Magna Financial Market Report – Wednesday 19th February 2025
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• USD strengthens as Fed maintains rate stance
• GBP mixed on wage growth and inflation concerns
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RECAP
The US dollar closed the day slightly stronger, as Federal Reserve officials Daily and Waller both expressed their belief that US interest rates should remain unchanged until further progress is made on inflation.
In the UK, the pound saw modest support following a report showing stronger-than-expected wage growth in the three months leading to December, suggesting ongoing inflationary pressures. Despite this, Governor Bailey took to the airwaves
yesterday, attempting to downplay expectations for a rise in inflation in the months ahead.
Meanwhile, Canada’s core CPI for January came in higher than anticipated, reaching 2.7% compared to the expected 2.4%, indicating that inflationary pressures continue to challenge the Canadian economy.
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OUR SUMMARY
This morning’s headline CPI exceeded expectations, coming in at 3% year-on-year, surpassing the anticipated 2.8%. However, the services component rose less than expected, which is a positive sign for the Bank of England. Despite this, the GBP has shown a mixed performance, with no clear direction emerging from
the data.
Looking ahead, the day is expected to remain relatively quiet, with the only notable event being the release of the latest FOMC meeting minutes later this evening. However, no significant surprises are anticipated, as key figures like Fed
Chair Powell have already shared their perspectives since the meeting.
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HOW WE CAN HELP
Our team of currency experts are here to help you get more from your money when making international payments. We will work with you to understand your payment needs and offer specialised guidance on the best options available to you. Get in touch with Osman Hanif today on +44 (0) 20 3371 9200 or email osman@magnafinancial.com
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