Monthly Currency Report – March 2024

Friday 22nd March– On Friday, the Pound (GBP) retracted towards the end of the previous week following remarks made by Bank of England (BoE) Governor Andrew. Fresh off the heels of the BoE’s dovish interest rate decision earlier in the week, Bailey hinted at the possibility of interest rate cuts being considered at future BoE policy meetings.


Similarly, the Euro (EUR) experienced a decline on Friday amidst growing speculation of a rate cut by the European Central Bank (ECB). This, combined with the pressure exerted by the euro’s negative correlation with the US dollar, outweighed any positive impact stemming from a stronger-than-anticipated increase in German business sentiment this month.

In contrast, the US dollar (USD) concluded the previous week on a positive trajectory as investors tempered their expectations regarding the number of interest rate cuts that the Federal Reserve might implement this year. However, the increase in USD exchange rates was tempered by a decline in US Treasury yields, which limited the currency’s upside potential.

Thursday 21st March

Yesterday witnessed a slump in the pound (GBP) as the market interpreted the Bank of England’s (BoE) latest interest rate decision as dovish. Notably, two of the most hawkish policy makers at the bank, who had previously advocated for a rate hike, shifted their stance. This perceived move towards forthcoming rate cuts weighed heavily on Sterling.

Meanwhile, the euro (EUR) grappled with conflicting influences on Thursday, making it challenging to discern a clear direction for the common currency. While a stronger-than-expected services PMI provided some support for the EUR, the looming possibility of European Central Bank (ECB) rate cuts and a resurgence in the US dollar (USD) acted as headwinds, dampening enthusiasm for the euro.

In contrast, the US dollar managed to claw back some of the substantial losses it incurred following the Federal Reserve’s interest rate decision on Wednesday evening. The currency appeared to have entered oversold territory, prompting a modest recovery. Additionally, lower-than-anticipated US jobless claims provided further support for the ‘greenback’.

Wednesday 20th March

Pressure mounted on the Pound (GBP) yesterday following a cooler-than-expected UK inflation report, sparking speculation of a more aggressive pace of policy easing by the Bank of England (BoE). Despite this, Sterling displayed unexpected resilience, managing to hold its own against some of its weaker counterparts.

The Euro (EUR) witnessed a decline on Wednesday amidst increasing speculation regarding a series of rate cuts from the European Central Bank (ECB) throughout the year. Heightening rate cut expectations were fueled by a larger-than-anticipated drop in German producer price inflation, alongside remarks from ECB President Christine Lagarde, strongly hinting at an impending shift in the bank’s policy stance.

Meanwhile, the US Dollar (USD) experienced a sharp decline yesterday evening following the Federal Reserve’s latest interest rate decision. While the decision to leave rates unchanged was widely anticipated, Fed Chair Jerome Powell’s remarks indicating that a robust US labour market might not deter the central bank from lowering interest rates sent the USD tumbling.

Tuesday 19th March

Tuesday saw the Pound (GBP) experiencing fluctuations, attributed to the ongoing absence of fresh UK economic data, leaving the currency susceptible to market volatility. Sterling grappled with uncertainty, with investors eagerly anticipating today’s release of the consumer price index and tomorrow’s Bank of England (BoE) decision.

In contrast, the Euro (EUR) dipped against numerous counterparts yesterday following the release of Germany’s latest economic sentiment index, which fueled speculation regarding potential European Central Bank (ECB) interest rate cuts. Despite a notable improvement in the index, driven by investor anticipation of the ECB’s policy normalisation, the data ultimately exerted downward pressure on the common currency.

Initially, the US Dollar (USD) demonstrated strength yesterday, reaching a two-week peak, before surrendering its gains. The reversal coincided with an improvement in market sentiment and a slight decline in US Treasury yields.

Monday 18th March

Monday witnessed the Pound (GBP) wavering aimlessly as the absence of fresh UK economic data left Sterling drifting without a clear direction. Moreover, GBP investors remained cautious, refraining from making significant adjustments to their positions in anticipation of tomorrow’s consumer price index release and Thursday’s Bank of England (BoE) interest rate decision.

Conversely, the Euro (EUR) encountered some downward pressure at the outset of the week following remarks made by European Central Bank (ECB) policymaker Pablo Hernandez de Cos over the weekend. De Cos suggested the possibility of the bank initiating interest rate cuts as early as June, thereby dampening the appeal of the EUR.

Following a lacklustre morning, the US Dollar (USD) managed to eke out modest gains yesterday afternoon as US Treasury yields surged to their highest level in nearly a month. Nevertheless, a cautiously optimistic market sentiment and the impending Federal Reserve interest rate decision served to constrain the extent of the USD’s upward movement.

