Published: 20/02/2025 By ECAP
The British Pound has maintained its recent strength as the Bank of England takes a cautious approach to interest rate cuts. In fact, investors now anticipate just two rate cuts this year, a shift from earlier expectations. Ultimately, the Pound's strength is supported by ongoing UK interest rate advantages, with inflation pressures keeping the Bank of England cautious.
The Euro held steady, influenced by the possibility of a Ukraine ceasefire. Moreover, the delay in U.S. tariff implementation eased trade concerns, reducing volatility for the Euro. However, upcoming tariffs on steel, aluminium, and other goods in March could shift market sentiment. Despite the tariff postponement, the looming deadlines for trade measures suggest the easing of trade policy concerns may be short-lived.
The U.S. Dollar remained steady, with the Dollar index slightly rising after a recent decline. The stability comes as President Trump’s tariff threats sparked concerns about inflation and its impact on future Federal Reserve rate cuts. Ultimately, investors are awaiting the release of the Fed’s meeting minutes to gain further insights into how these tariffs may affect the central bank's policy decisions and the Dollar's strength.
Data supplied by GC Partners