Published: 06/12/2024 By ECAP
The British Pound retreated against the Euro but maintained its gains against the U.S. Dollar during yesterday’s trading session. In fact, the Pound's movement was primarily influenced by broader European political developments rather than any immediate factors related to the UK. Nevertheless, concerns over persistent inflation, especially wage growth, will continue to support the Pound.The Euro strengthened as markets anticipated a resolution to France’s political crisis. In fact, following the resignation of Prime Minister Barnier's government, President Macron’s commitment to completing his term and Marine Le Pen’s backing of a slower deficit reduction plan boosted confidence. The Euro also defended key support levels against a basket of currencies, suggesting that the worst of the French crisis had passed, and fiscal stability was improving.
The U.S. Dollar slipped slightly ahead of key labor market data, with the Dollar Index falling 0.1%. Recent data showed slower private payroll growth and a slowdown in the services sector. However, Federal Reserve Chair Jerome Powell signaled a slower pace of rate cuts due to a stronger-than-expected US economy. Nevertheless, market participants anticipate a rate cut in December, but upcoming job data will influence future expectations.
Data supplied by GC Partners