Trade Policy in Full Focus as Currency Markets Brace.
Markets open the week cautiously as attention shifts to trade policy developments, central bank meetings, and inflation data. The U.S. dollar has edged lower ahead of key announcements, while the euro and British pound are navigating political signals and domestic economic performance.
The U.S. dollar is under pressure as markets anticipate President Trump’s reciprocal tariff announcement due Wednesday. Uncertainty around the scope and scale of the measures has weighed on sentiment, with traders concerned about the broader implications for inflation and consumer demand. The dollar index has softened slightly, reflecting the cautious positioning heading into a potentially pivotal policy update.
The euro is trading slightly higher against the dollar, supported by firm inflation expectations and a pause in ECB rate speculation. Investors are watching for the Eurozone’s inflation print later this week, which could recalibrate expectations around future monetary policy. The region remains sensitive to shifts in global trade flows, particularly in light of U.S. tariff developments.
The British pound remains steady as markets digest the outcome of recent UK–U.S. trade discussions. With services-led economic activity showing resilience, sterling has found a degree of support. The Bank of England’s policy decision on Thursday is unlikely to bring surprises, though the central bank’s tone on inflation and growth will be closely analysed.
Key Data Releases This Week:
Wednesday: U.S. Federal Reserve Interest Rate Decision; Eurozone Core Inflation Rate (February)
Thursday: Bank of England Interest Rate Decision
Friday: Eurozone Inflation Data; UK Consumer Confidence
Currency markets will likely remain sensitive to policy signals and trade headlines throughout the week. If you'd like to speak with our team, please contact us via the details below.
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