Published: 15/05/2025 By ECAP
Gaining Appeal
The British Pound strengthened slightly after UK GDP growth for Q1 beat forecasts, rising 0.7% quarter-on-quarter versus the expected 0.6%. This bolstered GBP, as it suggested economic resilience and reduced pressure on the Bank of England to cut interest rates soon. Ultimately, market sentiment remains cautiously optimistic, with analysts predicting limited further rate cuts in 2025, a scenario supportive of continued Pound strength.
The Euro held its ground during yesterday’s trading session despite limited economic data, with investors focused on upcoming Eurozone releases. Expectations of rising first-quarter employment and stronger March industrial production are supporting sentiment. If confirmed, these indicators would signal improving economic conditions in the bloc, helping to reinforce the Euro’s position and potentially drive further gains as confidence in the Eurozone recovery strengthens.
The U.S. Dollar weakened after April inflation came in below expectations, with core CPI rising just 0.2% month-on-month. This softness increases the likelihood of a Federal Reserve rate cut in Q2. However, uncertainty over future inflation due to potential tariff effects is keeping markets cautious. Ultimately, analysts expect the Fed to maintain a “wait and see” stance, though political pressure for rate cuts may intensify if inflation remains subdued.
Data supplied by GC Partners