The Weekly Market Update
News & Insights
w/c 23rd March: War Fallout
GBP
The British Pound begins the week on the back foot after a sharp sell-off into Friday, driven by rising concerns over the UK’s public finances. Higher oil and gas prices are increasing the risk of renewed inflation, while markets worry the government may need to step in with support measures. Unusually, the Pound has fallen even as bond yields rise, a sign of investor concern. This week’s UK inflation data and PMI readings will be key in shaping expectations for the Bank of England.
EUR
The Euro is holding relatively firm, supported by rising interest rate expectations and a more stable outlook compared to the UK. Some policymakers have hinted that further rate increases could be considered if inflation picks up again. However, the region remains exposed to higher energy prices, which could weigh on growth. Markets will focus on PMI data this week, which should give a clearer picture of how the economy is holding up.
USD
The U.S. Dollar remains well supported as investors move into safer assets amid escalating tensions in the Middle East. Rising oil prices are also helping the US outlook, as the country is less reliant on imported energy than Europe. Markets are also reacting to signals from the Federal Reserve, which has highlighted uncertainty and kept a cautious stance on rate cuts. This week’s US PMI data and broader risk sentiment will be key drivers for the Dollar.
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