Published: 26/01/2026 By ECAP
AT A GLANCE
The British Pound strengthened as surveys and retail sales boosted confidence, supporting momentum and market focus.
The Euro's volatility eased on sentiment and German data, but politics and weak surveys dampened momentum.
The U.S. Dollar dropped as tariff threats and Greenland remarks fuelled geopolitical, trade uncertainty, prompting sell-offs and focus on Fed policy expectations.
VOLATILITY PERMEATES
The British Pound starts the week positively, building on strong performance throughout recent weeks. There is improved market confidence following encouraging British business surveys and better than expected retail sales, both of which have lifted optimism about British growth. These data releases helped to reverse any market weakness and reinforced the belief that momentum in the British economy is improving, leaving the British Pound supported with many in the market now looking elsewhere for the Pound’s direction.
The Euro experienced a volatile period, wherein it found support from improved investor sentiment and positive German economic indicators. However, this improved sentiment was quickly challenged as political uncertainty and softer business surveys weighed on market confidence resulting in the weakening momentum of the Euro. The Euro’s near-term direction now depends on upcoming economic sentiment and growth data from the region, whilst there remains possibility of geopolitical movement.
The US dollar fell last week amid selling pressure driven by the President’s tariff threats and Greenland rhetoric which has revived geopolitical and trade uncertainty. Fears of retaliation from impacted parties and broader reduced demand for US assets, helped to fuel a mood of sell America. Although, the President did later soften his stance, this bearish momentum persisted with many in the market now looking to the Federal Reserve leadership expectations ahead of upcoming policy decisions and the corresponding uncertainty.
Data supplied by GC Partners