Currency news / February 21, 2025

USD correction to continue?

3 min read Thanim Islam

Thanim IslamFebruary 21, 2025

Market snapshot:

UK retail sales add to strong UK data
EUR could be weak ahead of German elections

Yesterday's currency recap

The USD correction continued yesterday following on from the prospect of a US-China deal and softer US data.

This morning, UK retail sales for January came in better than expected at 1.7% - a jump from 0.6% drop in sales in December. This was a bit surprise but the numbers add to the strong data from the UK across this whole week.

Today's GBP rates

Currency pair	Daily move*	Indicative rate**
GBPAUD	-0.35%	1.9768
GBPCAD	0.07%	1.7929
GBPCHF	-0.01%	1.1385
GBPDKK	0.00%	9.0071
GBPEUR	0.00%	1.2076
GBPJPY	-0.78%	189.1760
GBPNOK	0.27%	14.0563
GBPNZD	-0.43%	2.1964
GBPSEK	-0.18%	13.4763
GBPUSD	0.40%	1.2638

*Daily move - against G10 rates at 7:30am, 21.02.25
** Indicative rates - interbank rates at 7:30am, 21.02.25

Key data points

Currency	Event	Period	Consensus	Previous
EUR	Manufacturing PMI	Feb	47.00	46.60
EUR	Services PMI	Feb	51.50	51.30
EUR	Composite PMI	Feb	50.50	50.20
GBP	Manufacturing PMI	Feb	48.50	48.30
GBP	Services PMI	Feb	50.80	50.80
GBP	Composite PMI	Feb	50.60	50.60
USD	Manufacturing PMI	Feb	51.40	51.20
USD	Services PMI	Feb	53.00	52.90
USD	Composite PMI	Feb	53.20	52.70

What we think

PMI day with the release of the manufacturing and services numbers from the UK, EU and US to give us a gauge of how each economy is performing this month. However, whilst these data points will have an impact on FX, the underlying narrative in markets is one of how much more this correction on USD will continue.

We wouldn’t be surprised if there was a bit more in this move with the potential for both GBPUSD and EURUSD to hit the highs seen in December. It's also worth adding that there could be some nervousness on the EUR today ahead of the German elections on Sunday. Therefore we wouldn’t be surprised to see the currency weaker as we finish this week.

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