Data Dependant
The British Pound may strengthen on resilient UK data and higher inflation, though weak retail sales could limit gains; services activity remains supportive.
The Euro remains subdued, with weaker German data and soft activity weighing, though ECB guidance could provide support if further action signals emerge.
The U.S. Dollar remains pressured by easing inflation and rate expectations, though Middle East uncertainty supports it; Fed minutes may signal future policy.
GBP: The British Pound could strengthen if upcoming UK inflation and employment figures point to a resilient economy. Higher inflation may increase expectations of further Bank of England action, supporting the Pound. However, weaker retail sales could limit gains. Strong services activity may help offset any weakness, while the pound’s performance is likely to remain dependent on the UK’s economic data throughout the week.
EUR: The Euro remained subdued after weaker German wholesale prices and could face further pressure if economic sentiment deteriorates. However, comments from the European Central Bank and its latest meeting minutes could support the currency if they suggest further action. Softer Eurozone economic activity may limit any gains, particularly if upcoming business surveys point to weaker growth.
USD: The US Dollar has faced pressure as expectations of higher interest rates have weakened, with signs that inflation is easing. A sharp rise in longer-term US borrowing costs and a slump in retail sales have also weighed on the currency. However, ongoing Middle East uncertainty has provided some support. Investors will be watching Federal Reserve meeting minutes for clues about future interest rate decisions.
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