Published: 19/06/2026 By ECAP
POLITICAL UPHEAVAL
The British Pound traded mixed with cautious support after the Bank of England left interest rates unchanged, with resilient labour market data helping offset a softer inflation outlook. However, attention also turned to domestic politics following Andy Burnham’s emphatic Makerfield by-election victory. The result has fuelled speculation over potential leadership tensions within the government, raising the prospect of renewed political uncertainty that could influence sentiment toward the Pound in the near term.
The Euro drew support from improving risk sentiment after an interim peace agreement between the US and Iran raised expectations of more stable energy supplies and lower energy costs, a positive development for the Eurozone economy. However, gains remained limited as investors assessed the outlook for monetary policy and broader market conditions. With central bank expectations continuing to shape sentiment, the Euro’s direction remained closely tied to evolving economic and policy signals.
The US Dollar strengthened after the Federal Reserve delivered a more hawkish than expected policy message. Although interest rates were left unchanged, policymakers signalled a greater willingness to tighten policy further if inflation remains persistent, prompting markets to raise expectations of another rate increase. The shift in guidance boosted confidence in the currency, with limited US economic data leaving Federal Reserve policy expectations as the primary driver of sentiment.
Data supplied by GC Partners