Published: 25/11/2025 By ECAP
BUDGET JITTERS
Sterling continues to drift lower as traders grow cautious ahead of the Budget announcement. Concerns are rising that new tax measures aimed at improving public finances could slow the UK economy further, adding pressure to the Pound. Recent data showing softer economic activity and easing inflation have also encouraged expectations that the Bank of England may cut interest rates in December. With investors already nervous about the UK’s growth outlook, the Pound remains vulnerable unless the Budget delivers a clear and confident fiscal plan that reassures markets.
The Euro is starting the week on a firmer footing, helped by renewed optimism over progress in discussions aimed at ending the war in Ukraine. Meetings held in Geneva have been described as constructive, lifting sentiment across European markets. Lower energy costs across Europe are also providing support, easing pressure on households and businesses. While the situation remains fluid, the improvement in tone has helped the Euro strengthen against both the Pound and the Dollar.
The Dollar is steady as markets reassess the chances of a Federal Reserve rate cut next month. Comments from Federal Reserve officials have softened expectations for further rate hikes, with some signalling that another cut in December is possible if economic data continues to cool. Even so, the Dollar remains supported by a generally cautious tone in global markets, as investors wait for more clarity from upcoming economic releases.
Data supplied by GC Partners