Spectrum Daily Report

GBP: The British Pound rose after the Bank of England kept interest rates at 4.5% and indicated a gradual approach to removing policy restraint. This hawkish stance boosted Sterling sentiment. However, GBP’s momentum could be challenged by upcoming UK consumer confidence data, which is expected to show a decline. If the forecasted drop is accurate, the Pound may face pressure as the week concludes.

EUR: The Euro faced challenges despite positive comments from ECB President Christine Lagarde. It fluctuated against several peers, struggling to gain momentum. As markets await the release of Eurozone consumer confidence data, the Euro’s movement remains uncertain. If the data shows a slight improvement, it could offer some support to the Euro by the end of the week, though broader trends remain cautious.

USD: The U.S. Dollar firmed as investors bet on no near-term interest rate cuts, recovering from post-Fed losses. Markets grew convinced the Federal Reserve will maintain higher rates for longer, despite projections of 50-basis points of cuts in 2025. In fact, the Dollar Index rose 0.2%, supported by resilient labour market data, while investors largely ignored calls for rate cuts from President Trump and focused on the Fed’s cautious outlook.

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