Published: 22/09/2025 By ECAP
AT A GLANCE
The British Pound weakened as the Bank of England held rates steady but hinted at future cuts.
The Euro consolidated in a narrow range amid mixed economic signals and cautious investor sentiment.
The U.S. Dollar rebounded as markets reassessed Fed rate cut expectations amid solid jobs data.
STRUCTURAL CONCERNS
The British Pound lost some ground following the Bank of England’s decision to keep interest rates unchanged last Thursday, while signalling the possibility of further cuts. Sterling was also weighed down by rising government borrowing and concerns surrounding the upcoming autumn budget. In fact, market sentiment turned cautious, with investors expecting looser monetary policy ahead. Ultimately, weak economic data and fiscal uncertainty continue to challenge the outlook for the currency.
The Euro has been consolidating in a tight range, reflecting investor caution amid mixed signals on European growth and inflation. While long-term structural concerns persist, including political uncertainty and uneven productivity, the currency has shown resilience. Support comes from expectations of improved regional growth, potential capital inflows, and a shift away from U.S. assets. Ultimately, a breakout from the current range could set the tone for euro direction into year-end.
The U.S. Dollar rebounded after falling to its lowest level since early 2022, following the Federal Reserve’s first rate cut of the year. In fact, markets expect more easing, but Fed projections suggest fewer cuts, creating scope for a short-term dollar bounce. Moreover, positive jobs data added support. However, a weakening labour market and political uncertainty may weigh on the Dollar’s strength going into 2026.
Data supplied by GC Partners