Published: 18/11/2024 By ECAP
The British Pound weakened on Friday due to disappointing UK GDP growth, which missed expectations and suggested a potential economic stagnation. Looking forward, UK inflation and PMI data, due later during the week, will be crucial; weak figures could prompt faster rate cuts, while stronger data might support the Pound. Ultimately, the outlook remains uncertain, with the Pound facing resistance near recent highs against the Euro.The Euro faced pressure from concerns over the Eurozone’s economic outlook, including political issues in Germany and the potential impact of U.S. tariffs. Despite some recent weakness, the Euro's broader challenges are partly due to slower growth expectations and uncertainty surrounding future interest rate decisions in the Eurozone. Economic data, including inflation and PMI figures, will be crucial in determining whether the Euro can stabilize or face further declines.
The U.S. Dollar weakened slightly towards the end of last week after Fed Chair Jerome Powell reduced expectations for a rate cut, signaling that the economy doesn’t require immediate easing. The probability of a 25-basis point cut in December dropped from 85% to 63%. Ultimately, Powell's caution, coupled with persistent inflation concerns, suggests any future cuts may be slow. Despite this, the Dollar briefly spiked before pulling back, reflecting market adjustments.
Data supplied by GC Partners