Magna Financial Market Report – Monday 17th February 2025
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• Putin and Trump scheduled for a meeting this week
• GBP under the spotlight with key UK data releases
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RECAP
The week concluded with further USD selling, alongside an unexpected 0.8% year-on-year decline in January retail sales. In response, markets adjusted their interest rate projections to reflect the pre-Wednesday CPI data. This led to a shift, with a 60% probability now assigned to a second rate cut, which is expected to occur in September—three months earlier than initially forecasted.
For the second consecutive week, both EURUSD and GBPUSD maintained their upward momentum.
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OUR SUMMARY
This week, the UK takes center stage with key data releases, including job numbers on Tuesday, CPI on Wednesday, and retail sales on Friday. Job figures pose the most significant risk to GBP, especially after recent comments from the Bank of England. While CPI is expected to rise—supporting GBP—markets have already scaled back the anticipated rate cuts for the year, which could mean any CPI increase is already priced in. The disappointing GDP data from last week, showing weak household spending in Q4, raises concerns that Friday’s retail sales numbers could also be underwhelming if January’s trend continues.
In the US, the FOMC minutes on Wednesday will provide crucial insights. Alongside this, ongoing discussions about a potential ceasefire in the Russia/Ukraine conflict may lead to a softer USD, as risk appetite increases. US and Russian officials are scheduled to meet in Saudi Arabia this week.
For the euro, attention is on the upcoming German elections. A delay in forming a coalition government could weigh on EUR performance.
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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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