Published: 29/12/2025 By ECAP
AT A GLANCE
The British Pound rises on positive sentiment, short covering and confidence, but growth fragility, policy risks, and external factors limit gains.
The Euro stays supported by strong risk appetite, buoyant markets, steady monetary policy expectations, and resilience, maintaining investor confidence and stability.
The U.S. Dollar weakened in thin holiday trading, with limited demand despite supportive economic signals and steady Federal Reserve policy expectations.
QUIET HOLIDAYS
The British Pound is consolidating near recent highs, it is supported by a growing positive risk sentiment, limited market catalysts and short covering of previously bearish positions by some traders. Confidence in the Pound has improved following the budget alongside improved business surveys. However, regardless of this, fundamental vulnerabilities remain including a fragile growth outlook, policy/governmental uncertainties and external movements which could limit gains unless the British economy delivers a stronger than expected recovery.
The Euro has continued to be supported by strong year end risk appetites and buoyant equity markets which has reinforced existing investor confidence. With few immediate data releases, sentiment remains supportive for the Euro. Focus on the longer term, shifts to market expectations that monetary policy will remain steady throughout the coming year, alongside having anticipated yields as supportive. Overall, as long as if conditions continue to point to resilience, then the Euro should continue to maintain its stability.s.
The US dollar softened in subdued, holiday-thinned trading. Even with generally supportive economic signals, the currency saw limited demand as markets showed little change in expectations for Federal Reserve policy next year. With attention shifting away from near-term data, the dollar remained near recent lows amid light liquidity and steady risk sentiment.
Data supplied by GC Partners