On Tuesday, the Pound reached a six-week low against the Euro following news that National Insurance Contributions would increase by 1.25%.
This caused concerns that it could cause issues for the economy and force businesses to cut jobs. The losses were limited as the Bank of England suggested that interest rates could increase next year, leading to the currency experiencing decent gains against many of its rivals. At the end of trading, according to the Foreign Exchange Market, the Pound finished at 1.1639 against the Euro and 1.3786 against the US Dollar.
It was a day of mixed fortunes for the Euro yesterday as it lost ground against the US Dollar and made gains against a number of its rivals. German industrial production came in over expectations, giving the single currency a boost while employment and GDP growth in the bloc also came in with favourable numbers. Despite this, any gains were capped after the German ZEW economic sentiment failed to meet forecasts.
The US Dollar experienced another strong day as the US ten-day Treasury note increased to 1.375%. This put the Greenback in a strong position, helping it to continue its recovery after disappointing non-farm payroll data last week. To further boost the currency, a downturn in market sentiment also enhanced the appeal of the USD.