Published: 25/11/2024 By ECAP
The British Pound lost significant ground last week, falling to six-month lows against the Dollar, driven by concerns over proposed tariffs. However, it recovered after an unexpected inflation surge, which reduced expectations of a Bank of England rate cut. By week's end, weaker UK retail sales and a muted PMI reading pressured the Pound, though it managed a partial recovery against the U.S. Dollar.The Euro faced significant pressure on Friday following weaker-than-expected business confidence data across the Eurozone, including a sharp dip in the French PMI and a contraction in Germany's services sector. Moreover, Eurozone manufacturing also fell deeper into recession. The data prompted markets to price in a higher chance of the ECB cutting rates in December, further weighing on the Euro.
The U.S Dollar weakened in early European trade this morning, easing off recent highs as the greenback marked eight consecutive weeks of gains last Friday. In fact, the Dollar Index fell 0.5% to 106.950. Despite this retreat, the Dollar is likely to remain supported by ongoing inflationary pressures and the expectation of higher interest rates in the U.S. in the coming years.
Data supplied by GC Partners