Weekly Round-Up & The Week Ahead

Weekly round-up and a look at the week ahead for EUR, GBP, and USD.

DAILY ANALYSIS

USD

Last week we saw the FED maintain their interest rate of 4.50% off the back of the US economy still showing uncertainty with data such as retail sales m/m coming out better than previous, but very much below forecast. The US tariffs set to come into effect on the 2nd of April after the 1-month delay. The ongoing peace talk negotiations have resumed in Saudi Arabia with a strong aim at looking to progress ceasefire talks where President Donald Trump has intensified his drive to end the 3-year war after last week speaking directly with President Zelensky and Russian President Vladimir Putin.

This afternoon at 1:45pm GMT time, we will see the US Flash Manufacturing PMI forecasted to come out at 51.9 against a previous 52.7, coupled with the USD Flash services PMI numbers Forecasted at 51.2 against a 51.0. The FED has highlighted the need for more caution and a restrictive approach to their Interest Rate Policy and these numbers could provide additional support to their rhetoric.

EUR

As the European Union look to consolidate with a unified position, and increase spending in defence, they are now very much at the negotiating table when it comes to Trumps Tariffs in retaliation. The EU are now doing all they can to reduce its dependency on Russian energy and look to domestic production. This morning, we witness positive French Flash Manufacturing PMI data coming out at 48.9 versus a previous 45.8, highlighting continued weakness in the industrial sector, this was also seen in the German Manufacturing PMI coming out at 48.3 versus previous 46.5, however it remains deeply in contraction territory. The below-50 readings in both countries indicate shrinking economic activity, with France experiencing sharper declines in its services sector and Germany showing worsening conditions across both manufacturing and services. These figures reflect broader challenges in the Eurozone's largest economies.

GBP

Last week the Bank of England kept its base rate at 4.50%, with a Monetary Policy Committee voting an 8-1 in favour of a rate move, however there is still too much uncertainty around the economy, as inflation is proving to be stubborn at 3%, along with the Tariffs in the US and a downbeat outlook in the EU still a concern. This week, Chancellor Rachel Reeves is set to make her first Spring Statement with it widely expected that tax hikes will be on the table as the government are trying to get the debt under control. This morning, we also had similar numbers for UK Flash Manufacturing PMI data coming out less than forecasted at 44.6 versus 47.3, will also had the UK Flash Services PMI data release coming out at 53.2 against a previous 51.2.

Daily Rates

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