The UK economy is seen to be entering into a time of low growth and higher inflation, more commonly known as stagflation, the pairing of the two doesn’t give much hope to the Pound.
Sterling has continued to fall against the Euro and US Dollar following the subpar report that the UK economy grew by a mere 0.1% month on month, however the expectation was that reports would show 0.2%.
Any momentum we saw in a ‘recovery rally’ yesterday in the Pound has now very much become short lived.
With the Economy’s stunted growth and the UK’s Chancellor Rachel Reeves somewhat banking on seeing improvement to offset her plans to increase spending by untold amounts. Markets have remained concerned that without the optimistic growth, the UK’s debt plans will become increasingly more challenging, which has caused a knock-on effect of a selloff of UK debt and the Pound.
Her recent trip to China amongst all the chaos wasn’t most welcome from markets or politicians from opposing parties.
Over in the US, the Dollar remains one of the more dominant currencies within the G10, with continued pressure on the Euro, the EURUSD pair continues to move lower towards that parity level, will it get there?
In just under a week, Trump is due to take office and become the 47th President of the US, cementing his 2nd term. Markets will remain volatile across the board, however the Dollar may continue to make ground, as Trumps plans become ever closer to taking shape.
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