Category Archives: FX News

Pound recovery after dollar drop
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Pound Rebounds After Sharp Drop Against the Dollar

Yesterday, the British pound saw a sharp decline against the U.S. dollar, but by the end of the day, it had fully recovered, closing in positive territory. This rebound eased investor concerns after an initial sell-off, highlighting the volatility in currency markets amid ongoing global trade tensions.

Tariffs Take Centre Stage

Tariffs remain the hot topic in global markets. President Trump’s latest move—imposing a 25% tariff on Mexico and Canada—sparked backlash, with both countries threatening to retaliate. This has reignited fears of a potential trade war, which could have far-reaching consequences:

  • 🔺 Higher costs for businesses and consumers
  • 🔺 Disruptions to global supply chains
  • 🔺 A potential slowdown in global trade and economic growth

Temporary Relief, But Uncertainty Remains

In a swift turnaround, Trump struck a deal with Mexico to delay the tariffs for one month, in exchange for stricter border controls. While this provides short-term relief, markets remain on edge over future U.S. trade policies and their potential impact on global economies.

What’s Next for Markets? Key Events to Watch

This week brings several major economic events that could drive currency movements:

📌 Bank of England Rate Decision (Thursday) – With UK economic growth stalling, the BoE is expected to cut interest rates, which could impact the pound’s strength.

📌 US Non-Farm Payrolls (Friday) – A key indicator of U.S. economic strength, this jobs report will influence Federal Reserve policy expectations and the direction of the dollar.

Pound Holds Strong Against the Euro

Despite the uncertainty, by the close of trading on Monday, the pound hit its highest level against the euro since early January. Against the dollar, it recovered fully, trading near last week’s highs, signaling renewed strength in the market.

Navigating Market Volatility

With markets reacting to shifting trade policies and central bank decisions, businesses need to stay informed and prepared. If you’re looking to manage currency risk or capitalise on opportunities, speak to a QuMoney expert today.

Pound vs Euro exchange rate reaction to tariffs
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Pound Gains Against Euro as Markets React to Trump’s Tariff Moves

This morning, the British pound is trading near a monthly high against the euro, reacting to Donald Trump’s latest tariff announcements. While the US dollar strengthened across the board over the weekend, the pound has gained against its European counterparts, as the UK appears to have sidestepped the worst of the U.S. tariffs.

Trump’s Trade Stance: The UK vs The EU

Speaking late on Sunday, Donald Trump stated that the UK is “out of line”, but that any trade issues “can be worked out”. This signals a potentially softer stance towards Britain compared to the European Union, which has been explicitly warned that tariffs are on the way.

The UK holds a unique trade relationship with the U.S., being one of the few nations to have a trade deficit in goods—meaning it imports more from the U.S. than it exports. This could play a role in future trade negotiations.

US Tariffs Hit Canada, Mexico, and China

  • Over the weekend, the U.S. imposed:
  • 25% tariffs on Canadian and Mexican imports
  • 10% tariffs on Chinese goods

These trade actions have strengthened the U.S. dollar, with gains of 1.5% against the pound and 2% against the euro. Currency traders will be closely watching for further developments in trade policy and market reaction.

Key Market Data to Watch Today

  • PMI Data Releases – The UK, Eurozone, and U.S. are all set to release Purchasing Managers’ Index (PMI) data, with expectations of strong readings across the board.
  • EU CPI Flash Estimates (10 AM GMT) – Inflation in the Eurozone is projected to remain steady at 2.4% year-on-year, which could influence ECB policy discussions.
  • US Trade and Tariff Updates – Markets will be closely monitoring any further tariff-related announcements from the U.S. government.

Navigating Market Volatility

With shifting trade policies and currency fluctuations, businesses need to stay ahead of the curve. If you want expert insights on how these changes could impact your business strategy or currency exposure, speak to our QuMoney specialists today.

ECB interest rate cut impact on markets
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ECB Cuts Interest Rates: What It Means for Markets and Currency Traders

The European Central Bank (ECB) took a decisive step yesterday, cutting its key interest rates by 25 basis points. This move brings the deposit rate down to 2.75% and the refinancing rate to 2.90%. Despite reiterating a data-dependent approach, the ECB’s statement and press conference hinted at a continued easing bias, suggesting further rate cuts could be on the horizon.

