Cost Squeeze
GBP: The British Pound has come under pressure after weak UK business data showed a slowdown in activity and a sharp rise in costs. Companies are feeling the impact of higher energy prices linked to the Middle East conflict, with confidence also falling. Inflation held at 3%, but this data was from before the recent oil surge. For now, rising costs and softer growth are weighing on Sterling.
EUR: The Euro is fairly steady, although it remains sensitive to energy prices and developments in the Middle East. Policymakers have warned that higher energy costs could push inflation up again, creating challenges for the region. While there are signs of possible talks, uncertainty remains. As a result, the Euro is holding its ground but lacks strong momentum in either direction.
USD: The US Dollar remains supported despite signs of possible peace talks. Even with reports of a potential ceasefire plan, markets remain cautious and investors continue to favour the Dollar. Oil prices are still elevated and geopolitical risks have not disappeared. The Dollar is benefiting from this uncertainty, while also being supported by its role as the main safe-haven currency during periods of global tension.
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