Pound Sterling (GBP)

The British Pound weakened against major currencies after UK inflation data showed that price increases were slowing. The annual Consumer Price Index (CPI) dropped to 2.8% in February, lower than expected but still above the Bank of England’s 2% target. The Pound also faced pressure due to uncertainty surrounding the upcoming UK Spring Statement, which is expected to include welfare cuts and increased defence spending.

Euro (EUR)

Meanwhile, the Euro gained strength as investors focused on Germany’s upcoming vote on significant debt reforms. The proposed increase in government borrowing, including a €500 billion fund for defence and infrastructure, is seen as a major economic boost. Optimism about these fiscal policies supported the Euro, particularly against other major currencies, as markets anticipated stronger growth in Germany.

U.S. Dollar (USD)

The U.S. Dollar Index edged up 0.1% to 104.28, staying close to a three-week high as traders awaited new U.S. trade tariffs set to take effect on April 2nd. While concerns over potential disruptions in global trade kept investors cautious, reports suggested a more targeted approach to tariffs. As a result, the Dollar remained within a narrow trading range amid uncertainty about future U.S. trade policies.