Limited Movement
GBP: The British Pound struggled to gain ground against major currencies, including the Euro. In fact, the Pound to Euro exchange rate dipped to five-week lows, with limited movement due to a lack of significant economic data. Despite hawkish comments from the Bank of England, Sterling remained largely unchanged, with little direction expected until upcoming economic releases.
EUR: The Euro strengthened following the ECB’s 25-basis point rate cut and hawkish comments from ECB President Lagarde, signalling limited scope for future cuts. Despite the rate reduction, Lagarde’s stance on being “data-driven” in future decisions boosted the Euro. Ultimately, although geopolitical tensions and downside risks to growth remain, infrastructure spending may support growth and inflation, enhancing the Euro’s outlook.
USD: The U.S. Dollar remained near a four-month low, pressured by fears of a U.S. economic slowdown and the uncertainty surrounding Trump’s policies, including tariffs. Looking forward, today’s nonfarm payrolls data is expected to provide key insights into the labour market. Any signs of a cooling economy could potentially hurt the greenback further.
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