GBP: The British Pound bounced back against major currencies after a sharp decline, driven by tactical factors and sustained by robust UK bond yields, defying the traditionally weak trend for February. Supported by a resurgence in UK bond yields, particularly compared to other major economies, the Pound regained momentum, with the Pound to Euro exchange rate surpassing the 1.17 mark. Analysts attribute this resilience to the UK’s 2-year swap rate outpacing that of other G10 nations, indicating underlying strength.

EUR: Germany’s industrial sector continued to struggle, with industrial output declining more than expected in December, prolonging the downturn. European Central Bank (ECB) executive Isabel Schnabel highlighted the need for patience and caution, noting persistent inflationary pressures and potential supply chain disruptions. Market adjustments to accommodate potential rate cuts indicate a delicate balance for Eurozone policy makers, emphasizing the challenges ahead.

USD: Despite a recent surge following positive labor market data, the US dollar softened slightly, reflecting a nuanced economic picture. Strong ISM services PMI readings and notable improvements in key indicators like new orders and imports suggest underlying resilience in the US economy. However, the Senior Loan Officer Survey (SLOOS) signals potential headwinds, with credit providers showing less reluctance to extend credit. This complexity implies a cautious approach to interest rate adjustments, keeping US yields and the dollar on an uncertain trajectory.