Cautious Approach
GBP: The British Pound found some support ahead of the Bank of England’s latest decision but lost momentum after policymakers signalled a cautious approach to interest rates. While stronger Eurozone growth offered limited support to the Euro, attention now turns to upcoming inflation data. A weaker reading could help the Pound regain ground, while stronger inflation may keep pressure on the Pound in the near term.
EUR: The Euro was supported by stronger than expected Eurozone growth, although the positive data failed to spark a lasting rally. Attention now shifts to the latest inflation figures, which could shape expectations for future European Central Bank policy. Stronger inflation may underpin the single currency, while a softer reading could leave the Euro on weaker footing heading into the weekend.
USD: The US Dollar came under pressure after the Federal Reserve left interest rates unchanged, prompting investors to reduce expectations for further policy tightening. Attention now turns to US consumer confidence, with stronger data likely to offer some support. However, broader market sentiment remains important, as rising geopolitical tensions could boost demand for the safe-haven currency.
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