What are the projected interest rate cuts expected by the end of 2025?
The GBP has faced a change in sentiment, driven by recent weak economic data and growing concerns about rising government debt, which have negatively impacted its performance. Despite this, the Pound may be poised for a potential rebound. Analysts suggest that unexpected positive developments, such as stronger economic indicators or hawkish moves by the central bank, could provide support for the Pound in the future.
- Bank Of England: 71 Basis Point cut in 2025 (85% probability of a cut next meeting, 6th of Feb)
The Euro edged higher as an improvement in German business sentiment pointed to a gradual recovery in the Eurozone economy. However, the European Central Bank is anticipated to proceed with further interest rate cuts. Investors are closely monitoring upcoming remarks from ECB President Lagarde, with the Euro expected to remain within a tight trading range.
- European Central Bank: 92 Basis Point cut in 2025 (91% probability of a cut next meeting, 30th of Jan)
The USD gained strength as fears surrounding trade wars and global economic growth heightened its safe-haven appeal. The Dollar Index rose by 0.6%, with market participants closely watching the Federal Reserve’s upcoming policy meeting. Although the Fed is expected to keep interest rates unchanged, its statements on inflation and future rate plans will play a pivotal role in shaping currency market movements in the days ahead.
- Federal Reserve: 49 Basis Point cut in 2025 (99% probability of no change expected at next meeting, 29th of Jan)
