Pound firms amid improving UK economic outlook
Philip McHugh January 28th 2025 - 2 minute read
Pound (GBP) buoyed by UK economic optimism
The pound (GBP) got off to a positive start this week, rising amid renewed optimism that the UK government will be able to boost growth by revising planning rules.
The upside in Sterling came despite Morgan Stanley cutting its UK growth forecast for 2025 from 1.3% to 0.9%.
With UK data in short supply today, the pound may be left at the mercy of wider market trends. A cautious mood could see the currency relinquish some of its recent gains.
Euro (EUR) firms as German business sentiment improves
The euro (EUR) trended broadly higher on Monday, on the back of surprisingly positive German economic data.
The latest IFO business climate index reported that business sentiment unexpectedly improved this month, against forecasts it would have held at its worst levels since the start of the COVID pandemic.
EUR investors will look to a speech by European Central Bank (ECB) President Christine Lagarde for fresh impetus today. A dovish tone could drag on the euro ahead of the bank’s interest rate decision on Thursday.
US dollar (USD) slips as Trump tariff fears wane
Trade in the US dollar (USD) was choppy at the start of this week, with the currency’s initial gains evaporating as President Trump reversed course on his decision to slap heavy tariffs on Colombia.
USD investors also seemed reluctant to make any aggressive bets ahead of the Federal Reserve’s upcoming interest rate decision.
Coming up, the US will publish its latest durable goods orders data later today. If order growth rebounded as forecast last month, it could bolster the ‘greenback’.
Canadian dollar (CAD) undermined by falling oil prices
The Canadian dollar (CAD) faced resistance on Monday as the appeal of the commodity-linked currency was weakened by a softening of oil prices.
In the absence of any notable domestic data, the ‘loonie’ may remain sensitive to oil price dynamics today.
Australian dollar (AUD) dented by disappointing business confidence data
The Australian dollar (AUD) slipped overnight on Monday as Australia’s latest business confidence index remained in negative territory for the second consecutive month.
New Zealand dollar (NZD) pressured by weaker risk appetite
The New Zealand dollar (NZD) also trended lower in overnight trade as renewed USD demand sapped market risk appetite.
Never miss a movement. Create a free account with Currencies Direct to get the latest currency news delivered straight to your inbox. You can also set up rate alerts and check live rates 24/7.
Written by
Philip McHugh