Home Daily Commentaries Stock market losses sees USD gain

Stock market losses sees USD gain

Jake Trask
Written by
Jake Trask

Jake Trask

OFXpert

Based in London, Jake boasts a rich and extensive career in the foreign exchange industry, spanning 15 years.

| Monday 27 January, 2025

Daily Currency Update

Last week saw some solid gains for GBP/USD with it pushing up from 1.2165 on Monday to briefly touch 1.25 on Friday, as UK government borrowing costs continued to ease and some of the alarm over the UK's sluggish economic performance abated. Friday saw the closely watched monthly PMI numbers from the UK with both the Services and Manufacturing survey readings beating estimates. The Services PMI posted 51.2 close to the 50 level that divides expansion and contraction, however, it was higher than the 51.1 posted in December as well as the 50.8 expected.

Some of the doom and gloom scenarios about the UK's economic health may be overdone however, readings far higher than this will be needed to push the economy out of its current malaise. The UK government will be encouraged by comments over the weekend from President Donald Trump where he stated that Prime Minister, Keir Starmer had done "a very good job so far." He has also left the door open to the UK being the destination of his first official foreign trip as President.

GBP/USD has fallen back a little this morning mirroring falls in stock markets around the world as uncertainty over the sustainability of Artificial Intelligence spending spooks the tech sector. GBP/USD is currently at 1.2455.

Key Movers

This week sees interest rate decisions from the worlds two biggest central banks. On Wednesday night, the US Federal Reserve is expected to hold rates at 4.5%, pausing its current cutting cycle. On Thursday, the European Central Bank is expected to cut rates with another 0.25% reduction eyed. The Fed's President, Jay Powell, will be delivering his first remarks under the new Trump administration with it well known that the returning president favours lower rates in an effort to weaken the dollar and help US exporters.

You can expect some uncomfortable questions about this in his press conference after the decision. ECB President Christine Lagarde's thoughts on the eurozone's stuttering economy as well as the new US President will be one to watch after their decision. EUR/USD is currently just under 1.05.

Expected Ranges

  • GBP/USD: 1.2400 - 1.2530 ▼
  • GBP/EUR: 1.1835 - 1.1930 ▼
  • GBP/AUD: 1.9730 - 1.9880 ▲
  • EUR/USD: 1.0430 - 1.0520 ▼

Written by

Jake Trask

OFXpert

As a Senior Corporate Client Manager, Jake and his team manage a diverse portfolio of 250 businesses to meet their varied foreign exchange needs. He enjoys untangling the complexities of foreign exchange dynamics, constantly striving to provide clients with the most informed insights and strategies to navigate these fluctuations successfully.