Last week, the British pound saw its biggest weekly rise since November 2022, rising sharply versus the dollar. A widespread dollar selloff has spurred this rising trend, as the pound has surpassed important technical levels. The Pound is overbought as a result of the sharp increase, though, indicating a possible short-term pause or consolidation. Although there is still hope, there may be a little decline.
In Europe, a €500 billion infrastructure spending proposal in Germany caused the euro to rally against its peers. It is anticipated that this plan will strengthen Germany’s economy, leading to increased inflation and growth projections. The Euro is supported by the market’s expectation that the likelihood of ECB rate cuts will decline. However, if U.S. trade penalties on the EU are imposed, the Euro’s strength may be challenged, which might result in setbacks.
Since early March, there has been pressure on the US dollar, mostly as a result of a widespread selloff. Particularly in light of recent inflation data, market expectations for rate cuts by the US Federal Reserve have grown. Actually, there may be some surprises in the U.S. CPI for February, which will be a major emphasis. Furthermore, political unpredictability and tariff worries—especially those raised by President Trump—have increased the dollar’s volatility and contributed to its recent drop.
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