Bank of England
GBP
The British Pound remained subdued after UK inflation rose in August, as the figures matched expectations and did little to change views on Bank of England policy. Attention now turns to the Bank’s latest decision and guidance on future policy. With policymakers divided, the Pound could react to any change in tone, particularly if officials signal a more cautious or supportive approach.
EUR
The Euro struggled to build momentum as recent economic data provided limited support. Eurozone industrial production fell in July, although the decline was smaller than expected. However, earlier figures were revised lower, highlighting some weakness in the region’s economy. Attention now turns to final August inflation figures, with a stronger than expected result potentially giving the Euro some support in the near term.
USD
The US Dollar remained supported after the Federal Reserve raised interest rates, its first increase since 2023. Policymakers indicated that another increase could follow before the end of the year, while concerns over persistent inflation, higher oil prices and strong economic activity added to expectations of further tightening. However, future decisions will depend on incoming inflation and employment data, keeping the dollar sensitive to economic developments.
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