Data Driven
The British Pound weakened on UK data and consumer confidence, though Bank of England warnings supported recovery; GDP and manufacturing data await.
The Euro strengthened on stronger activity and business confidence, while weak German sentiment tempered gains; inflation data may influence rates.
The U.S. Dollar strengthened on resilient US data and rate expectations; upcoming jobs figures could shape Federal Reserve policy expectations.
GBP
The British Pound came under pressure last week as weak UK economic data and falling consumer confidence weighed on the Pound. Government borrowing rose, services activity slowed, and retail orders fell to a record low. The Pound recovered slightly after the Bank of England warned that high energy prices could require higher interest rates. This week, UK GDP revisions and manufacturing data could influence the Pound’s direction.
EUR
The Euro strengthened last week as stronger than expected economic activity and improving business confidence supported demand. Eurozone manufacturing and services activity both performed better than expected, while German business sentiment reached a three-year high. However, weaker German consumer confidence limited some of the gains. This week, investors will focus on Eurozone inflation, with higher inflation potentially increasing expectations of further interest rate rises.
USD
The US Dollar strengthened as strong US economic data increased expectations of further Federal Reserve interest rate rises. Business activity and employment figures both showed resilience, boosting confidence in the dollar. This week, attention will centre on US jobs data, which could influence expectations for the Fed’s next decision. A strong jobs report could provide further support for the dollar, while weaker figures may ease pressure.
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