Published: 29/01/2026 By ECAP
CALMER MARKETS
The British Pound strengthened earlier in the week following a recovery from recent lows stemming from global policy caution and broader shifting sentiment favouring the Pound. Momentum, later slowed, leaving the British Pound trading rangebound amid limited domestic data and a perception of a softer Bank of England rate outlook. Specifically looking at the US Dollar, there was some pull back whilst performance to other currencies remained comparatively steady.
The Euro lost momentum midweek, being limited by policymakers voicing concerns about rapid currency appreciation and the corresponding disinflationary impact. Market caution, as a result, grew ahead of the ECB’s next rate decision, alongside that geopolitical and defence related concerns continue to weigh on sentiment. The Euro struggled to advance but remains broadly stable.
Following dramatic falls, the US Dollar has edged higher midweek after recent weakness caused by political uncertainty, trade policy and executive rhetoric favouring a softer Euro currency. Market perception has improved slightly as investors are on manoeuvres ahead of the Federal Reserve’s policy decision. However, despite the marginal recovery, the US Dollar continues to remain volatile, with movements reflecting shifting risk appetites, policy expectations and ongoing sensitivity to domestic political developments.
Data supplied by GC Partners