The GBP/USD currency pair faced challenges in gaining bullish traction during the European session on Friday, lingering around the 1.2650 mark. As market participants eagerly await significant US data releases, the potential for the Federal Reserve to implement more rate cuts than previously anticipated looms large. This economic backdrop mirrors the situation in the United Kingdom, where upbeat UK Retail Sales have sparked demand for the Pound Sterling, but mixed PMI reports have curbed its upward momentum.
Meanwhile, the EUR/USD pair remains subdued, trading below 1.0500. Data from Germany and the broader Eurozone indicates a moderate expansion in private sector economic activity in February, setting a contrasting scene to developments across the Atlantic. Investors are closely monitoring forthcoming US PMIs, as distinct economic dynamics unfold across the US, eurozone, and UK.
The US economic landscape presents its own unique set of circumstances. Repo rates in the United States have become more attractive, drawing investor attention toward US bills, which are expected to appreciate. These factors contribute to varied market movements and investor sentiment.