Monthly Archives: February 2025

Pound Surges on Positive Employment Figures

A great start to the day for anyone exposed to purchasing euros and dollars, as the pound reaches fresh 2025 highs following this morning’s UK employment data release.

A strong set of employment figures has eased pressure on the Bank of England to cut interest rates next month, providing a boost to the pound. UK unemployment figures for December came in at 4.4%, below the market expectation and the Bank of England’s forecast of 4.5%.

Economic Outlook and Interest Rate Expectations

The latest data indicates a strong start to the year for the UK economy, but economists caution that the real test will come when the minimum wage hike and employer tax changes take effect.

With today’s figures reducing pressure on the Bank of England to cut rates next month, markets are now pricing in a higher likelihood that the next rate cut will occur in the second quarter.

Earlier this month, the Bank of England reduced interest rates by 25 basis points, with two voting committee members advocating a larger 50-point cut, assuming that economic conditions were deteriorating faster than expected.

European and US Data Releases

Elsewhere, French CPI figures have been released, meeting expectations at 1.8%.

Later in the morning, Germany’s ZEW business confidence figures are expected, followed by the US NY Fed Empire State Survey in the afternoon. These data releases will provide further insights into business sentiment and economic momentum across key markets.

For businesses looking to navigate currency fluctuations and capitalise on market opportunities, staying informed is crucial. If you’d like to understand how these trends could impact your business or explore strategies to manage market volatility, get in touch with our specialists today.

Last week, markets had plenty to digest across various topics, including geopolitical developments, trade and tariff announcements, inflation data, and central bank commentary. Despite these factors, investor sentiment remained upbeat throughout the week.

Currency markets saw a notable softening of the US dollar. While the greenback has shown weakness at various points in recent weeks, last week saw a more pronounced decline, with the dollar down 1.5-2.0% across major exchanges.

This downward trend was further supported by a ‘risk-on’ atmosphere, reducing demand for the dollar’s traditional safe-haven appeal. Additionally, shifting interest rate expectations played a role. The US Federal Reserve’s rate projections for this year slipped by around 10 basis points, partly reflecting market sentiment that no further changes to US tariff policy are likely. In contrast, rate expectations in the Eurozone and the UK firmed by 7-10 basis points.

Looking ahead, this week’s key macroeconomic highlights include flash PMIs, UK employment data, and the release of the latest Federal Reserve meeting minutes. Investors will also be watching closely for any fresh trade and tariff news that could shape market movements.

For businesses seeking to stay ahead of currency fluctuations and economic developments, expert insights are invaluable. If you’d like to explore how these trends could impact your business or identify opportunities in market volatility, get in touch with our specialists today.

Market sentiment was positive yesterday, as news of a possible resolution to the Russia-Ukraine conflict boosted risk appetite. Investors responded optimistically, driving gains across major market indices on both sides of the Atlantic.

Adding to the upbeat mood, strong business results updates further bolstered confidence. The ‘risk-on’ sentiment was reflected in market movements, with investors willing to take on more risk in response to these developments.

During yesterday’s European session, most major currency pairs traded within tight ranges. However, the euro faced pressure following weaker-than-expected Eurozone industrial production data for December, weighing on the currency.

Meanwhile, the US dollar saw modest initial gains after rumours emerged that the Trump administration was considering a plan to impose reciprocal tariffs on its trading partners. These speculations contributed to slight volatility in dollar trading.

Looking ahead, today’s key economic release is the second reading of the Eurozone’s Q4 GDP. No revisions are expected to the preliminary 0.0% q/q estimate. In the US, market participants will be watching January’s retail sales data, forecasted at -0.1% m/m, alongside industrial production figures, projected at 0.3% m/m.

For businesses navigating these market movements, staying informed is crucial. If you’d like expert insights on how these trends may impact your business or how to capitalise on market volatility, reach out to our specialists today.

It’s shaping up to be a quiet day in the financial markets, with the primary focus on the release of US Consumer Price Index (CPI) data later this afternoon. Investors and businesses alike will be keeping a close eye on the report, as inflation figures can have a significant impact on market sentiment and future interest rate decisions from the Federal Reserve.

Looking ahead, attention will quickly shift to tomorrow’s UK growth figures. These data releases will provide crucial insights into the economic outlook and could influence the direction of the pound in the coming days.

After a volatile start to the week, sterling has found some stability, bouncing back against major currencies. Notably, GBP/USD (Cable) is closing in on a weekly high, offering a potentially favourable opportunity for those looking to purchase US dollars.

For businesses navigating currency fluctuations, understanding these market movements is key to making informed decisions. If you’d like expert insights on how these trends could impact your business or how to take advantage of market volatility, our team is here to help. Get in touch with one of our specialists today.

With minimal economic data releases this morning, market attention turns to Bank of England (BoE) Governor Andrew Bailey. Investors will closely analyse his remarks for clues on the central bank’s outlook, particularly regarding interest rate cuts and inflation trends. His comments could shape expectations for UK monetary policy in the months ahead.

US Inflation Data in Focus Tomorrow

The next major market-moving event comes from the United States, with the Consumer Price Index (CPI) report set for release tomorrow afternoon.

• Expected Inflation Rate: 2.9%
• Market Impact: A stable or lower reading could reinforce expectations of Federal Reserve rate cuts, while a higher-than-expected figure could boost the dollar and delay monetary easing.

Given the global influence of US economic data, traders will be watching closely for any inflation surprises that could shake markets.

UK GDP Data to Highlight Economic Stagnation

On Thursday, the UK will release Q4 GDP figures, a key indicator of economic performance.

• Forecast: -0.1% contraction
• Trend: The UK economy has failed to grow since July, reinforcing concerns about stagnation and weak domestic demand.
• Impact: A weaker-than-expected GDP figure could further pressure the pound, adding to concerns over the UK’s economic trajectory.

Pound Weakens Across the Board

As the week begins, the British pound is struggling against all major currencies, reflecting broader market sentiment and economic uncertainty. With Bailey’s remarks, upcoming inflation data, and GDP figures all in play, volatility in GBP trading is likely to increase.

Navigating Market Volatility

With key central bank decisions and economic reports ahead, businesses and investors should stay informed and prepared. Whether you’re looking to hedge currency exposure or capitalise on market trends, speak to a QuMoney expert today.