OUR SUMMARY
This week’s outlook highlights a sustained narrative of EUR weakness, with GBPEUR maintaining its climb and EURUSD appearing increasingly at risk of dipping below June support levels. European markets remain on edge amid ongoing concerns over the Trump administration’s potential tariffs, which heightens perceived economic risks for the region.
Several investment banks on Friday projected that the pound would continue outperforming non-dollar currency crosses, grounded in the view that the UK’s vulnerability to trade restrictions remains relatively lower. Added to this is the Bank of England’s suggestion of a gradual pace for rate cuts, boosting
confidence in GBP’s stability.
Tuesday’s UK job numbers will be pivotal, with signs of job market strength likely bolstering GBP gains. Governor Bailey’s address on Thursday, followed by Friday’s anticipated GDP figures, will add further depth to market expectations around GBP performance.
In the US, attention will center on inflation data (CPI and PPI) and retail sales, with stronger figures likely supporting USD by adding weight to the argument for fewer rate cuts over the coming year. Additionally, the market will keep a close watch on midweek developments as Republicans aim to secure a House majority.
