Published: 24/09/2025 By ECAP
KEY DATA
The British Pound is weakening as the UK economy slows and fiscal concerns mount. In fact, the OECD forecasts just 1% GDP growth in 2026, signalling ongoing currency underperformance. Moreover, rising taxes and policy uncertainty are deterring investment, while high inflation erodes real gains. Ultimately, without pro-growth reforms in the November budget, the Pound is likely to remain under pressure.
The Euro’s outlook is strengthening, supported by a 16-month high in the Eurozone Composite PMI, driven by robust services growth and a stabilizing manufacturing sector. Germany leads the rebound, while France lags due to political uncertainty. Moreover, employment remained stable across the bloc, and inflation trends firmed. Ultimately, these developments reduce pressure on the ECB to cut rates further, keeping the euro broadly supported.
The U.S. Dollar held steady as markets absorbed cautious remarks from Fed Chair Jerome Powell, who emphasized the delicate balance between inflation control and labour market health. While Powell avoided signalling exact timing for future rate cuts, markets still expect two reductions this year. Ultimately, mixed U.S. data and subdued risk appetite are keeping the Dollar rangebound, as investors await key inflation and housing figures for further direction.
Data supplied by GC Partners