Pound Sterling (GBP)

The British Pound strengthened against the Euro and the Dollar following robust UK retail sales figures and an unusual financial surplus in January. Retail sales outperformed expectations, bolstering market confidence, while diminishing prospects of Bank of England interest rate cuts further supported the Pound.

 Euro (EUR)

The Euro remained steady against a basket of currencies amidst concerns over President Trump’s tariff threats, which could place additional pressure on the currency. Moreover, the European Central Bank’s dovish stance and expectations of continued rate cuts through mid-2025 may contribute to further weakness in the Euro. For the time being, investors are closely monitoring upcoming PMI data from Germany and the broader Eurozone, which could influence the Euro’s trajectory.

U.S. Dollar (USD)

The U.S. Dollar retreated from its early January highs, with the dollar index declining. This shift followed comments from President Trump regarding potential trade agreements with China, although his threats to impose tariffs on various imports tempered the Dollar’s losses. Additionally, the Dollar found support from the Federal Reserve’s hawkish monetary policy stance, despite the prevailing market uncertainty.