautious signals likely to keep pressure on the Euro in the near term.
The US Dollar found support after the Federal Reserve signalled it remains focused on bringing inflation under control, reinforcing expectations that interest rates could rise again. Confidence in the currency was also boosted by reassurance over the central bank’s independence. Attention now turns to the latest US jobs report, with another strong labour market update likely to strengthen the Dollar further.
Data supplied by GC Partners