UK: Weekly FX Market Update 3 March 2025

GBP

• GBPUSD gained 3% last week. Have we seen a change in the fundamental situation?

• US economic data is showing a possible slowdown for the US economy.

• UK GDP data could be the UK’s economic highlight this week. Can GBPUSD continue higher to the psychological 1.3000 level?

EUR

• Last week, EURUSD gained around 5%.

• The European Commission announced a EUR 800 billion defence fund, while Germany announced a EUR 500 billion infrastructure spend, with fiscal exemptions for defence and security spending.

• With the ECB providing a hawkish cut to interest rates last week, could this restrictive slant to Euro rates, combined with huge spending to come, drag the Eurozone out of its recent period of economic stagnation?

• If so, can EURUSD break 1.1000?

USD

• The Atlanta Fed’s model is showing a -2.4% decline forecast for US GDP in Q1.

• The FT reports that multiple changes to tariff policy are creating uncertainty which ‘can damage investment and, in particular, hurt the economy’.

• The US equity markets are soft and the US Dollar Index lost around 3.5% last week. Will this USD weakness continue?

Main events for this week:

Mon Mar 10

09:30 EUR Sentix Investor Confidence

Tue Mar 11

14:00 USD JOLTS Job Openings

Wed Mar 12

08:45 EUR ECB Lagarde Speaks

12:30 USD CPI

13:45 CAD Bank of Canada (BoC) Int Rate Decision & Statement

14:30 CAD BoC Press Conference

Thu Mar 13

12:30 USD Producer Price Index/Unemployment Claims

Fri Mar 14

07:00 GBP GDP

14:00 USD Prelim UoM Consumer Sentiment/Inflation Expectations