Published: 22/11/2024 By ECAP
The British Pound recently strengthened, buoyed by higher inflation and easing expectations of Bank of England rate cuts. However, technical indicators suggest potential weakness in GBP/USD, with a drop to lower levels possible. Risks include uncertainties around the UK’s economic outlook and potential fiscal challenges. Despite these factors, the Pound remains supported by stronger growth and inflation.The Euro weakened further due to escalating tensions in Ukraine and ongoing economic challenges in Europe. In fact, the currency faces pressure from potential U.S. tariffs under a Trump-led administration, as well as a sluggish European economic outlook. Moreover, the balance of risks for growth and inflation in Europe is shifting negatively, further contributing to the Euro's decline. Ultimately, these factors, combined with geopolitical instability, are weighing heavily on the Euro's performance.
The U.S. Dollar rose slightly yesterday, consolidating near a one-year high. In fact, the Dollar Index gained 0.3%, supported by geopolitical tensions, fiscal policies, and a shift away from expectations of a December Federal Reserve rate cut. Moreover, the greenback's strength was also bolstered by Trump’s policies, including higher tariffs and spending. Looking forward, investors will be focused on jobless claims and upcoming Fed speeches, with the Dollar remaining in high demand amid global uncertainties.
Data supplied by GC Partners