Published: 12/02/2025 By ECAP
The British Pound seems to be holding its ground despite last week’s cautious signals from the Bank of England. In fact, BoE member Catherine Mann's recent comments on inflation and labour market conditions helped clarify the central bank's stance. However, uncertainty persists around potential policy changes, and markets are closely watching developments in U.S. trade tariffs for further impacts on the Pound.
The Euro has shown resilience in response to fears over U.S. import tariffs. In fact, while the Eurozone's significant trade surplus with the U.S. made the Euro sensitive to tariff threats, market reactions suggest a diminishing impact as investors anticipate less severe outcomes. Ultimately, analysts believe ongoing efforts by the EU could mitigate the worst effects of tariff risks on the Eurozone economy.
The U.S. Dollar steadied ahead of key inflation data, after a tariff-driven rally earlier in the week. Despite Federal Reserve Chair Jerome Powell downplaying rate cuts, the Dollar was supported by Trump's 25% tariffs on aluminium and steel. Looking forward, investors are focused on upcoming U.S. inflation data, with expectations of steady readings and potential pressure on the Dollar due to persistent inflation concerns.
Data supplied by GC Partners