Key Headlines:

• USD: Softer inflation figures ease pressure on the dollar.
• EUR: Economic downturn concerns weigh on sentiment.
• GBP: Limited movement as markets focus elsewhere

Recap

Currency markets remained relatively stable yesterday, with weaker-than-expected US inflation data offering brief relief amid mounting concerns over the economic impact of trade tariffs. Trump’s newly imposed tariffs on US steel and aluminum imports came into effect, triggering swift retaliatory measures from Canada and threats of counteraction from the EU.

ECB’s Nagel cautioned that these tariffs could push Germany into recession, marking its third consecutive year of economic decline—a first since reunification. France also downgraded its GDP outlook, while major US investment banks trimmed their 2025 growth forecasts. Market focus now shifts to the US Producer Price report, expected to show a slight dip in inflation.

Today’s Rates

Today's Interbank Rates at 09:46 am against GBP movement.

GBP>EUR – 1.1906

GBP>USD – 1.2945

EUR>GBP – 0.8396

EUR>USD – 1.0870

GBP>CAD – 1.8610

GBP>AUD – 2.0594

GBP>SEK – 13.128

GBP>AED – 4.7540

GBP>HKD – 10.060

GBP>ZAR – 23.800

GBP>CHF – 1.1427

GBP>PLN – 4.9985

Today’s Key Takeaways

• Uncertain Policy Outlook: Global growth concerns have left central banks hesitant to provide clear direction on future interest rate moves.
• ECB's Stance: President Lagarde emphasized the need for flexibility, stating the bank cannot give forward guidance but must remain transparent about its response strategy.
• Diverging Opinions: Another ECB official labelled it "irrational" to commit to predetermined rate decisions.
• Bank of Canada Rate Cut: As expected, the BoC lowered interest rates by 0.25% to 2.75%, citing potential economic risks from newly imposed US tariffs.

13^th March 2025

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