Government Borrowing
GBP
The British Pound remained broadly steady as a quiet UK economic calendar provided little direction. However, UK government borrowing came in higher than expected, raising concerns around the public finances. Markets are now awaiting the reaction to the figures and what they could mean for the Pound. Attention also turns to upcoming UK business surveys, with weaker private sector activity potentially adding further pressure on the Pound.
EUR
The Euro remained subdued as political uncertainty in Germany raised concerns about the government’s ability to deliver economic reforms. However, signs of steady business activity across the Eurozone could provide some support. Investors will focus on upcoming business surveys, which are expected to show continued growth across the region. A stable economic outlook could help the Euro, although uncertainty over Germany’s political situation may continue to weigh on sentiment.
USD
The US Dollar initially gained support following the Federal Reserve’s recent decision to raise interest rates, encouraging expectations of further increases. However, stronger investor confidence reduced demand for the Dollar as a safe-haven asset. Attention now turns to comments from Federal Reserve officials. If they suggest that further rate increases may not be necessary to control inflation, the US Dollar could lose some of its recent support.
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