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As widely anticipated, the US Federal Reserve kept interest rates unchanged yesterday. However, during the press conference, Chair Jerome Powell underscored the growing uncertainty surrounding the US economic outlook. He reiterated that the Fed is in no rush to adjust its monetary policy, suggesting a more cautious stance for the months ahead.

Market Reaction Remains Subdued

Markets responded with little fanfare. While the US dollar saw a modest uptick immediately following the Fed’s announcement, those gains were erased overnight as sentiment softened.

Euro Slips Against Major Peers

The euro came under pressure during the session, weakening by 0.4% against both the pound and the dollar. The move reflected broader market caution and relative strength in sterling ahead of today’s Bank of England meeting.

Attention Turns to the Bank of England

UK economic data for January landed broadly in line with expectations earlier this morning. The spotlight now turns to the BoE’s policy decision, where interest rates are expected to remain unchanged. However, the key focus will be the meeting statement and the voting breakdown from the Monetary Policy Committee (MPC), which could offer clues about the future direction of UK rates.

Expert Guidance in Uncertain Times

With central bank decisions shaping global currency markets, now is a key time to review your international payment strategies. For bespoke advice and market insights, speak to a QuMoney expert today.

Today, a flurry of economic data is expected to bring volatility to the markets.

ECB Rate Decision & Eurozone Economic Outlook

The European Central Bank (ECB) is widely anticipated to reduce interest rates by 25 basis points. With Eurozone inflation still elevated at 2.7%, this move aims to push inflation closer to the Bank’s target of 2%.

Meanwhile, EU unemployment is forecasted to remain steady at 6.3% for the third consecutive month.

To round off the day, ECB President Christine Lagarde is set to speak, offering potential insights into the outlook for future rate cuts and the performance of the EU economy.

Market Expectations & GBP/EUR Impact

Analysts expect the ECB to implement another 25-basis point rate cut during their monetary policy meeting in March. Projections suggest the headline rate could reach 1.75% by July, providing some relief to mortgage holders.

The euro is under pressure, given the risk of a dovish ECB rate decision. As a result, GBP/EUR is now trading at a 20-day high, and we anticipate further gains if the ECB proceeds with a rate cut.

What This Means for You

With shifting monetary policies shaping the markets, staying informed is crucial. If you’re looking to manage currency risk or capitalise on market trends, our experts at Qumoney are here to help. Get in touch today for tailored financial insights and strategies.

The British pound surged against the euro today, driven by the latest Eurozone economic data.

Currency Market Movements

Over the past week, the pound has strengthened by 1.75% against the US dollar, while the Australian dollar (Aussie), New Zealand dollar (Kiwi), and Canadian dollar (Looney) are all trading at two-week highs.

Euro Weakens Amid German Consumer Confidence Decline

Today’s data revealed a decline in German consumer confidence, falling below the anticipated -20 mark. As a result, the euro has dipped approximately 0.2% against its major peers.

Key Upcoming Data Releases

• EU Money Supply data is set for release in the morning.
• US Trade Balance data will follow later in the day.

FOMC Fed Policy Announcement

The highlight of the day is the FOMC Fed policy announcement scheduled for this evening. Market expectations suggest a potential interest rate cut by the Federal Reserve later this year. Investors will closely watch any signals from the Fed regarding future monetary policy.

What This Means for You

With key economic releases and policy decisions shaping the markets, staying informed is essential. If you’re looking to navigate currency fluctuations or capitalise on market trends, our experts at Qumoney are here to help. Get in touch today for tailored financial insights and strategies.

Currency markets remained relatively stable yesterday due to limited data releases. This trend is expected to persist today, with only one significant data release scheduled in the United States this afternoon.

US Durable Goods Data & Interest Rate Decision

The primary focus today will be the release of US Durable Goods data, with analysts expecting a 0.8% rebound, following last month’s -1.1% decline.

Looking ahead, tomorrow’s US interest rate announcement will be a critical market event, marking the first Federal Reserve decision under Donald Trump’s second term as president. Trump has openly expressed his desire for immediate rate cuts, but such an outcome is considered unlikely. The decision and its broader economic implications will be a key storyline to watch in 2025.

ECB Policy Outlook & Currency Market Movements

On Thursday, attention will shift to the European Central Bank (ECB). Analysts predict the ECB will adopt a more aggressive stance on monetary policy this year, potentially cutting rates by up to 150 basis points. This move reflects the ECB’s commitment to supporting economic growth in the region.

Despite global uncertainties, the British pound has maintained its strength against the US dollar, holding on to last Friday’s gains. Additionally, the GBP/EUR exchange rate is showing signs of recovery, moving closer to last year’s average levels.

What This Means for You

As key economic events unfold, understanding currency movements is crucial. If you’re looking to manage risk or capitalise on market trends, our experts at Qumoney are here to help. Get in touch today for tailored financial insights and strategies.