UK: Weekly FX Market Update 17 March 2025
GBP
Last week ended on a sour note for the pound, with monthly GDP falling by 0.1% in January. Is PM Starmer too busy with Ukraine and US tariffs to focus on the UK economy?
The BoE sets rates on Thursday with market analysts expecting no change from the ‘Old Lady’.
If US tariffs and Ukraine peace talks dominate another week, can GBPUSD trade above 1.3000 due to possible further US Dollar weakness?
EUR
President Trump is threatening 200% tariffs on European Union (EU) alcohol exports in response to the EU tariffs of 50% on US whisky.
European Commission Vice-President Kallas says that they have no interest in a trade war but will defend their interests when needed.
German to-be Chancellor Merz has agreed to a deal with the Greens to push through up to Euro 1 trillion worth of defence and infrastructure spending.
USD
The S&P 500 is down 8% from its highs and the Nasdaq is over 10% down, with the Financial Times putting the weakness down to US tariffs.
The US Dollar has weakened around 8% since January as well.
JP Morgan are calling President Trumps tariffs on Canada “economically, politically and geologically illiterate”.
Following both the EU and Canada co-ordinating placing tariffs on the US, will this encourage more US Dollar volatility?
Main events for this week:
Mon Mar 17
12:30 USD Retail Sales
Tues Mar 18
10:00 EUR ZEW Economic Sentiment
12:30 USD Housing Starts/Building Permits
13:15 USD Industrial Production/Capacity Utilization
Wed Mar 19
05:00 JPY Bank of Japan (BoJ) Policy Rate
05:30 JPY BoJ Press Conference
10:00 EUR Final CPI
18:00 USD Federal Reserve Policy Rate
18:30 USD FOMC Press Conference
Thu Mar 20
00:30 AUD Employment Data
07:00 GBP Employment Data
08:30 CHF Swiss National Bank Policy Rate
12:00 GBP Bank of England (BoE) Policy Rate
12:30 GBP BoE Gov Bailey Speaks/Unemployment Claims
14:00 USD Existing Home Sales
Fri Mar 21
07:00 GBP Public Sector Net Borrowing
13:05 USD FOMC Williams Speaks.