Published: 06/02/2025 By ECAP
The British Pound faces a potential setback as the Bank of England plans to cut interest rates, with market expectations of a 25-basis point cut and two more in 2025. This dovish stance could weigh on GBP, especially against the Euro and Dollar, as economic growth slows. While short-term volatility is expected, some negative outlooks are already priced in, and the Pound may recover later in February.
The Euro is facing continued weakness due to ongoing European Central Bank rate cuts and economic challenges in the region. This has led to a more pessimistic outlook from many strategists. Moreover, the Euro's struggles are also influenced by uncertainty around trade policies and broader global economic trends. Ultimately, while short-term forecasts remain negative, there is potential for the Euro to recover as economic conditions evolve.
The U.S. Dollar's uptrend has been dampened by the Trump administration's decision to delay tariffs on Canada and Mexico. As a result, the Dollar Index dropped slightly. This has caused investors to reassess their positions amid ongoing trade uncertainty. While the immediate impact has been a pullback, the overall outlook for the dollar remains uncertain, influenced by shifting market conditions and potential future developments.
Data supplied by GC Partners