Published: 02/04/2025 By ECAP
The British Pound remained steady as markets awaited the impact of upcoming U.S. tariffs. In fact, with minimal UK economic data, the Pound's movement was influenced by broader market sentiment. Looking forward, analysts highlight that April historically favours the Pound due to seasonal trends, with expectations of potential gains. Ultimately, despite risks from trade tensions, investors see a return to stability, suggesting the Pound could benefit from favourable seasonal tailwinds in the coming weeks.
The Euro remained steady against several peers despite a slight drop in Germany's March CPI, which met expectations at 2.2%. Moreover, the European Central Bank’s preferred inflation measures also fell below forecasts, raising bets for future rate cuts. However, the Euro benefited from risk-off market conditions, with traders seeking safe-haven assets. Looking forward, today’s tariff announcement as well as upcoming Eurozone data, including CPI and unemployment, could influence the Euro's outlook further.
The U.S. Dollar gained ahead of President Trump's tariff announcement today, with the Dollar Index rising 0.1%. Investors are bracing for the imposition of reciprocal tariffs, potentially including a 20% duty on all imports. While the Dollar could strengthen if the tariffs are perceived as hawkish, concerns over inflation, stagflation, and a potential U.S. recession are clouding market sentiment. Ultimately, these factors may lead to volatility in the Dollar as Trump's tariff plans take effect.
Data supplied by GC Partners