Published: 23/02/2026 By ECAP
AT A GLANCE
The British Pound falls on weak jobs and inflation; brief rebound fades, with downside risks and political uncertainty persisting amid rate-cut expectations.
The Euro's traded sideways amid Ukraine uncertainty; stronger PMI data offered support, but inflation and political developments will drive near-term direction.
The U.S. Dollar rises on safe-haven demand, dips after tariff ruling; volatility persists amid Fed expectations, political uncertainty, and de-dollarisation debates.
POLITICAL RISK
The British Pound struck a new year to date low last week as soft employment data, cooling wage growth and easing inflation intensified expectations of a Bank of England rate cut. Although stronger retail sales, a solid services PMI and a sizeable January budget surplus sparked a late rebound, momentum remains fragile. Technical signals show risks skewed lower while below key resistance, with political uncertainty adding potential volatility in the near term.
The Euro traded without clear direction last week, struggling to secure sustained support amid lingering uncertainty over the Ukrainian peace process. Upbeat Eurozone PMI data signalled tentative improvements in private sector activity, helping to ease fears of a deeper slowdown and offering some underlying support. However, gains were limited and near-term performance may hinge on incoming inflation data and broader political and economic developments.
The US Dollar has recently led G10 gains on safe-haven demand amid Middle East tensions, underpinned by deep Treasury liquidity and funding markets. However, it fell after the Supreme Court struck down President Donald Trump’s tariff powers, despite plans for alternative measures. Firm data, possible Federal Reserve rate cuts, shifting hedging demand, political uncertainty and persistent de-dollarisation debates continue to shape its volatile near-term outlook.Data supplied by GC Partners