Published: 06/02/2026 By ECAP
FRIDAY FINISH
The British Pound fell sharply after the Bank of England left policy unchanged but signalled that a cut is likely in the coming months. A very close vote highlighted growing support for lower rates, which weighed on sterling. Political uncertainty has added to the pressure, undermining confidence further. With weaker growth forecasts and rising unemployment expectations, the Pound ends the week on the back foot.
The Euro is steadier after the European Central Bank left policy unchanged, signalling confidence that inflation will stabilise over time. While recent data showed a sharp drop in German industrial output, markets were largely unfazed. The ECB played down short-term inflation weakness, helping the Euro avoid significant losses as investors look beyond near-term data toward the medium-term outlook.
The US Dollar strengthened into the end of the week as markets turned more cautious. Sterling weakness and renewed volatility in equities helped support the greenback, which reached its strongest levels in around two weeks. While broader concerns around US policy remain, the Dollar benefited from a risk-off tone and relative stability compared to developments elsewhere in the market.
Data supplied by GC Partners