Key Headlines:

·       USD Under Pressure as Growth Outlook Deteriorates

·       Lutnick Suggests Possible Tariff Compromise

Recap

• USD Under Pressure as Rate Cut Expectations Rise

·       USD-selling continued as markets increased bets on more aggressive Fed rate cuts.

·       Markets now expect three rate cuts this year, up from two last week.

·       The first cut is now anticipated in June instead of September.

• EUR Gains Support from Germany’s Fiscal Moves

·       Germany to amend its constitution to exempt defense spending from fiscal limits.

·       Plans to establish a €500bn infrastructure fund boost growth outlook.

·       Markets no longer expect three additional ECB rate cuts this year.

• Lutnick Hints at Tariff Compromise

·       US Commerce Secretary signaled potential trade compromise with Canada, Mexico, and China.

·       Eased concerns over escalating trade tensions.

Today’s Rates

Today's Interbank Rates at 11:20 am against GBP movement.

GBP>EUR – 1.2007

GBP>USD – 1.2834

EUR>GBP – 0.8326

EUR>USD – 1.0685

GBP>CAD – 1.8451

GBP>AUD – 2.0425

GBP>SEK – 13.222

GBP>AED – 4.7129

GBP>HKD – 9.7954

GBP>ZAR – 23.620

GBP>CHF – 1.1397

GBP>PLN – 4.9893

Today’s Key Takeaways

USD Faces Further Pressure Ahead of Key Data Releases

·       USD could weaken further if services and ADP payroll data disappoint.

·       Recent USD sensitivity to weaker data heightens downside risk.

·       Markets already anticipate softer figures compared to January.

·       A bigger miss could push GBPUSD and EURUSD higher, both at four-month highs.

EUR Extends Gains on German Fiscal News

·       EUR continues to strengthen after Germany’s fiscal policy announcements.

·       Positive sentiment follows plans for increased defense and infrastructure spending.

5^th of March 2025



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