Published: 04/02/2026 By ECAP
RISK RELIEF
The British Pound is firmer against the Euro, with GBP/EUR breaking higher to its best levels since late summer. The move has been driven less by UK specific news and more by an improvement in global risk sentiment, as equity markets rebound and confidence returns after recent volatility. Against the Dollar, the Pound is trading sideways in quiet conditions. Attention now turns to Thursday’s Bank of England decision, where policy is expected to remain unchanged.
The Euro is underperforming against the Pound as improving global sentiment favours risk-linked currencies. Focus today is on Eurozone inflation data, with headline CPI expected to fall further below the ECB’s target. While policymakers see this as temporary, a softer reading could reinforce expectations that rates stay on hold this week, with the potential for cuts later in the year if disinflation persists.
The US Dollar is steady after recent gains linked to optimism around US growth data and reduced fears of aggressive policy easing. However, upside remains capped by longer-term concerns around trade policy and fiscal risks. Markets are watching US data later today, including private-sector employment and services activity, though attention is already shifting toward how policymakers respond to the broader economic picture in the weeks ahead.
Data supplied by GC Partners