Daily Analysis | Clear Treasury

Our daily analysis of EUR, GBP and USD.

DAILY ANALYSIS

USD

The USD weakened off yesterday with the absence of fresh tariff announcements from President Trump reducing the safe-haven demand. The weakness also reflects the fact that expectations for an extended pause in interest rates cuts is being reinforced and linked to rising inflation.
Yesterday we saw any renewed optimism dampened with disappointing US jobless claims data. Initial Jobless Claims rose to 219k, missing the forecast of 215k highlighting the ongoing US labour market challenges the FED has been citing in recent FMOC meetings.
Today will see a busy day on the data front, with Flash Manufacturing PMI expected to come in at 51.3 v a previous 51.2 at 1445 GMT, we will also see the release of the Flash Services PMI also expected to come in at 53.0 v a previous of 52.9.

The Euro Bloc will be looking towards the German election scheduled to be held on Sunday, with major topics to be the talking point of discussion around migration, high energy prices and their stagnating economy, leading towards a hardline fiscal policy to take shape.
This morning has also seen data released with French Flash Manufacturing PMI coming out flat at 45.5, however the French Flash Services PMI coming out lower than expected at 44.5 against a forecast of 48.8.
Germany Flash Manufacturing PMI coming out at 46.1 against a forecast of 45.4 along with the German Flash Services PMI coming in flat at 52.2. These number are still deep in the contraction zone for the economy potentially leading to job and wages cuts heading further into 2025.

This morning saw a rise in Sterling to a two-month high against the USD after UK Retail sales for January came out stronger than expected rising to 1.7% on the month in January after a decline in December.
Figures from the Office for National Statistics recorded a monthly surplus of £15.4bn meaning that the government received more taxes than it spent however tax receipts did rise slower than expected in January in a sign that the poor performance of the economy which could lead to further damaging fiscal policies.
The UK governments involvement in the ongoing peace negotiations is leaving opinions very much divided from the Euro Bloc to Russia and Ukraine, however NATO member states say they will fight together if needed, showing strength in united front against Putin and the Russian aggressor.
This morning the UK will also see the release of their own Flash Manufacturing PMI and Flash Services PMI numbers coming out at 0930 both expected to come in relatively flat, against forecasted.

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