Risk aversion returns as yields support USD; GBP weighed by political uncertainty.
USD – Remains supported ahead of key US inflation data as elevated yields and ongoing geopolitical uncertainty underpin the dollar, with markets cautious about taking aggressive positions before CPI
EUR – Trades with a modestly constructive tone against sterling as ECB hawkish signals provide support, though broader gains remain capped by a firmer dollar and lingering risk sensitivity.
GBP – Continues to trade with a negative bias, weighed down by domestic political uncertainty and technical resistance, leaving sterling vulnerable against both the dollar and the euro.
USD:
The dollar remains underpinned as US yields continue to provide support ahead of today’s CPI release. Ongoing geopolitical tensions and cautious risk sentiment have reinforced demand for the greenback, with markets reluctant to fade USD strength until inflation data offers clearer guidance on the Fed’s policy path. Near‑term direction is likely to hinge on whether CPI surprises sufficiently to shift rate expectations.
EUR:
The euro edged higher against the pound, supported by renewed hawkish signals from the ECB and growing political uncertainty in the UK. While EURGBP has benefited from this relative policy divergence, broader euro strength remains constrained by USD resilience and cautious global risk sentiment. Focus remains on how firmly the ECB maintains its stance as incoming data evolves.
GBP:
Sterling remains under pressure, with GBPUSD capped below the 1.3600 level where key Fibonacci resistance continues to limit upside. UK political uncertainty has weighed on sentiment, leaving the pound vulnerable despite periods of broader market stability. With technical barriers intact and external risk elevated, sterling remains exposed to further downside in the near term.
Economic Calendar
| Expected | Previous | ||
|---|---|---|---|
| 10am BST - EUR | German ZEW Business Confidence - Current conditions | -77.8 | -73.7 |
| 10am BST - EUR | German ZEW Business Confidence - Economic sentiment | -19.8 | -17.2 |
| 1:30pm BST - USD | US CPI (Not adjusted) | 332.68 | 330.21 |
| 1:30pm BST - USD | US CPI MoM (Seasonally adjusted) | 0.6% | 0.9% |
| 1:30pm BST - USD | US CPI YoY (Not adjusted) | 3.7% | 3.3% |
| 1:30pm BST - USD | US Core CPI MoM (Seasonally adjusted) | 0.3% | 0.2% |
| 1:30pm BST - USD | US Core CPI YoY (Not adjusted) | 2.7% | 2.6% |