The British Pound is under pressure amid uncertainty surrounding impending tax hikes and spending cuts. Analysts warn that the government’s constrained fiscal options could result in further tax increases this autumn, heightening concerns for businesses and consumers. Additionally, the risks of economic stagnation and changes to employment laws further contribute to negative sentiment, leaving the Pound vulnerable in the coming months.
The Euro remains resilient despite rising concerns over trade tariffs. Recently, it has ranked among the top-performing G10 currencies, driven by market optimism. However, some analysts caution that this strength may not be sustainable, suggesting that the Euro’s performance reflects a selective interpretation of trade developments while downplaying risks such as potential tariffs on EU exports.
The U.S. Dollar weakened against major currencies yesterday as concerns over President Trump’s tariff announcements reignited fears of an economic downturn. However, risk aversion in the market helped limit losses. The USD Index hovered below 104.50, while PCE inflation is projected to hold steady at 2.5%. Going forward, the Dollar’s performance will be closely influenced by upcoming U.S. economic data.
