The Weekly Market Update
News & Insights
w/c 16th February: Quiet Start
GBP
The British Pound remains sensitive to UK politics after renewed pressure on Prime Minister Starmer. Although he has survived the immediate challenge, the episode has reminded markets that leadership risk has not disappeared. That uncertainty comes just days after the Bank of England signalled rates are likely to fall again in the coming months. Labour market data is due tomorrow, followed by inflation on Wednesday. Both releases could shape expectations for a March rate cut and drive short-term moves in the Pound.
EUR
The Euro is holding steady as attention shifts away from immediate political tension in Europe and towards this week’s inflation data. Markets expect Eurozone inflation to fall back towards 3%, which would support the view that price pressures are easing. The European Central Bank has indicated it is comfortable with the current policy stance for now. With little data today, the Euro is likely to follow global sentiment and US developments rather than domestic drivers.
USD
The U.S. Dollar is starting the week quietly, with US markets closed for Presidents’ Day. Thinner liquidity can keep movements contained early on. Focus turns to a busy run of US data later in the week, including employment and inflation figures. January’s CPI showed cooling price pressures, but jobs data remains firm. These releases will be key in shaping expectations for Federal Reserve policy and could set the tone for the Dollar in the days ahead.
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