Published: 28/01/2025 By ECAP

The British Pound has experienced a shift in sentiment, as recent poor economic data and concerns over rising government debt have weighed on its performance. However, this shift may position the Pound for potential recovery. Analysts believe that positive surprises, such as stronger economic data or hawkish central bank actions, could support the Pound moving forward.

The Euro gained slightly as German business morale improved, signalling gradual recovery in the eurozone economy. Despite this, the European Central Bank is expected to continue cutting interest rates. Investors are awaiting insights from ECB President Lagarde in upcoming meetings, with the Euro likely to stay within a narrow range.

The U.S. Dollar strengthened as concerns over trade wars and global growth boosted its safe-haven appeal. In fact, the Dollar Index climbed 0.6%, with investors focusing on the Federal Reserve’s upcoming policy meeting. While the Fed is expected to hold rates steady, its commentary on inflation and future rate decisions will be key for currency markets in the coming days.
Data supplied by GC Partners