Muted Market Reaction, But More Cuts Expected

Despite the ECB’s decision, market reactions remained subdued. Futures contracts indicate that traders expect another rate cut in March, with the deposit rate potentially reaching 2% by year-end. Investors and businesses should prepare for the potential ripple effects of prolonged lower interest rates.

Currency Markets React as Dollar Strengthens

Major currency pairs remained within tight trading ranges throughout the European session. However, the US dollar saw overnight gains following comments from former President Trump, who renewed his threats of tariffs on Canada and Mexico. This geopolitical development added a layer of uncertainty to an already cautious market.

What’s Next? Key Data to Watch

Looking ahead, key economic data releases will provide further insight into the direction of global markets:

  • US Core PCE Inflation (December) – The Federal Reserve’s preferred inflation gauge is expected to hold steady at 2.8%, a crucial factor in shaping Fed policy decisions.
  • German HICP Inflation (January) – The Eurozone’s largest economy will release its flash estimate, providing clues about broader inflation trends within the bloc.

How Can You Navigate Market Volatility?

With interest rate shifts and currency fluctuations in play, businesses and investors should stay informed and agile. For expert insights on how these changes could impact your strategy—or to capitalise on emerging market trends—reach out to our QuMoney specialists today.

Market Update: Pound Gains as Key Economic Events Approach
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Market Update: Pound Gains as Key Economic Events Approach

On Friday, the British pound recorded a significant gain of over 100 points against the US dollar, pushing GBP/USD to its highest level since January 8th. This marked a notable performance for the currency despite concerns about the UK economy.

UK Consumer Confidence & Economic Outlook

Despite the pound’s rise, UK Consumer Confidence declined this month, reflecting growing concerns about the country’s economic outlook. Market sentiment remains cautious as economic uncertainty persists.

Key Events This Week: ECB Rate Decision & US GDP Release

This week’s major market-moving events will occur on Thursday:

  • The European Central Bank (ECB) is expected to announce an interest rate cut of 25 basis points, aligning with forecasts. This decision is likely part of a broader strategy, as the ECB is projected to continue reducing rates throughout 2025.
  • The United States will release its latest Gross Domestic Product (GDP) figures on the same day. These figures will provide crucial insights into the strength and direction of the US economy, with potential global market implications.

Pound’s Outlook: Volatility Ahead?

With no key UK economic data scheduled for release this week, the pound’s recent momentum may be tested. The lack of domestic economic indicators could lead to increased volatility, making the currency more sensitive to external developments.

What This Means for You

As markets react to these events, understanding currency movements is essential. If you’re looking to navigate market shifts or capitalise on currency trends, our experts at Qumoney are here to help. Get in touch today for tailored financial insights and strategies.

UK PMI Data Surprise as Eurozone Results Mixed and US Jobs Data Awaited
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Market Update: Market Movements Amid Trump’s Inauguration and UK Employment Data

Yesterday saw limited activity in the financial markets, with the primary focus being the inauguration of President Donald Trump. His decision to invite high-profile business leaders underscored his administration’s commitment to economic growth, private sector collaboration, and fostering innovation, job creation, and global competitiveness.

Currency Market Reactions

Contrary to market expectations, the British pound surged against the US dollar yesterday afternoon, gaining 130 points by 4 pm. This movement reflected a positive market reaction to political developments, despite ongoing uncertainties.

However, while the pound showed resilience against the dollar, it continued to face downward pressure against the euro, highlighting the complex dynamics shaping global exchange rates.

UK Employment Figures and Wage Growth

This morning, attention turned to the release of UK employment data. While projections suggested no change in the ILO Unemployment Rate, the actual figures came in at 4.4%.

Additionally, the Office for National Statistics (ONS) reported that both basic pay (excluding bonuses) and average weekly earnings grew at an annual rate of 5.6% during the three months leading up to November. This suggests real wage growth, which could influence future consumer spending and policy decisions.

Market Outlook: What’s Next?

Market movements this week are likely to be shaped by President Trump’s early days in office, as well as ongoing economic releases. The upcoming January flash PMIs for major advanced economies and further UK labour market statistics will be key data points to watch.

What This Means for You

Navigating market volatility requires strategic insights. If you want to understand how these trends affect your business or explore ways to capitalise on currency movements, our experts at Qumoney are here to help. Get in touch today for tailored financial guidance.

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