By Noam Bennaiche
Yesterday, the US dollar moved modestly higher against major peers after stronger-than-expected US labour market data. It went from 208k to 212k jobs, and was expected at 217k. This supported the greenback and eased concerns about near-term economic weakness. While geopolitical tensions and trade discussions continue to create volatility, the resilience in employment figures reinforced expectations that the Federal Reserve may not rush into aggressive rate cuts. As a result, the dollar traded on a steadier footing compared with recent sessions.
The British pound softened slightly against the US dollar, with GBP/USD holding around the 1.3520–1.3550 region. Sterling has come under pressure amid rising expectations that the Bank of England could cut rates in March following softer UK inflation data. Political uncertainty ahead of the Manchester by-election has also added caution to GBP positioning. Although weaker CPI initially supported a bounce, firmer US data later limited upside momentum.
Against the euro, the pound remained relatively pressured, with EUR/GBP trading near 1.1425 (mid-market rate) end of session, having started at around 1.1470, as diverging monetary policy expectations and UK political risks weighed on sterling. Markets are also attentive to comments from ECB President Lagarde, which may influence short-term euro direction.
The euro held relatively steady versus the dollar, with EUR/USD confined to a narrow range as volatility remained subdued. With eurozone inflation still below target and ECB policy expectations gradually shifting, the single currency continues to move largely in response to broader risk sentiment and U.S. data developments.
With limited major UK and eurozone releases, price action was driven mainly by macro sentiment and central bank expectations rather than fresh data. Looking ahead, markets will focus on upcoming US employment and inflation figures for clearer guidance on Fed policy. For sterling and the euro, further domestic data and central bank communication will be key in shaping near-term direction. Overall, the dollar bias remains neutral to slightly firm, while GBP and EUR could stabilise if policy expectations become clearer. If you need guidance for your upcoming transfer(s), please contact our team to set up the best FX strategy for you.