Friday 15th March– The Pound (GBP) displayed a softened stance against various currencies due to a dearth of GBP-related data, leaving it susceptible to potential losses. Moreover, a recent survey conducted by the Bank of England (BoE) unveiled a decline in consumer inflation expectations in the UK to a three-year low, heightening speculation about a potential earlier interest rate cut.

In contrast, the Euro (EUR) experienced modest gains on Friday, edging higher against its weaker counterparts amidst a subdued market sentiment. Nonetheless, the Euro’s upward momentum was curbed by dovish remarks from policymakers at the European Central Bank (ECB).

Meanwhile, the US Dollar (USD) maintained its robust position on Friday, retaining the gains it had accrued over the course of the week. Despite a sombre market atmosphere, the safe-haven status of the ‘Greenback’ persisted, although a dip in US consumer sentiment hindered further upward movement.

Thursday 14th March

The Pound (GBP) meandered aimlessly in the market as the absence of significant UK data left the currency adrift. While Sterling managed to claw back some of its recent losses against certain weaker counterparts, it struggled to maintain its position elsewhere.

The Euro (EUR) encountered stumbling blocks on Thursday following dovish remarks from a policymaker at the European Central Bank (ECB). Yannis Stournaras of the ECB advocated for an imminent rate cut, casting a shadow over EUR exchange rates.

However, the US Dollar (USD) surged ahead on Thursday fueled by robust economic indicators. A resurgence in US retail sales and a decrease in jobless claims bolstered the ‘Greenback’, along with better-than-expected US PPI figures indicating a surge in producer prices last month. The display of economic vigour and mounting prices prompted market participants to temper their expectations of a June rate cut from the Federal Reserve, thereby bolstering the strength of the US

Wednesday 13th March

The Pound (GBP) displayed hesitation in its trajectory despite the release of new UK GDP data indicating a recovery in January. Although the headline GDP figure suggested a resurgence in economic activity at the outset of the year, underlying vulnerabilities within the British economy exerted downward pressure on the Pound.

The Euro (EUR) managed to carve out some gains on Wednesday, despite a notable 3.2% decline in Eurozone industrial production in January. This modest uptick occurred against a backdrop of risk aversion in the market and weakness in the US Dollar (USD), with which the Euro shares a negative correlation.

Meanwhile, the US Dollar faced challenges on Wednesday, slipping against its more robust counterparts as a cautious sentiment failed to provide support for the safe-haven currency. Persistent speculation regarding a potential rate cut from the Federal Reserve in June, despite Tuesday’s higher-than-expected inflation reading, acted as a drag on the ‘Greenback’.

Tuesday 12th March

The Pound (GBP) encountered setbacks as weaker-than-anticipated UK jobs data intensified speculations of a potential interest rate cut by the Bank of England (BoE). Sluggish wage growth combined with an unexpected uptick in unemployment bolstered expectations for a BoE rate reduction, possibly as soon as June.

Despite confirmation of a significant deceleration in German inflation, the Euro (EUR) faced limitations in its movement yesterday. However, as the final figures aligned with preliminary estimates, EUR investors largely disregarded the data, sparing the single currency from significant losses.

In contrast, the US Dollar (USD) exhibited strength on Tuesday following the release of the latest US consumer price index, which surpassed expectations. Headline inflation in the US unexpectedly rose last month, while core inflation moderated less than anticipated. Consequently, investors scaled back their expectations of a June rate cut from the Federal Reserve.

Monday 11th March

The Pound (GBP) initiated this week’s trading session by relinquishing some of its gains from the previous week due to a dearth of fresh UK data. With little to spur confidence among GBP investors, Sterling retreated against a multitude of its counterparts.

It was a similar start for the Euro (EUR) maintained a subdued stance on Monday as the currency markets experienced a tranquil beginning to the week. With scant economic data available and high-impact releases on the horizon, investors exercised caution in committing to significant positions.

Meanwhile, the US Dollar (USD) demonstrated strength on Monday, recovering a portion of its losses from the previous week, buoyed by a risk-averse market sentiment that favoured the appeal of the safe-haven currency. However, USD investors approached the market with prudence, refraining from making substantial adjustments to their positions ahead of the impending release of the consumer price index, which ultimately restrained the US Dollar’s potential for further upside.

