Sterling surged on Wednesday, with the pound-to-dollar exchange rate hitting its highest level since February 2022 — marking a fresh three-year high. This rally reflects both renewed confidence in the pound and continued weakness in the US dollar.
Dollar Weakness Fuels Sterling Rally
The move higher was part of a broader advance in the pound, driven by easing market volatility and the ongoing USD sell-off that has defined the early part of 2025.
Fears of a US economic slowdown continue to weigh on the greenback, offering the pound additional upside potential in the weeks ahead — particularly if today’s economic data disappoints.
Data Deluge from the Eurozone
Today brings a wave of EU data, including:
- French CPI
- German Retail Sales
- Eurozone GDP growth figures
These releases will be watched closely for signs of inflation persistence and economic resilience, particularly as the ECB considers its next policy move.
UK House Prices Weaken
Already released this morning, the UK House Price Index showed a steeper decline than expected, falling 0.6% on the month. While not entirely surprising given the high interest rate environment, this underlines the strain in the UK property sector.
US Data Could Shift Sentiment
Later today, a raft of US economic data is due, including:
- ADP Employment Change
- Q1 GDP
- Personal Income & Spending
Markets will be analysing these numbers for signs of economic momentum — or lack thereof. Any downside surprises could deepen dollar losses and further support GBP/USD gains.
Time to Act on Market Moves
With Sterling showing strength and data driving daily volatility, now is the time to evaluate your FX exposure. Sudden shifts in sentiment could offer opportunity — or risk — depending on how you’re positioned.
Qumoney’s currency experts are on hand to help you make sense of today’s market and capitalise on favourable rates.
Speak to us today for timely insights and bespoke foreign exchange strategies.