EUR – The euro continues to outperform sterling, with EUR/GBP holding recent gains following the weaker UK employment release. Against the dollar, EUR remains constructive, although a sustained break above 1.1615 is needed to confirm further upside momentum

USD – The dollar remains relatively stable despite fading expectations for additional Fed tightening. Safe-haven demand linked to ongoing US-Iran tensions is helping support the greenback and limiting broader USD weakness.

Sterling is trading on the back foot after UK unemployment remained at 4.9%, higher than the 4.8% forecast. The data has reinforced concerns around the UK labour market and broader economic outlook, weighing on GBP sentiment. As a result, Cable has drifted towards fresh recent lows, while the pound has also lost ground against both EUR and JPY.

The euro remains supported, particularly against sterling, as softer UK data continues to favour EUR/GBP. EUR/USD briefly dipped below 1.1600 amid geopolitical concerns, but the overall tone remains constructive. Market participants continue to watch the 1.1615 level, with a sustained break higher likely to encourage further gains.

The dollar is holding firm despite reduced expectations for additional Fed rate hikes. Ongoing geopolitical uncertainty and safe-haven demand continue to support the Dollar Index, preventing a more significant decline. While the Fed outlook has softened, markets remain cautious about selling the dollar aggressively.