🌍 FX Snapshot: Dollar Dips, Sterling Finds Its Feet

The US dollar continues to slide, weighed down by trade tensions and waning investor confidence. Meanwhile, the pound has managed to regain some ground against the euro, bouncing back from levels last seen in December 2023.

Key Headlines:

• 📉 USD Still Under Pressure

Ongoing concerns around US trade policies and economic stability are keeping the greenback on the defensive.

Are you exposed to USD volatility? Could this be a time to consider locking in FX rates?

• 💷 Sterling Rebounds Against the Euro

GBPEUR has recovered from multi-month lows, supported by a softer euro and improving UK sentiment.

Will this trend continue—and how might it impact your euro-based costs or revenues?

Market Recap: 🌐 USD Rebounds, EUR Slips, GBP Steady on Trade Hopes

The US dollar halted its recent slide yesterday, snapping a five-day losing streak thanks to unexpectedly strong manufacturing survey data. This hint of resilience helped steady the greenback, suggesting that parts of the US economy may still be holding up despite broader uncertainties

👉 Could this signal a turning point for USD strength? Are you prepared for a shift in USD direction?

In contrast, the euro came under pressure. The ZEW sentiment survey disappointed, and reports revealed that EU-US trade talks are making little headway. This weighed on EUR, highlighting lingering geopolitical and economic disconnects.

Meanwhile, sterling had a decent session. While UK employment data showed a sharp drop in jobs—78,000 lost in March—investors were more focused on upbeat comments from US Vice President JD Vance, who indicated that a UK-US trade deal could be within reach. This overshadowed concerns about the UK job market, especially in light of rising payroll taxes and a broader slowdown since the autumn.

👉 Is sterling strength sustainable in light of these job cuts and tax changes?

Up in Canada, inflation data underwhelmed, pushing markets to fully price in two interest rate cuts by the Bank of Canada before the end of 2025. This marks a shift toward easing in response to softening economic conditions.

👉 If you deal with CAD, how would a looser monetary policy affect your planning?

🔍 Market Outlook: Inflation Drops, Trade Tensions Rise, and All Eyes on the Fed

The midweek mood across markets is mixed, with inflation data, trade tensions, and central bank expectations all in play.

UK Inflation Dips Further

Consumer price growth slowed more than forecast, with UK CPI falling to 2.6% in March, down from 2.8%—and below the expected 2.7%. This marks the second month of easing and has strengthened expectations of monetary easing.

👉 What does this mean for you? Lower inflation often brings lower interest rates—could your mortgage, loan, or business borrowing costs come down soon?

• Markets now price in 86 basis points of Bank of England rate cuts for 2025, up from 82bp just yesterday.
• A May rate cut (25bp) is now fully priced in by investors.

Global Risk Appetite Cools

Sentiment has taken a hit after Donald Trump barred Nvidia from exporting its H20 AI chips to China, deepening the US-China trade rift.

👉 Do you trade or invest in tech? How might extended chip restrictions affect your exposure to US or Chinese equities?

• Trump is also targeting critical minerals—raising the prospect of broader tariffs.
• Even upbeat Chinese GDP data (Q1 growth at 5.4%) couldn't lift market spirits.

US Retail Sales & Fed in Focus

This afternoon brings the latest US retail sales figures. A disappointing read could fuel concerns about US economic momentum and pressure the dollar further.

👉 Do you rely on USD for payments or contracts? Could a weaker dollar present hedging opportunities?

Later, Fed Chair Jerome Powell is due to speak. Markets will be listening closely, especially as recent Fed rhetoric has prioritized inflation control overgrowth support.

Canadian Rate Decision Incoming

The Bank of Canada is expected to hold rates steady, but after a soft inflation print yesterday, any shift in tone could hint at future rate cuts.

👉 How might dovish signals from Canada affect CAD positioning or trade with Canadian partners?

16th April 2025

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