Anticlimactic Market
GBP: The British Pound strengthens as easing geopolitical tensions boost market sentiment. A ceasefire agreement reduces risks of conflict escalation, calming investors and supporting global stability. Lower energy prices further aid the domestic outlook. The improved mood drives a relief rally in sterling, though uncertainty remains as shifting expectations around central bank policy and inflation could influence its direction in the near term.
EUR: The Euro traded in a narrow range as Eurozone services activity slowed to a ten-month low, signalling near-stagnation. Despite weaker growth, rising price pressures supported expectations of further monetary tightening by the European Central Bank, helping limit losses. Looking ahead, a potential recovery in German factory orders may support the currency, while a projected contraction in retail sales could weigh on sentiment and pressure the euro.
USD: The US Dollar traded unevenly amid geopolitical uncertainty linked to tensions with Iran, but a newly established ceasefire has reduced immediate risks and weakened the currency. Earlier safe-haven demand faded as fears of disruption to global trade routes eased. At the same time, disappointing durable goods data signalled softness in manufacturing, further pressuring the dollar and limiting confidence in its near-term outlook going forward overall.
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