Pound Sterling (GBP)

The British Pound appreciated after Q4 2024 GDP data surpassed expectations, showing a 0.1% expansion. The stronger economic performance reduced fears of additional interest rate cuts by the Bank of England. Growth was primarily fuelled by government spending, and analysts project a 1.5% increase in GDP for 2025, which could bolster the Pound and support a recovery in the near future.

 Euro (EUR)

Meanwhile, the Euro weakened as market sentiment turned negative following disappointing economic data from Europe. A sharp drop in Italian industrial production further highlighted concerns over slow regional growth. The Euro’s decline reflects persistent economic challenges, with investors remaining cautious amid weak performance and uncertainty surrounding the European Central Bank’s monetary policy.

U.S. Dollar (USD)

The U.S. Dollar strengthened after higher-than-expected January inflation data signalled ongoing inflationary pressures. Consumer prices rose 3% year-over-year, while core inflation climbed to 3.3%. This has increased speculation that the Federal Reserve may postpone interest rate cuts. Fed Chair Jerome Powell stressed the importance of avoiding abrupt policy shifts to control inflation, suggesting a cautious stance in the coming months.