Published: 16/01/2025 By ECAP
The British Pound weakened against both the Euro and Dollar following disappointing UK GDP growth data for November. In fact, the UK economy's low growth and high inflation have contributed to the bleak outlook for the Pound. On that note, the spectre of stagflation and ongoing economic uncertainty have led to market concerns. Ultimately, this has resulted in a selloff of UK debt and the Pound's decline.The Euro saw a slight increase against the Dollar, with the Euro to Dollar exchange rate rising by 0.3%. This came after the U.S. reported cooling core inflation, leading to a drop in the Dollar. However, despite the modest rise, the Euro's performance remains sensitive to broader economic uncertainties and inflation trends, with market attention focused on global economic data that may influence the Euro's value in the near term.
The U.S. Dollar fell after core inflation data showed a decrease to 3.2%, down from 3.3%. This cooling inflation, combined with high Dollar valuations, has led markets to speculate on a potential interest rate cut in June. In fact, market participants anticipate a less hawkish tone in future monetary policies. Nevertheless, the Dollar remains strong due to the robust U.S. economy, limiting its potential decline.
Data supplied by GC Partners