Published: 16/02/2026 By ECAP
AT A GLANCE
The British Pound starts the week on the back foot as UK political tensions resurface and markets continue to price in further Bank of England rate cuts.
The Euro's is steady, taking advantage of softer Dollar sentiment and limited fresh Eurozone news.
The U.S. Dollar is mixed at the start of the week, with trading quieter due to the Presidents’ Day holiday in the United States.
QUIET START
The British Pound remains sensitive to UK politics after renewed pressure on Prime Minister Starmer. Although he has survived the immediate challenge, the episode has reminded markets that leadership risk has not disappeared. That uncertainty comes just days after the Bank of England signalled rates are likely to fall again in the coming months. Labour market data is due tomorrow, followed by inflation on Wednesday. Both releases could shape expectations for a March rate cut and drive short-term moves in the Pound.
The Euro is holding steady as attention shifts away from immediate political tension in Europe and towards this week’s inflation data. Markets expect Eurozone inflation to fall back towards 3%, which would support the view that price pressures are easing. The European Central Bank has indicated it is comfortable with the current policy stance for now. With little data today, the Euro is likely to follow global sentiment and US developments rather than domestic driver.
The US Dollar is starting the week quietly, with US markets closed for Presidents’ Day. Thinner liquidity can keep movements contained early on. Focus turns to a busy run of US data later in the week, including employment and inflation figures. January’s CPI showed cooling price pressures, but jobs data remains firm. These releases will be key in shaping expectations for Federal Reserve policy and could set the tone for the Dollar in the days ahead.
Data supplied by GC Partners