The GBP remains under pressure despite conditions that would normally support its value. Investors are increasingly concerned that political decisions are fueling inflation while dampening growth, heightening the risk of stagflation. Attention now turns to the upcoming budget from Torsten Bell, which is expected to feature significant tax and spending measures, further unsettling markets. This ongoing uncertainty over the UK’s economic path continues to drag on sentiment toward the Pound.
The Euro is holding firm despite rising political uncertainty in France, where a looming confidence vote poses risks to the government. Investors are watching closely to see if this challenge stays confined to France or evolves into a wider Eurozone concern. For now, a lack of major economic data and a generally cautious market backdrop have kept the currency stable. That stability could be tested mid week if expected weak German consumer confidence data reinforces ongoing pessimism in Europe’s largest economy.
The USD came under pressure after the Federal Reserve signaled a possible rate cut, with Jerome Powell emphasizing risks to employment over inflation concerns. Adding to market unease, political interference highlighted by Trump’s bid to oust a Fed governor has raised doubts about the central bank’s independence. Speculation over growing political influence on monetary policy is undermining confidence, fueling worries about the Dollar’s long term stability and global standing.
