The Weekly Market Update
News & Insights
w/c 18th May: Political Disruption
GBP
The British Pound weakened last week as political turmoil in Westminster unsettled investors and overshadowed surprisingly strong UK growth figures. Concerns over Prime Minister Keir Starmer’s leadership, cabinet instability and speculation around potential successors hurt confidence while rising government borrowing costs added pressure. Although the economy expanded more than expected, markets remained focused on political uncertainty. Leadership tensions and employment and inflation data could keep the British Pound strained.
EUR
The Euro showed mixed performance last week, initially supported by improving German economic sentiment before broader market caution boosted demand for safer assets. Ongoing geopolitical uncertainty encouraged investors to favour the single currency, particularly against politically exposed rivals. However, concerns about weak economic activity across the Eurozone continued to limit enthusiasm. Upcoming business activity, consumer confidence and economic sentiment surveys will be closely watched for signs of weakening growth momentum.
USD
The U.S. Dollar strengthened as resilient economic data reinforced confidence in the American economy despite global uncertainty. Strong consumer spending, firm trade data and persistent inflation pressures supported expectations that interest rates could remain elevated for longer. Investors also favoured the Dollar as demand for safer assets increased during wider market uncertainty. Growing confidence in the US economic outlook helped the currency regain momentum after a softer period earlier in the year.
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