🌍 Market Snapshot: Currencies on the Move

Despite recent tariff exemptions aimed at calming global tensions, the US dollar continues to weaken, showing that investor sentiment remains fragile. Exemptions may have helped ease trade nerves, but haven’t been enough to revive confidence in USD—why might that be, and how does it impact your cross-border transactions?

Looking ahead, it’s shaping up to be a pivotal week for markets, with key economic releases on the horizon:

• UK Economic Data Drop: From GDP figures to labor market updates—how strong is the UK recovery really?
  

👉 Could this data influence the pound’s next move?

• ECB Meeting in Focus: Investors are watching closely for any shift in tone from the European Central Bank.
  

👉 Will the ECB stay the course, or signal change amid market turbulence?

How could these events affect your FX exposure or international payments? Now’s the time to ensure your strategy is ready.

Market Recap: 💱 Euro Extends Rally, Safe Haven Demand Grows

The euro continued its upward momentum on Friday, pushing EURUSD to its highest level in three years, while GBPEUR fell to lows not seen since December 2023. Although the US dollar clawed back some ground by the European close, US treasury bonds kept sliding—bringing the $29 trillion market toward its worst weekly performance since 2019. This suggests deeper concerns about US fiscal outlook and investor confidence.

Meanwhile, the Swiss franc surged, benefitting from its safe-haven appeal. This drove USDCHF to its lowest level since 2015, and GBPCHF to lows last seen in 2022. With such sharp appreciation, some market watchers are speculating whether the Swiss National Bank might step in to temper the franc’s strength through intervention.

Adding a new twist, Trump over the weekend temporarily excluded certain tech products, like smartphones and computers, from tariffs—a move seen as a short-term easing gesture amid growing trade tension.

🔍 What to Watch This Week

As we head into a shortened trading week (with Good Friday in the UK), the spotlight is firmly on economic data and central bank moves.

Here's what’s driving the markets:

1.   🇬🇧 UK Data Front and Centre

• Jobs report (Tuesday) and inflation data (Wednesday) will be crucial in shaping the Bank of England's next move.
• With a 95% chance of a rate cut priced in for May, how might surprise numbers shift expectations? 👉 Could this impact your mortgage or savings rate?
  

2.   🇪🇺 ECB Rate Cut Expected

• The European Central Bank is likely to trim rates from 2.5% to 2.25%, in line with market consensus.
• But the real focus? Commentary around Trump’s tariff threats and their potential economic fallout. 👉 Will the ECB stay cautious or signal more easing ahead?

3.   🇺🇸 Trump’s Trade Moves Create Noise

• After weekend comments, markets await details on potential semiconductor tariffs from the US.
• Ongoing tariff flip-flopping has left the USD on the back foot, with traders hesitant to take directional bets. 👉 How might this uncertainty affect your international payments or trade plans?
  

4.   📈 Currency Moves

• GBPUSD and EURUSD are holding near recent highs as the dollar struggles for support. 👉 Is this a good time to lock in rates or hedge your currency exposure?
  

14th April 2025

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