Friday 8th March

The Pound (GBP) surged at the close of last week’s trading session, reaching multi-month highs against select currencies, buoyed by an optimistic market sentiment favouring riskier assets. Moreover, Sterling benefited from anticipated policy divergence between the Bank of England (BoE) and other central banks. Speculation arose that the BoE might delay interest rate cuts compared to its counterparts.

The Euro (EUR) encountered selling pressure on Friday, despite a respectable rebound in German industrial production in January. The downside stemmed from hints by some European Central Bank (ECB) policymakers regarding a potential rate cut in April. Nonetheless, the EUR managed to recover some losses, aided by its strong negative correlation with the tumbling US Dollar (USD).

The US Dollar experienced a notable decline on Friday, hitting a two-month low, following the release of the latest American labour market data, which fueled expectations of Federal Reserve interest rate cuts. Although February’s non-farm payrolls exceeded expectations, the January figure was significantly revised downwards. Additionally, US unemployment unexpectedly rose to a two-year high of 3.9%. These developments led to increased market expectations for a more aggressive Fed policy easing pace.

Thursday 7th March

The Pound (GBP) struggled to find a clear direction on Thursday due to a lack of significant UK economic data, exposing the currency to market volatility. Despite this, Sterling managed to strengthen against safer currencies while weakening against riskier counterparts amidst an improved market sentiment.

The Euro (EUR) witnessed volatility on Thursday, initially declining and then rebounding following the European Central Bank’s (ECB) latest policy decision. Despite leaving interest rates unchanged, the ECB slashed its inflation forecasts, leading to EUR depreciation. However, the common currency recovered ground as ECB President Christine Lagarde appeared to rule out an April rate cut.

The US Dollar (USD) depreciated to a fresh one-month low on Thursday amid a risk-on sentiment prevailing in the markets, which diminished demand for the safe-haven currency. Additionally, higher-than-anticipated US jobless claims further weighed on the USD, sparking speculation of a slowing labour market.

Wednesday 6th March

The Pound (GBP) faced challenges on Wednesday as the UK currency struggled against stronger counterparts, following Chancellor Jeremy Hunt’s announcement of the Spring Budget. Despite measures aimed at boosting growth, the Office for Budget Responsibility (OBR) forecasted UK inflation to fall below 2% within a few months, raising expectations of Bank of England (BoE) interest rate cuts.

The Euro (EUR) gained ground on Wednesday after unexpectedly robust trade figures from Germany fostered optimism for the Eurozone’s largest economy. Furthermore, the EUR benefited from its inverse correlation with the US Dollar (USD) as the latter faced considerable selling pressure.

The US Dollar experienced a sharp decline on Wednesday, driven by lower US Treasury bond yields and a risk-on sentiment in the market. Additionally, an unexpected drop in US job openings in January, coupled with Federal Reserve Chair Jerome Powell’s confirmation of anticipated interest rate cuts this year, further pressured the currency.

Tuesday 5th March

The Pound (GBP) had a subdued start on Tuesday following a downward revision of the UK’s final services PMI, indicating a slowdown in activity the previous month. Nevertheless, the increasingly risk-sensitive GBP managed to surge against safer currencies later in the day amidst an improved market sentiment.

The Euro (EUR) faced mixed movements on Tuesday as divergent data releases pulled the currency in different directions. While the Eurozone’s final services PMI was revised upwards, producer price inflation in the bloc fell more than expected in January, heightening expectations of interest rate cuts by the European Central Bank (ECB).

The US Dollar plummeted on Tuesday following a lower-than-expected reading of the ISM services PMI. The survey recorded 52.6 in February, below forecasts of 53 and down from 53.4, signalling a more significant than anticipated slowdown in the service sector, which rattled USD investors.

Monday 4th March

The Pound (GBP) saw gains during Monday’s trading session as Chancellor Jeremy Hunt unveiled investment plans ahead of his Spring Budget. Hunt announced £360m in funding for the UK manufacturing industry as part of the Treasury’s efforts to stimulate growth in the British economy.

The Euro (EUR) managed to edge higher against weaker counterparts on Monday but struggled to make significant gains elsewhere due to a lack of economic data from the Eurozone, which limited the currency’s potential. Additionally, EUR investors likely hesitated to adjust their positions ahead of the European Central Bank’s (ECB) interest rate decision later in the week.

The US Dollar weakened against stronger rivals on Monday as a dearth of US economic data left the currency without substantial support. Nevertheless, the safe-haven USD strengthened against riskier counterparts amid cautious investor sentiment.

Currency Ranges for the month:

GBP/USD: Low:   High:

GBP/EUR: Low:   High:

EUR/USD: Low:   High:



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