Published: 11/11/2024 By ECAP
The British Pound rose after the Bank of England cut interest rates by 25-basis points last week, maintaining a cautious stance on future rate cuts. In fact, the Bank signaled that a follow-up rate cut in December was unlikely, opting for a gradual approach due to inflation risks from the recent budget. Market expectations now foresee UK rates staying higher for longer compared to the Eurozone, supporting the Pound’s outperformance in 2024.The Euro weakened against all peers following Donald Trump’s presidential win, as investors feared the Eurozone's vulnerability to his tariff policies, given its reliance on goods exports. In fact, Trump's trade policies led to concerns about economic exposure, making the Euro the weakest performer among major currencies. These factors contributed to ongoing pressure on the Euro, with further downside potential if Trump's policies materialize.
The U.S. Dollar remained steady as investors await this week’s key consumer inflation data and speeches from Federal Reserve officials. While the dollar’s rally had been slowed by the Fed’s recent interest rate cut, it still retained most of its gains, bolstered by Donald Trump’s presidential win. Ultimately, the dollar index rose slightly in Asian trade, with market focus shifting to upcoming inflation data and the Fed's policy outlook.
Data supplied by GC Partners