Key Headlines:

• Investors anticipate two ECB rate cuts in 2025.
• GBP/USD and EUR/USD surge to their highest levels in four months.

Recap

Yesterday’s market trends persisted into the afternoon, with the euro leading gains as Germany’s plans to increase defence spending boosted sentiment. This shift led investors to scale back expectations of three additional ECB rate cuts this year. Meanwhile, the US dollar continued to weaken amid concerns over the economic impact of tariffs, with markets briefly pricing in a 20% chance of four Fed rate cuts before settling on expectations of three. Despite stronger-than-expected ISM Services data later in the day, it had little effect in slowing the USD’s decline.

Today’s Rates

Today's Interbank Rates at 09:51 am against GBP movement.

GBP>EUR – 1.1927

GBP>USD – 1.2880

EUR>GBP – 0.8386

EUR>USD – 1.0803

GBP>CAD – 1.8479

GBP>AUD – 2.0342

GBP>SEK – 13.034

GBP>AED – 4.7301

GBP>HKD – 10.013

GBP>ZAR – 23.611

GBP>CHF – 1.1413

GBP>PLN – 4.9778

Today’s Key Takeaways

• ECB Rate Cut Expected: Markets anticipate a 0.25% cut, with little impact on volatility. The focus will be on Christine Lagarde’s statement for clues on future policy.
• Potential EUR Strength: Any positive economic outlook from the ECB could reduce the likelihood of a third rate cut this year, supporting the euro.
• Technical Indicators in Focus: GBP/USD and EUR/USD have both moved above the 200-day moving average and appear overbought—raising questions about whether the rally is nearing its peak.
• Key Data to Watch: Strong US economic data may be needed to trigger a reversal, with Friday’s non-farm payroll report set to be a major market mover.

06^th March 2025

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