Published date: 31 March 2025

GBPEUR

GBP/EUR continued to bounce last week, briefly gaining a 1.20 handle, but the wider rangebound consolidation seen all year remains. As the UK tries to negotiate with the US to avoid further tariffs, the eurozone remains the more probable target (details on Wednesday), and thus it is with the euro where the bigger reaction is likely to be seen this week, either from a fresh round of punitive measures or a delay/consultation period.

GBPUSD

GBP/USD continued to consolidate last week. The minimal reaction to the Spring Statement indicated that many of the measures were expected by the market, despite a meaningful downgrade from the OBR to just 1% for 2025 (down from 2% in Oct). The lack of gilt market volatility would have come as a relief to Reeves, given the budget deficit for 2025 was significantly increased over the forecast made in October. This week, markets are focused on tomorrow’s tariff news and a raft of US data, including Friday’s Non-Farm Payrolls (NFP).

EURUSD

EUR/USD retraced to the 1.0723 level last week, in line with our recent technical guidance, as some recent euro longs reduced ahead of an important week of tariff news and US domestic data. The euro will react to the announcement of fresh tariff measures this week, with downside risk contrasted by the prospect of a relief rally on less punitive measures/delayed timelines. Non-Farm Payroll (NFP) data from the US on Friday will see out
a busy week for stateside data releases.