Ten-Week High for GBP against USD and Euro: Sterling Update

Here’s the latest currency news from our partner Moneycorp, to help you find out what your money is worth.

GBP

The pound remained well-supported against its peers last week, hitting ten-week highs against both the US dollar and the euro on Thursday.

Sterling’s strength can mainly be attributed to better-than-expected UK economic data for the month of February. This upturn has eased pressure on the pound. Additionally, a more risk-on mood in the markets has led to fewer safe-haven flows into the USD as investors look to other prospects. Divergence from interest rate forecasts between the UK and the EU have also played a role in this shift.

EUR

The speculation of the US tariffs on the EU made impacts on the euro last week Despite this, there has been an overall uptick against the Dollar in February, climbing from lows of 1.0203 to a high of 1.0528 before retracting back to below 1.04.

This is partially because data feeds in the Eurozone have been slightly stronger, but USD weakness over the past month has been the key driver in the euro’s recovery. However, the proposal of US tariffs have the potential to impact Central Europe, with one analyst suggesting a 25% US tariff could restrict GDP growth in the CEE by up to 0.5%.

The focus for the week ahead will be on the European Central Bank meeting on Thursday, where another 25 basis points of cuts are widely anticipated, bringing the deposit and refinancing rates to 2.5% and 2.65% respectively. The press conference and meeting statements from ECB President Christine Lagarde will be closely watched for any hints on future policy direction.