A positive start to the week for sterling saw it tread water against the euro and advance by 0.5% against the US dollar. As of this morning, GBP/USD reached its highest level since the initial aftermath of the US election back in early November of last year.
The euro continued to perform well, advancing by half a cent over the US dollar. In fact, EUR/USD has climbed by the best part of 5% in just under a month, underscoring the pace and intensity of the European fightback.
Monday was a quieter day for European data but that changes quickly. This morning’s German ZEW economic sentiment index is expected to have recorded a sizeable jump in March and the euro’s direction today is likely to depend (at least in part) on that result.
The UK must wait until Thursday for the most impactful events. However, with Thursday featuring both unemployment data and an increasingly crucial Bank of England rate decision, volatility is sure to lie ahead for the pound.
US retails sales increased by 0.2% month-on-month in February. That was still well below the level economists had predicted although significantly better than the 1.2% fall from January.
A panel of US academics think that Donald Trump’s government cuts and trade tariffs will slow growth and cause inflation. The results of the survey, published in the Financial Times, come hot on the heels of significant volatility in American markets, fuelled in large part by uncertainty as to Trump’s next moves.
In geopolitics, Israel launched a significant wave of airstrikes against Palestine last night, reportedly killing hundreds.
Meanwhile, Donald Trump said he would discuss issues including power infrastructure in a discussion with Russian president Vladimir Putin later today.
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