Key Headlines:

• USD: Showing resilience after recent declines
• EUR: Uncertainty grows over the proposed fiscal package
• GBP: Struggles as GDP data disappoints

Recap

Markets found some stability on Friday after a turbulent week dominated by tariff concerns, with investors interpreting the lack of new trade announcements from Trump as a positive sign. Risk sentiment improved further in Germany, where Chancellor-in-waiting Friedrich Merz secured Green Party backing to adjust the country’s debt brake, paving the way for a historic €1 trillion fiscal package. Meanwhile, the pound weakened as UK GDP data showed an unexpected contraction in January, prompting Chancellor Reeves to acknowledge the nation’s economic struggles. The USD also dipped after Michigan Consumer Sentiment fell to its lowest level since November 2022, alongside a sharp rise in inflation expectations. Over the weekend, US Treasury Secretary Bessent called the recent stock market correction “healthy” but didn’t rule out a potential recession, while Trump reiterated that reciprocal tariffs would take effect on April 2. Attention now turns to today’s US Retail Sales data, where markets anticipate a rebound from last month’s figures.

Today’s Rates

Today's Interbank Rates at 09:23 am against GBP movement.

GBP>EUR – 1.1894

GBP>USD – 1.2945

EUR>GBP – 0.8407

EUR>USD – 1.0883

GBP>CAD – 1.8584

GBP>AUD – 2.0417

GBP>SEK – 13.108

GBP>AED – 4.7534

GBP>HKD – 10.060

GBP>ZAR – 23.523

GBP>CHF – 1.1433

GBP>PLN – 4.9699

Today’s Key Takeaways

• Central Bank Decisions: The US Federal Reserve and the Bank of England are set to announce interest rate decisions this week, with no changes expected.
• Fed Outlook: The release of updated dot plot projections will provide insight into future rate expectations, GDP growth, inflation, and unemployment forecasts. Previous projections suggested two rate cuts in 2025, with markets anticipating easing to begin in H2 2024.
• UK Employment Data: Investors will closely watch the latest UK jobs report, with particular focus on wage growth trends.

17^th March 2025

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