Published: 12/05/2026 By ECAP
POLITICAL CHAOS
The British Pound weakened at the start of the week as renewed political uncertainty in the UK unsettled investors. Labour’s poor local election results and reports of pressure on Keir Starmer to step down raised concerns about future economic policy and government stability. The Pound also faced pressure after comments from a Bank of England policymaker suggested interest rates may not rise again soon, reducing confidence in the currency.
The Euro was subdued at the start of the week, struggling to gain momentum amid limited news from the Eurozone. Investor attention is turning to Germany’s economic sentiment survey, with expectations that confidence may weaken in May. Concerns about optimism in the region’s largest economy could weigh on the Euro if the figures disappoint. Broader geopolitical tensions also kept cautious, limiting support for the currency
The US Dollar strengthened at the start of the week as investors sought safer assets amid rising tensions in the Middle East. Concerns grew after Donald Trump rejected Iran’s latest peace proposal and Tehran warned of possible regional clashes. The currency also gained support from expectations that upcoming US inflation data could keep interest rates higher for longer, reinforcing confidence in the Dollar despite uncertainty.
Data supplied by GC Partners