Dear Reader,
Today's overview of economic news and market action
- As expected, BoE cut by 25bps to 4.5% yesterday
- However, a dovish surprise in the vote prompted some market reaction
- There was a softening in both UK futures contracts and sterling
- EUR/GBP opens this morning near the midpoint of 83-84p
- Ahead today, attention shifts to the US macro diary
- There is a raft of January labour market data due, including payrolls
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Today's Opening FX Rates
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% Change Day* |
End 2024 |
| EUR/USD |
1.0376 |
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-0.09 |
0.22 |
| EUR/GBP |
0.8343 |
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0.28 |
0.85 |
| GBP/USD |
1.2428 |
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-0.44 |
-0.66 |
| GBP/EUR |
1.1975 |
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-0.28 |
-0.84 |
| *versus Previous Day's European Open |
All rates quoted are indicative market rates.
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BoE Watch: February 2025
The first policy setting meeting of the Bank of England’s Monetary Policy Committee (MPC) for 2025 saw the central bank cut the Bank rate by 25bps to 4.50%. This means that the central bank has now cut by a total of 75bps in its current easing cycle, which began in August of last year.
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AIB Ireland Manufacturing PMI®: January 2025
2025 commenced on a solid note, with the Irish manufacturing sector recording an improvement in operating conditions for the first time in three months. Fresh expansions were noted for both new orders and output. More positively, confidence for the year ahead outlook remained strongly optimistic, with many businesses planning to expand capacity.
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ECB Watch: January 2025
ECB cuts again, with another cut on the cards for March
The first ECB Governing Council policy setting meeting of 2025 saw the central bank cut interest rates. It reduced them by 25bps, with the Deposit rate lowered to 2.75%, while the Re-fi rate was decreased to 2.90%. This marked the fifth 25bps rate cut since the ECB commenced its easing cycle in June of last year. Today’s decision by the ECB to cut rates was unanimous.
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FED Watch: January 2025
Fed in no hurry to cut rates
The first meeting of the US Federal Reserve Open Market Committee (FOMC) for 2025 saw the central bank leave policy on hold. The target range for the Fed funds rate was maintained at 4.25-4.50%. The decision by the FOMC to leave rates unchanged was unanimous and very much in line with market expectations. This was the first time in four meetings that the Fed did not cut interest rates, having previously reduced rates by 100bps over the course of its last three meetings in 2024.
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