Swings in the dollar once again dominate conversation with stability largely in place at the start of the week. The BoE and ECB both meet this week with no cuts expected but could differ in timings going forward. US policy uncertainty and plenty of data releases will remain pivotal for broader direction in the week ahead. Read on for more summaries and subscribe for in-depth reports.
Current rates
| Currency pair | Rate |
|---|---|
| gbp usd | 1.3698 |
| eur usd | 1.1857 |
| gbp eur | 1.1551 |
Rates correct as of 12:10pm on Monday 2 February but may now have changed.
The Big 3
A deeper look at the performance of major currency pairs this week. Become a subscriber to receive the full reports.
Dollar volatility eases, with BoE and US jobs data in focus
GBP/USD pushed higher last week as the dollar dived following Trump’s endorsement of dollar weakness. Subsequent reassurance from Treasury Secretary Bessent, a slightly hawkish FOMC tone, and the nomination of Kevin Warsh as the next Fed Chair steadied the ship. This week’s focus shifts to Thursday’s Bank of England meeting, where no rate cut is expected, and Friday’s US Non-Farm Payrolls. Bailey’s guidance on the timing of future cuts will be key for sterling, while any upside surprise in US jobs data could offer the dollar some near-term relief.
EUR/USD retraces as dollar stabilises and ECB stays on hold
EUR/USD briefly surged above 1.20 last week as markets over-reacted to Trump’s comments, before retracing as the dollar found support from a number of factors including pushback from US officials on dollar policy, and Kevin Warsh’s nomination. The ECB is expected to remain firmly on hold this week, with policymakers signalling sensitivity to euro strength, while Friday’s US Non-Farm Payrolls will be the key test for whether the dollar’s recent rebound can extend.
Sterling supported, but policy divergence caps gains
GBP/EUR remains rangebound, with attention firmly on central bank signalling rather than price action. Both the BoE and ECB are expected to hold rates this week, though the MPC vote is likely to be finely balanced once again. Sticky UK inflation keeps the door open to a BoE cut later in the spring, potentially before the ECB, which continues to anchor expectations of a cap on sterling upside versus the euro. For the single currency, Wednesday’s eurozone inflation and Lagarde’s rhetoric will be key, particularly as policymakers show increasing sensitivity to the disinflationary effects of euro strength.
Looking forward
Key dates for your calendar.
- Monday: US Manufacturing PMI.
- Tuesday: US job openings. Reserve Bank of Australia interest rate decision. France CPI.
- Wednesday: Eurozone CPI. US services PMI.
- Thursday: The ECB and the BOE are expected to leave rates unchanged. AUS Balance of trade.
- Friday: US jobs data. Germany balance of trade. Canada jobs data.
Here’s what we’re talking to our clients about
We’re always here to support. Here are some of the conversations we’re having:
- GBP/USD + EUR/USD hitting 4 year highs
- Central Bank activity this week
- Interest rates impact on CFOs
The contents of this article do not constitute financial advice and are provided for general information purposes only. While the content is based on information believed to be accurate at the time of publication, no guarantee is provided.