Persistent Inflation
GBP
The British Pound remained supported despite ongoing concerns about the UK economy. Bank of England policymaker Clare Lombardelli suggested that persistent inflation, particularly from higher energy costs, could require further action to keep price pressures under control. Her comments have increased expectations that interest rates could rise again. However, continued economic uncertainty and cautious market sentiment could limit the Pound’s strength in the near term.
EUR
The Euro gained some support as stronger German business confidence pointed to improving conditions in the region’s largest economy. However, its momentum remained limited by wider market pressures and uncertainty. Looking ahead, weaker German consumer confidence could weigh on sentiment, with rising energy costs and expectations of higher interest rates likely to make households more cautious about spending and the economic outlook.
USD
The US Dollar remained supported by expectations that the Federal Reserve could take stronger action to control inflation. Strong economic data and signs of a resilient jobs market have increased expectations of higher interest rates. However, weaker economic figures could provide some relief. The Dollar may also benefit from cautious investor sentiment, particularly amid concerns over global borrowing costs and ongoing geopolitical uncertainty.
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