Published: 16/01/2026 By ECAP
VARIED MARKETS
The British Pound's recovery has stalled following GDP data being released yesterday which has helped to create a ‘technical ceiling’. The near-term direction depends on data releases next week, UK labour and inflation data, which are integral to shaping rate cut expectations. The Pound was briefly lifted by the better than expected GDP growth however gains quickly faded amid doubts about the reliance on one-off factors. Market sentiment remains cautious ahead of a busy domestic data release calendar.
The Euro remains fragile as demand softens amid weak underlying fundamentals. Germany’s modest return to growth was offset by significant downward revisions to previous output and signs of slowing inflation, raising concerns about domestic demand and resilience. Political tensions and broader uncertainty continue to weigh on confidence, leaving the euro vulnerable to subdued performance and potential downside pressure in the near term.
The U.S. Dollar showed strength after robust US data eased fears of an economic slowdown and reduced expectations for near-term Federal Reserve rate cuts. However, its outlook remains sensitive to energy prices, with falling oil seen as a potential drag by loosening financial conditions and giving the Fed more room to ease. Upcoming US industrial production data and Fed commentary will be key drivers.
Data supplied by GC Partners