Key Headlines:

• ECB Signals Boost EUR: Optimism around the European Central Bank's policy outlook provides support for the euro.
• USD Under Pressure: A strong Non-Farm Payrolls (NFP) report is crucial to easing the downward pressure on the dollar.

Recap

GBP dropped sharply yesterday following a weaker-than-expected UK construction PMI, which revealed the sector's deepest contraction since May 2020, raising fresh concerns about economic slowdown. Meanwhile, the ECB delivered the expected 0.25% rate cut, but the euro found additional support as policymakers emphasized that rates are now “meaningfully restrictive.” As a result, market expectations have shifted, with only two further ECB rate cuts anticipated this year.

Today’s Rates

Today's Interbank Rates at 09:10 am against GBP movement.

GBP>EUR – 1.1906

GBP>USD – 1.2916

EUR>GBP – 0.8386

EUR>USD – 1.0803

GBP>CAD – 1.8461

GBP>AUD – 2.0443

GBP>SEK – 13.048

GBP>AED – 4.7429

GBP>HKD – 10.038

GBP>ZAR – 23.367

GBP>CHF – 1.1337

GBP>PLN – 4.9699

Today’s Key Takeaways

• Nonfarm Payrolls in Focus: Markets anticipate 160,000 new jobs, with the unemployment rate holding steady at 4%. A significantly strong report may be needed to halt the USD’s recent decline.
• GBP/USD & EUR/USD Holding Gains: Both currency pairs remain near four-month highs as the dollar continues to weaken.
• EUR's Strongest Week Since 2009? The euro has surged, driven by optimism around Germany’s potential fiscal stimulus.
• Technical Indicators Signal Caution: EUR/USD appears overbought, suggesting a possible retracement, while EUR/GBP still has room to climb further.
• GBP/EUR Support Levels: The next key support level for GBP/EUR aligns with January’s lows, indicating potential further downside for GBP.

07^th March 2025

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