Currency news / February 12, 2025

USD correction to continue?

3 min read Thanim Islam

Thanim IslamFebruary 12, 2025

Market snapshot:

USD weakens on tariff retaliation talk from Europe and Canada
US CPI key today

Yesterday's currency recap

Federal Reserve (Fed) Chair Powell's testimony to the Senate Banking Committee failed to give USD a boost despite comments stating they are in no hurry to cut interest rates and affirmed their patient easing approach. So more than anything, the USD weakness looks like a technical pullback. Current market expectations suggest an anticipated rate cut by the Fed is on the horizon for September. Earlier today, the EUR showed resilience as the EU pledged decisive actions against any US-imposed tariffs, with Canada echoing this strong stance.

Today's GBP rates

Currency pair	Daily move*	Indicative rate**
GBPAUD	0.14%	1.9730
GBPCAD	0.37%	1.7770
GBPCHF	0.57%	1.1335
GBPDKK	0.02%	8.9524
GBPEUR	0.02%	1.2003
GBPJPY	0.62%	189.1680
GBPNOK	0.30%	13.9122
GBPNZD	0.13%	2.1954
GBPSEK	-0.13%	13.4956
GBPUSD	0.40%	1.2420

*Daily move - against G10rates at 7:30am, 12.02.25
** Indicative rates - interbank rates at 7:30am, 12.02.25

Key data points

Currency	Event	Period	Consensus	Previous
USD	CPI MoM	Jan	0.30%	0.40%
USD	CPI YoY	Jan	2.90%	2.90%
USD	Core CPI MoM	Jan	0.30%	0.20%
USD	Core CPI YoY	Jan	3.10%	3.20%

Speeches

GBP: BoE Greene
EUR: ECB Nagel
USD: Fed Bostic Waller

What we think

US CPI is the key data point for USD today, and, given markets are riding a narrative that US inflation is expected to remain elevated due to tariff risks, we feel a miss to the downside will have a greater impact on the currency. So a miss on CPI and we could see markets call upon an earlier rate cut than September, which should weaken USD further. Higher CPI numbers and rising yields and we will likely see gains on USD.

Risk sentiment is slightly higher today after Donald Trump hinted at progress in peace efforts between Russia and Ukraine following the release of an American teacher from a Russian detention centre. So GBPUSD and EURUSD is continuing yesterday's upwards moves.

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