Published: 22/08/2025 By ECAP
MARKET CONTRADICTIONS
The British Pound remains under pressure amid conflicting UK economic signals. Strong services PMI and improved government borrowing offered brief support, but falling employment, weak manufacturing and declining consumer confidence point to underlying fragility. Analysts are split on the outlook, with some expecting further declines driven by future interest rate cuts. Overall, labour trends, inflation and fiscal policy uncertainty weigh on Sterling’s performance.
Eurozone economic activity improved as the manufacturing PMI hit a 41-month high, while services remained stable despite rising price pressures. Businesses appear resilient amid challenges like U.S. tariffs. However, increasing costs in the services sector may concern the European Central Bank. Overall, eurozone growth shows signs of recovery, supporting the Euro amid mixed inflation signals and steady service-sector pricing.
The U.S. Dollar remains under pressure as markets await Fed Chair Jerome Powell’s Jackson Hole speech for signals on monetary policy direction. Any dovish tone or response to a weakening labour market could weaken the dollar. Political interference in the Fed and potential rate cuts further risk undermining USD credibility. Overall, although recent U.S. economic data offered short-term support, long-term risks to dollar strength persist.
Data supplied by GC Partners