The Weekly Market Update
News & Insights
w/c 17th November: Shifting Expectations
GBP
The British Pound continues to struggle under the weight of political upheaval, fiscal uncertainty and weakening domestic data. In fact, chaotic pre-budget leaks and abrupt policy reversals have undermined confidence in government decision-making, increasing the risk premium attached to sterling. Moreover, rising unemployment, slower growth and mounting expectations of Bank of England rate cuts add further strain. With inflation likely to cool again this week, sentiment toward the Pound remains fragile and cautious.
EUR
The Euro has held firm as improved global risk appetite and policy stability within the Eurozone help offset mixed economic data. While German sentiment has deteriorated and industrial output has surprised to the downside, the currency remains supported by expectations that the European Central Bank will maintain its policy stance. Against a backdrop of UK political volatility and fiscal doubt, the Euro’s relative steadiness continues to attract investor confidence.
USD
The U.S. Dollar has softened as the end of the government shutdown restores the flow of delayed economic reports, prompting investors to pause ahead of key labour-market and inflation data. These releases will help clarify the Federal Reserve’s policy path, with softer figures likely reigniting expectations of rate cuts. Ultimately, improving global sentiment has reduced safe-haven demand, leaving the Dollar vulnerable to further pullbacks as markets reassess economic momentum.
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