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6th March

Top Currency Pairs Monday 6th March 04:00 UTC GBP/USD: 1.20452 (Last Week: 1.19457) EUR/USD: 1.06467 (Last Week: 1.05454) GBP/EUR: 1.13136 (Last Week: 1.13279)

Market News

Pound Sterling The British Pound managed to hold its ground last week as Britain's economy is showing slightly more momentum than expected. That said, potential headwinds still remain as Britain is the only G7 economy that is still smaller than before the coronavirus pandemic. In fact, the International Monetary Fund believes it will be the only G7 economy to shrink this year. Looking forward, the U.K. is to publish GDP data on Friday showing how the economy fared in January after narrowly avoiding falling into a recession in the final three months of 2022. Ultimately, economists are expecting gross domestic product to have expanded by just 0.1% in January from the prior month. Moreover, the BOE might now have to keep raising rates, as consumers appear to be holding up in the face of double-digit inflation.

Euro The Euro is expected to see additional volatility today as EU Retail Sales are released, providing the market insight on Eurozone consumer spending. The ECB’s Philip Lane’s speech will also be a primary focus as investors monitor ECB member speeches following last Thursday’s policy meeting minutes. The EUR opened stronger against the US Dollar this morning as the currency pair aims to target 1.07 after EU PMI data missed last week’s estimates. The Euro also opened stronger against Pound Sterling as continental economic figures and the ECB interest rate stance are both still hawkish. ECB President Lagarde confirmed this in an interview this weekend stating “I cannot tell you how high rates will go. I know that they will be higher than they are now and we still have more work to do”.

U.S. Dollar The U.S. dollar was broadly lower this morning as investors awaited testimony from Federal Reserve Chair Jerome Powell and looked towards the February jobs report at the end of the week that will likely influence how hawkish the U.S. central bank will be. In fact, the dollar index was down at 104.56, but not far off a seven-week high of touched last week. After delivering jumbo hikes last year, the Fed has raised interest rates by 25-basis points in its latest two meetings, but a slew of resilient economic data has stoked market fears that the central bank might return to its aggressive path. Ultimately, the spotlight will be firmly on the February jobs report scheduled for Friday and Fed Chair Jerome Powell's testimony to congress on Tuesday and Wednesday.

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