Last week’s Supreme Court ruling on tariffs is just one of the geopolitical headlines impacting currency markets this week. The euro has found support from resilient German data and a steady ECB stance, though moves remain largely dollar-led as hawkish Fed signals and escalating US tensions with Iran provide dollar strength. Sterling is on the defensive following rising unemployment data and expectations of imminent Bank of England easing.
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Current rates
| Currency pair | Rate |
|---|---|
| gbp usd | 1.3484 |
| eur usd | 1.1779 |
| gbp eur | 1.1447 |
Rates correct as of 12:20pm on Monday 23 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.
Rising UK unemployment sends GBP/USD sharply lower
GBP/USD fell sharply last week as rising unemployment and cooling inflation reinforced expectations that a March BoE rate cut is effectively a done deal. With sentiment toward sterling defensive, much of the pair’s early-year gains have been erased. At the same time, the dollar found support from geopolitical tensions surrounding Iran, tariff developments and increasingly hawkish Fed communication. Dollar dynamics and geopolitical headlines once again drive near term direction rather than domestic fundamentals.
Dollar strength and tariff developments weigh on euro
EUR/USD drifted lower following renewed dollar strength, with hawkish undertones in the latest Fed minutes outweighing solid eurozone data. Speculation around Lagarde’s tenure briefly pressured the euro, though reassuring comments and stronger German PMI and business climate figures helped stabilise sentiment. Tariff rulings, and renewed trade conversations will inject volatility into markets.
By-election test adds fresh political risk to sterling
GBP/EUR drifted lower, with last week’s soft UK labour and inflation data already reinforcing the case for a near-term BoE cut. With that narrative largely priced, focus now shifts to the Gordon and Denton by-election as a potential political flashpoint that could unsettle sterling sentiment again. On the euro side, steady German data and a settled ECB backdrop continue to provide quiet support. In the absence of major releases, relative political stability and rate expectations remain the key drivers, leaving risks tilted toward further euro resilience.
Looking forward
Key dates for your calendar.
- Monday: ECB Lagarde speech. Ifo Business Climate this morning. Fed Waller speech. MPC Taylor speech.
- Tuesday: Trump delivers State of the Union address to Congress.
- Wednesday: GfK Consumer Confidence. Australia CPI.
- Thursday: US unemployment claims. Japan retail sales.
- Friday: German inflation data. GB housing and consumer confidence. US PPI.
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:
- Fed and ECB policy divergence
- AI stocks and analyst’s perceptions
- UK’s fiscal balancing and how well we can stick to the budget
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.