Tag Archives: USD

UK Inflation Figures Drive Market Sentiment

The economic calendar was relatively light today following the early morning release of UK CPI data for January. The figures showed both headline and core inflation rates increased to 3.0% and 3.7%, respectively, reinforcing concerns about persistent price pressures.

ECB Signals Hawkish Stance

On the monetary policy front, European Central Bank (ECB) official Isabel Schnabel expressed a hawkish tone yesterday. She indicated that risks to the inflation forecast remain tilted to the upside, signaling that the ECB is moving closer to ending its rate reduction cycle. This statement has influenced Eurozone market rate forecasts, which edged up by approximately 5 basis points.

US Fed Meeting Minutes Provide Little New Insight

Meanwhile, the latest Federal Reserve FOMC meeting minutes offered no fresh indications regarding the future trajectory of US interest rates. Against this backdrop, the US dollar gained momentum, supported by a weakening risk appetite.

Dollar Gains Amid Market Uncertainty

As a result of these developments, the dollar rose by 0.2% against both the euro and sterling, reflecting investor caution in the currency markets.

Key Economic Releases to Watch

The primary data release of the day will be a flash reading of Eurozone consumer confidence for February. Additionally, US initial unemployment claims data will be closely monitored, providing further insight into labor market trends and potential economic shifts.

For businesses navigating currency fluctuations and market volatility, staying informed is crucial. If you’d like to explore how these trends may impact your business or identify opportunities within market movements, get in touch with our specialists today.

Pound Strengthens Following Inflation Figures

The pound has pushed higher this morning following the latest inflation figures, which showed a notable increase in price pressures across key sectors.

Inflation in January 2025 rose to 3%, up from 2.5% in December, driven by rising costs in transport, food, and education. This marks a significant jump, reflecting persistent inflationary pressures in the UK economy.

Services Inflation at Highest Level Since August 2024

One of the key contributors to this rise was services inflation, which surged to 5%, its highest level since August 2024. This increase highlights the ongoing cost pressures in the service sector, which could influence future monetary policy decisions.

Bank of England’s Interest Rate Outlook in Question

This morning’s inflation data is likely to disrupt the Bank of England’s interest rate strategy, as policymakers balance the need to control inflation against the risk of stifling economic growth. While inflation remains elevated, expectations for near-term rate cuts are likely to be scaled back as the Bank considers its next move.

Market Focus Shifts to US Housing Data

With no major EU economic releases today, market attention will turn to the US Housing Starts data, which could provide further insights into the strength of the US economy.

For businesses looking to stay ahead of market movements and navigate currency fluctuations, expert insights are essential. 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.

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.