Sterling began 2026 under discernible pressure, weighed down by a noticeable rise in redundancy notifications that investors should view as an early warning on the UK labour market. In the week to 12 January, the British pound weakened against both the euro and the US dollar after data pointed to a marked increase in potential job losses. Cable briefly tested levels around 1.34, while GBP/EUR opened near 1.15, reflecting a market that is increasingly factoring in downside risks to UK economic momentum.
In the United States, momentum in the dollar that had been evident at the end of last year softened sharply as political pressures on the Federal Reserve resurfaced. While late December’s labour data did show a modest fall in the unemployment rate, supportive wage growth and a solid payrolls report were overshadowed by broader concerns over central bank independence. Legal action initiated by the US Department of Justice relating to Federal Reserve activities amplified this sentiment, and the resulting uncertainty has acted as a headwind for the greenback.
Euro‑area currencies conversely benefited from a combination of US dollar weakness and comparatively robust regional data. The euro started the week above 1.16 against the dollar, supported by a stream of positive releases across major economies in the bloc. German factory orders exceeded expectations with a notable rise, while industrial output in France and Spain also surpassed forecasts.
Finseta Plc (LON:FIN), formerly Cornerstone FS PLC, is a United Kingdom-based foreignexchange and payments company offering multi-currency accounts and payment solutions to businesses and individuals through its global payments network.
