Yesterday afternoon, demand for the dollar picked up after services PMIs came in much higher than expected. The manufacturing segment slipped back into contraction territory but the overall composite number was better than expected.
In the UK, we witnessed a parallel trend as market expectations for rate cuts eased by 3 basis points, while Europe's figures didn't quite meet the anticipated rise.
As a result, EURUSD slipped to a three-week low. Overall market sentiment was positive following on from the Trump administration's comments on the weekend that tariffs will likely be more targeted than previously threatened.
The Federal Reserve's (Fed) Bostic spoke in the evening as well, pushing back against markets pricing on rate cuts, suggesting he only sees one more rate cut his year as he doesn’t expect inflation to come down as quickly as he hoped.
*Daily move - against G10 rates at 7:30am, 25.03.25
** Indicative rates - interbank rates at 7:30am, 25.03.25
The euro is weaker to start the morning ahead of German IFO numbers at 9am. An upside surprise should ease some of these early losses.
Away from data, Ukrainian and US teams are set to be holding more talks in Saudi Arabia to discuss a 30-day energy and Black Sea ceasefire in the war with Russia.
Client appetite for dollars has increased over the last week in light of the dollar being at its weakest value since November.
Our team of currency experts are here to help you get more from your money when making international payments. We will work with you to understand your payment needs and offer specialised guidance on the best options available to you. Over the last 19 years we’ve helped over a million customers and last year alone processed over £12bn. We’re tried and trusted, and we’re ready to help you.
Have a great day.
