The Weekly Market Update
News & Insights
w/c 23rd February: Political Risk
GBP
The British Pound struck a new year to date low last week as soft employment data, cooling wage growth and easing inflation intensified expectations of a Bank of England rate cut. Although stronger retail sales, a solid services PMI and a sizeable January budget surplus sparked a late rebound, momentum remains fragile. Technical signals show risks skewed lower while below key resistance, with political uncertainty adding potential volatility in the near term.
EUR
The Euro without clear direction last week, struggling to secure sustained support amid lingering uncertainty over the Ukrainian peace process. Upbeat Eurozone PMI data signalled tentative improvements in private sector activity, helping to ease fears of a deeper slowdown and offering some underlying support. However, gains were limited and near-term performance may hinge on incoming inflation data and broader political and economic developments.
USD
The U.S. Dollar has recently led G10 gains on safe-haven demand amid Middle East tensions, underpinned by deep Treasury liquidity and funding markets. However, it fell after the Supreme Court struck down President Donald Trump’s tariff powers, despite plans for alternative measures. Firm data, possible Federal Reserve rate cuts, shifting hedging demand, political uncertainty and persistent de-dollarisation debates continue to shape its volatile near-term outlook.
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