Published: 18/11/2025 By ECAP
SIGNIFICANT PRESSURE
The British Pound continues to face significant pressure as markets grapple with the UK’s weak growth outlook, stubborn inflation trends, and ongoing fiscal uncertainty. Investors remain cautious ahead of the autumn budget, with shifting expectations around tax policy and fiscal tightening adding to volatility. Ultimately, concerns about higher employment costs, tepid business activity, and the likelihood of another Bank of England rate cut next month further limit sterling’s near-term support.
The Euro is struggling to gather momentum despite an upgraded Eurozone growth forecast from the European Commission. While stronger export activity has boosted the outlook for 2025, the single currency’s gains remain restricted by its tight inverse correlation with a strengthening U.S. Dollar. Looking forward, with limited Eurozone data due this week, wider market sentiment is driving EUR movement, leaving the currency sensitive to global risk flow.
The U.S. Dollar remains underpinned by reduced expectations for a December Federal Reserve rate cut and evidence of resilient U.S. economic performance. Sticky inflation, robust growth estimates, and hawkish Fed commentary have encouraged investors to anticipate a prolonged period of tighter policy. Moreover, global risk-off sentiment continues to lift demand for the greenback, though upcoming U.S. labour indicators could introduce short-term fluctuations in USD strength.
Data supplied by GC Partners