Published: 29/11/2024 By ECAP
The British Pound has risen against the Euro and Dollar, benefiting from a low volatility environment. The Pound’s strength is bolstered by the UK's high interest rates, with the Bank of England expected to maintain rates while other central banks, like the ECB and Fed, may cut. In the longer term, JP Morgan forecasts the Pound will outperform the Euro but underperform the Dollar in 2025.The Euro experienced slight losses yesterday, despite an unexpected improvement in Eurozone consumer sentiment for November. A smaller-than-expected rise in German inflation appeared to weigh on the EUR, though movement was subdued ahead of this morning's Eurozone inflation data. The focus today shifts to the Eurozone's November consumer price index, with inflation anticipated to increase, potentially boosting the Euro.
The U.S. Dollar regained about of ground, but the move may not fully reflect the risk of renewed trade tensions. Analysis indicates that most of the Dollar's appreciation is driven by economic data and interest rate differentials, with trade risks contributing minimally. If the U.S. enacts permanent tariffs, the Dollar could see significant appreciation, while a negotiating tactic would lead to a more moderate and short-lived rise.
Data supplied by GC Partners