Market Insight 24-01-2025

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  • Market Insight 24-01-2025

GBP/EUR

  • Summary: GBPEUR is trading near 1.1820, falling after recent gains. While the Euro benefits from improved risk sentiment, expectations of ECB rate cuts weigh on its gains. Meanwhile, weaker UK economic data has strengthened market anticipation of a Bank of England rate cut in February.
  • Outlook: The PMI data from both regions will play a key role in determining short-term movement. A softer UK PMI could limit GBP gains, while weaker Eurozone figures might cap the Euro’s strength.

GBP/USD

  • Summary: GBP/USD reached a fresh two-week high above 1.2400 as the US Dollar weakened on President Trump’s push for rate cuts and weaker US Treasury yields. The Pound’s rally comes despite a challenging UK economic backdrop.
  • Outlook: PMI data from the UK and US will provide further direction. With the Fed expected to maintain its current policy stance, the Dollar could face further downside pressure, offering support to GBP/USD.

EUR/USD

  • Summary: EUR/USD climbed above 1.0450, supported by US Dollar weakness and expectations of continued ECB rate cuts. However, uncertainty around the Eurozone’s economic outlook continues to limit the Euro’s upside.
  • Outlook: The release of PMI data for the Eurozone and the US will be closely monitored. The Euro may face resistance if economic data points to slower growth in the Eurozone.

AUD/USD

  • Summary: AUD/USD surged to a one-month high above 0.6300, benefiting from USD weakness and improved risk sentiment. Trump’s optimistic comments on a potential trade deal with China also bolstered the Australian Dollar.
  • Outlook: Market focus will shift to US PMI data later today and China’s official PMI readings on Monday. Continued positive sentiment could support further gains for the Australian Dollar.

USD/CAD

  • Summary: USD/CAD dropped to 1.4330 as the Canadian Dollar gained from stronger crude oil prices and US Dollar weakness. Trump’s comments regarding oil production and tariffs added further pressure on the USD.
  • Outlook: Crude oil price trends and US PMI data will influence the pair. The Canadian Dollar is likely to maintain strength if risk sentiment improves further.

Final Summary

The markets are poised for volatility with PMI data releases from key economies driving short-term movements. The US Dollar struggles under the weight of political and economic pressures.