Published: 10/06/2025 By ECAP
Clear Outcome
The British Pound weakened slightly against the Euro and Dollar after UK wage growth came in below expectations, suggesting easing inflation pressures. Moreover, softer pay data and rising unemployment increase the likelihood of two interest rate cuts by the Bank of England this year. Markets responded by selling Sterling, though broader global factors may limit further declines despite the cooling UK labour market and wage trends.
The Euro rose against its peers, supported by a hawkish tone from the European Central Bank. In fact, although the ECB cut rates by 25-basis points last week, President Lagarde signalled the easing cycle may be nearing its end. On that note, markets now expect just one more rate cut in December. Ultimately, optimism about eurozone growth and potential German fiscal stimulus are helping keep the Euro strong amid global uncertainty.
The U.S. Dollar retreated during yesterday’s trading session, slipping 0.3% as optimism over US-China trade talks in London outweighed support from Friday’s strong jobs report. In fact, investors remained cautious, awaiting clear outcomes from the negotiations and upcoming U.S. inflation data. While the Dollar had gained earlier in Asia trading, broader concerns over trade policy and economic uncertainty continued to pressure sentiment.
Data supplied by GC Partners