Published: 24/10/2025 By ECAP
WEIGHED DOWN
The British Pound has struggled recently, weighed down by expectations of a potential rate cut by the Bank of England due to softer-than-expected inflation figures. In fact, the UK's September CPI held steady at 3.8%, and core inflation dropped to 3.5%, prompting concerns about the economy. As a result, investors are anticipating a BoE rate cut by December, which kept the Pound subdued. Moreover, today’s retail sales data, expected to show a slight decline, could add further pressure on the Pound.
The Euro has shown limited movement amid a cautious market tone, with investors awaiting key data from the Eurozone. Consumer confidence in the region improved slightly in October, but the Euro remains under pressure due to ongoing concerns about slowing economic growth in Germany and France. In fact, eurozone business activity, particularly in manufacturing, is still struggling. Ultimately, the Euro faces a tough time pushing higher, especially with expectations for a weaker Eurozone PMI.
The U.S. Dollar has been consolidating its recent gains, driven by safe-haven demand as tensions rise between the US and China. Reports of potential export restrictions to China spooked investors, prompting a flight to the Dollar. This risk-off sentiment kept the USD buoyant, particularly against the Pound and Euro. Looking forward, markets now await the release of U.S. inflation data, with a higher-than-expected CPI potentially supporting the case for a more cautious approach from the Federal Reserve.
Data supplied by GC Partners