Key Headlines:

• USD: Growing concerns over a potential recession weigh on the dollar.
• EUR: Green Party resistance challenges EU fiscal expansion plans.
• GBP: Disappointing retail sales data adds pressure on the pound.

Recap

With no major economic data releases yesterday, currency markets followed a broader risk-off sentiment, leading to the Nasdaq’s steepest decline in 2.5 years. Concerns over US economic growth triggered a sharp drop in bond yields, with markets now assigning a 50% chance of a rate cut in May.

Commodity currencies took a hit, while GBP slid to a six-week low against the euro after experiencing its largest weekly drop in over two years. Meanwhile, in Germany, opposition from the Greens to Merz’s spending plans briefly pressured the euro against the dollar, though markets remain optimistic about a potential agreement.

 In the UK, the latest BRC Retail Sales report highlighted a sharp slowdown in consumer spending, with February’s sales growth dropping to 1.1% year-on-year from 2.6% in January.

Today’s Rates

Today's Interbank Rates at 10:16 am against GBP movement.

GBP>EUR – 1.1867

GBP>USD – 1.2932

EUR>GBP – 0.8422

EUR>USD – 1.0893

GBP>CAD – 1.8637

GBP>AUD – 2.0569

GBP>SEK – 13.005

GBP>AED – 4.7488

GBP>HKD – 10.048

GBP>ZAR – 23.595

GBP>CHF – 1.1400

GBP>PLN – 4.9781

Today’s Key Takeaways

• Trump Trade Reversal: Markets have undone all gains from the popular Trump trade as concerns over tariffs and slowing growth increase.
• USD Weakness: Recent disappointing US economic data has challenged the "exceptionalism" narrative, pushing the USD index to a four-month low.
• Key US Inflation Data Ahead: Markets anticipate a slight decline in inflation figures, making tomorrow’s report a crucial event for traders.
• Bank of Canada Decision: Uncertainty looms over tomorrow’s BoC rate decision, with markets pricing in a 50% chance of a 0.25% rate cut.

11^th March 2025

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