Published: 17/12/2025 By ECAP
DATA MANOEUVERS
The British Pound has fallen this morning in light of the recent fall in inflation. British inflation data was significantly below expectations with it being 3.2% year on year. This, supported by recent labour market data, makes further interest rate cuts far more likely throughout 2026 resulting in the British Pound likely to fall further. However, much of this movement is already likely to be ‘priced in’ making any deviation or change in the current landscape likely to benefit the Pound. Overall, today’s inflation data has reaffirmed the markets belief in future interest rate cuts leading to a fall in the British Pound.
The Euro has no clear direction caused by falls elsewhere whilst at the same time having disappointing Eurozone data. The Eurozone PMI data indicated slowing private sector momentum with manufacturing activity contracting and services growth easing more than expected. The data undermined confidence in the region’s economic near-term outlook and as a result pressured the currency. However, due to poor data elsewhere this broadly did not lead to any effective impact on the Euro. Market focus now moves onto upcoming business indicators, although there is limited movement expect. Overall, the Euro remains dominated by performance elsewhere.
The USD softened as investors awaited and then digested a delayed jobs report that pointed to a cooling labour market. Modest hiring was offset by rising unemployment and downward revisions to earlier figures, reinforcing expectations of future Federal Reserve easing. Alongside this, the market looks to tomorrow’s inflation data for further indication of direction. Overall, Data distortions linked to recent disruptions limited conviction, leaving the USD fluctuating and struggling for direction amid cautious risk sentiment.
Data supplied by GC Partners