Published: 22/01/2026 By ECAP
TARIFF RELIEF
The British Pound has recovered after a de-escalation in trade tensions as the US dropped planned tariff threats linked to Greenland. UK public borrowing also came in lower than expected, offering some support after recent fiscal concerns. However, gains remain measured, with investors still cautious about the broader UK growth outlook. With little further UK data due today, the Pound is likely to take its lead from global sentiment rather than domestic developments.
The Euro has eased after an initial rally, as improved risk appetite boosted US assets and reduced demand for alternatives. While the removal of tariff threats has calmed nerves, uncertainty remains around transatlantic relations and policy direction. Attention now turns to upcoming data and central bank commentary, but in the near term the Euro may struggle to regain momentum as markets refocus on global risk trends.
The US Dollar has been mixed following a sharp reaction to shifting US rhetoric. While the removal of tariff threats improved sentiment and supported equities, renewed criticism of the Federal Reserve by President Trump has weighed on confidence in the currency. Markets remain sensitive to any sign of political pressure on monetary policy. Focus now shifts to upcoming US data, including growth and inflation indicators, for clearer direction.
Data supplied by GC Partners