Published: 10/03/2025 By ECAP
The British Pound has surged significantly against the Dollar last week, marking its largest weekly gain since November 2022. This upward movement has been fuelled by a broad Dollar selloff, with the Pound moving past key technical levels. However, the rapid rise has left the Pound overbought, suggesting a potential pause or consolidation in the near term. The outlook remains positive, but some short-term pullback is possible.
The Euro rallied against its peers last week, driven by a €500BN infrastructure spending plan in Germany. This plan is expected to boost Germany’s economy, with higher growth forecasts and rising inflation. The market anticipates reduced chances of ECB rate cuts, which supports the Euro. However, the Euro's strength could face challenges if U.S. trade tariffs on the EU are implemented, potentially leading to setbacks.
The U.S. Dollar has been under pressure, mainly due to a broad selloff since early March. Market expectations for U.S. Federal Reserve rate cuts have increased, particularly after recent inflation data. In fact, U.S. CPI for February will be a key focus, with a potential for surprises. Additionally, political uncertainty and tariff concerns, particularly from President Trump, have added to the Dollar's volatility and contributed to its recent decline.
Data supplied by GC Partners