Published: 19/11/2025 By ECAP
SUSTAINED MOMENTUM
The British Pound remains under pressure as softer-than-expected UK inflation reinforces expectations for a December Bank of England rate cut. Although headline CPI eased to 3.6% and producer prices softened, stubborn services inflation limits the Bank’s flexibility. Adding to that, budget uncertainty under Chancellor Rachel Reeves also weighs on sentiment. While investors remain broadly bearish, analysts note GBP losses may stay shallow, with potential for recovery once fiscal clarity improves.
The Euro traded largely rangebound, lacking major Eurozone data to provide direction, leaving sentiment driven by broader market mood. Looking forward, finalised CPI figures are expected to confirm cooling inflation near 2.1%, generating limited impact unless revised. Ultimately, investor positioning remains bullish on the Euro, supported by fading French political risks. However, mixed global risk appetite and cautious trading have prevented strong, sustained momentum.
The U.S. Dollar holds firm as markets await the delayed nonfarm payrolls report and weigh Federal Reserve signals. In fact, mixed messaging from policymakers, some calling for a December rate cut, others resisting further easing, has fuelled uncertainty. For now, investors have sharply reduced USD shorts, while risk-off sentiment and resilient economic data offer support. Still, analysts expect downside risks to re-emerge once fresh U.S. data arrives, potentially re-anchoring expectations for a year-end Fed cut.
Data supplied by GC Partners