Pound Sterling (GBP)
The British Pound is experiencing a short-term recovery against the U.S. Dollar, driven by easing concerns over universal tariffs. Despite ongoing economic challenges in the UK, the recent negativity surrounding the Pound appears exaggerated. With market expectations now largely accounted for, the Pound has room to recover and potentially gain further strength in the near term.
Euro (EUR)
The Euro gained momentum after encouraging data revealed signs of recovery in the German economy, highlighted by January’s Composite PMI surpassing projections. Growth in the services sector and stabilisation in manufacturing suggest Germany could be emerging from recession. Positive PMI figures from France and the broader Eurozone added to the Euro’s strength. Rising inflationary pressures may prompt the ECB to slow the pace of rate cuts, potentially supporting the Euro against both the Dollar and the Pound.
U.S. Dollar (USD)
The U.S. Dollar weakened notably as President Trump’s decision to abandon universal tariffs alleviated market fears, although tariffs against the EU, Mexico and Canada are still being talked about. This diminished the Dollar’s safe-haven appeal and heightened expectations for Federal Reserve rate cuts. With limited U.S. economic data scheduled early in the week, the Dollar’s trajectory will likely hinge on future Fed policy and upcoming economic indicators.