GBP, USD, and EUR Trends Deciphered.

  • GBP fluctuated against peers, buoyed by anticipation of a speech from BoE’s Catherine Mann, known for hawkish views.
  • USD slightly weakened post-revision of Q4 GDP, despite ongoing robust economic activity, as market sentiment turned risk-averse.
  • EUR saw Germany’s retail sales decline in January, signaling economic slowdown, while ECB policymakers discussed maintaining a “floor” system for interest rates.
  • Mann’s speech and UK manufacturing PMI release likely to impact GBP exchange rates.
  • Market anticipates Fed to maintain interest rates unchanged, supporting USD, while ECB’s plans may influence EUR trends.

GBP: The Pound (GBP) experienced fluctuations against various currencies on Wednesday. It showed strength against some risk-sensitive peers but weakness against others. The anticipation of a speech from Bank of England (BoE) policymaker Catherine Mann added to the market’s uncertainty. Mann, known for her hawkish views, could advocate for tighter monetary policies, potentially reducing speculation about rate cuts and bolstering Sterling. Additionally, the upcoming release of UK manufacturing PMI figures could sway GBP exchange rates, especially if the data confirms continued contraction in the sector.

USD: The US Dollar (USD) witnessed a slight retreat on Wednesday following the release of revised fourth-quarter GDP data. Although the economy still showed robust growth, the downward revision tempered the Dollar’s strength. However, amidst risk-averse trading, the Greenback capitalized on its safe-haven status, gaining ground against riskier assets. Market expectations of the Federal Reserve keeping interest rates unchanged further supported the Dollar’s position.

EUR: Germany’s Retail Sales disappointed expectations, signaling a slowdown in January compared to December. Despite this, the Eurozone’s largest economy saw a smaller year-on-year decline, slightly above forecasts. Reports from the European Central Bank (ECB) highlighted a consensus on maintaining a “floor” system for interest rates, with commercial banks playing a role in determining liquidity. The ECB’s adjustments in its cash auctions and tolerance for fluctuations in the Euro Short-Term Rate aim to provide clarity to the market and potentially influence Euro trends in the upcoming months.

*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time. CentralFX are not responsible for the rates shown.