Published: 10/09/2025 By ECAP
DOVISH TONE
The British Pound is rising as markets scale back expectations for near-term interest rate cuts from the Bank of England. Analysts now anticipate rates may remain unchanged into next year, which supports Sterling. Despite ongoing fiscal concerns and political uncertainty ahead of the autumn budget, the Pound is benefiting from its interest rate outlook. However, risks remain, and future volatility could still challenge its recent gains.
The Euro faces potential weakness ahead of the European Central Bank’s September decision, as expectations grow for a dovish tone and possible future rate cuts. While rates are expected to remain unchanged for now, slowing growth and disinflationary pressures could push the ECB to act again. Ultimately, market sentiment may shift if confidence fades in the idea that the rate-cutting cycle is truly over.
The U.S. Dollar held firm despite downward revisions to job growth, which revealed the economy added significantly fewer jobs than previously reported. However, the data did little to shift expectations for Federal Reserve policy. Investors now focus on upcoming inflation figures, with forecasts pointing to persistently high CPI. If confirmed, this may limit the Fed’s ability to cut rates aggressively, keeping the Dollar supported in the short term.
Data supplied by GC Partners