Published: 18/06/2026 By ECAP
DEMOCRACY LOOMS
The British Pound is likely to be influenced by the closely watched Makerfield by-election, with investors assessing what the result could mean for Prime Minister Keir Starmer’s leadership and the broader political outlook. Political uncertainty may increase market volatility. Attention is also on the Bank of England’s upcoming policy decision after weaker than expected inflation data reduced expectations of near-term interest rate rises, adding further pressure on the Pound.
The Euro struggled to build momentum as investors favoured safer assets amid rising tensions in the Middle East. Concerns over regional instability supported demand for the US Dollar, limiting the Euro’s appeal. With little major economic data from the Eurozone, market sentiment and geopolitical developments remained the main drivers. In the near term, the single currency is likely to be influenced by broader risk appetite and external events.
The US Dollar strengthened after the Federal Reserve signalled that interest rates could stay higher for longer, reinforcing expectations of a restrictive policy stance. The currency was further supported by rising Treasury yields and demand for safe-haven assets amid ongoing tensions in the Middle East. Investors will continue to focus on the Fed’s outlook and geopolitical developments, both of which could help keep the Dollar supported in the near term.
Data supplied by GC Partners