Pound Sterling (GBP)

Sterling is gaining strength, driven by the Bank of England’s more aggressive approach to monetary policy. Although it initially faced pressure due to a downgraded UK growth forecast, the Pound rebounded after the BoE decided to pause its rate-cutting cycle. Moving forward, key UK economic reports—such as inflation data and government statements—will be crucial in determining its trajectory.

Euro (EUR)

The Euro is under pressure due to renewed fears of a potential trade conflict between the EU and the US, which could slow Eurozone growth. Additionally, Germany’s economic outlook remains a key factor, with upcoming data like the Ifo business climate index influencing sentiment. Other critical indicators, such as PMI reports, will also help shape the Euro’s direction, particularly as private sector activity shows signs of weakening.

U.S. Dollar (USD)

The Dollar remains stable, with its future movement depending on upcoming economic reports, including final Q4 2024 GDP figures and the core PCE price index. A slowdown in U.S. economic growth could weaken the Dollar, while rising inflation might provide support. Overall, market sentiment and the Federal Reserve’s policy stance will be key factors in determining how the Dollar performs in the week ahead.