Following a recent decline, which was mostly caused by changes in the US dollar, the value of the pound rose against the euro. Following weaker UK inflation figures and ongoing ambiguity surrounding US monetary policy, sterling recovered. With its performance strongly linked to changes in the attitude of the dollar and wider market responses to international political and economic events, analysts anticipate that the pound will continue to be supported in the near future.
The European Central Bank’s cautious stance and Germany’s poor economic mood statistics put pressure on the euro at the start of the week. Moreover, concerns over U.S. tariffs and their potential impact on Eurozone growth also weighed on the currency. In the end, investors are keeping a careful eye on the next PMI data since indications of economic pressure might further impact sentiment towards the Euro in the face of persistent uncertainty around the world.
As investors responded to President Trump’s proposals for immediate rate reduction and his attempt to restructure the Federal Reserve, the value of the US dollar plummeted, approaching a three-year low. In actuality, anxiety was heightened by contradictory trade signals and questions about the Fed’s independence. Even though Fed Chair Powell resisted pressure to lower rates due to inflation worries, the U.S. Dollar Index ultimately dropped 1.2% to 98.21, losing ground against the pound, euro, and Swiss franc.
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