Hubpay FX Weekly Report – 18th February 2025

The US Dollar saw a dip for the second consecutive week as concerns over tariffs and geopolitical tensions eased. A potential peaceful resolution to the Russia-Ukraine conflict sparked optimism, particularly after a high-profile discussion between Presidents Trump and Putin. This shift led to a rebound in the Euro, which surged by nearly 2%, along with other major currencies like Sterling, the Australian Dollar, Indian Rupee, and the South African Rand.

Here’s a breakdown of key trends:

US Dollar (USD):

• The USD Index weakened by 1.2% against a basket of peers.
• Key data showed a sharp decline in US retail sales (-0.9% in January).
• The market expects more Federal Reserve rate cuts due to weak economic data.

Asia-Pacific:

• The Chinese Renminbi strengthened by 0.5%, with the People’s Bank of China focusing on maintaining currency stability.
• The Japanese Yen weakened to 152.2 against the USD, with the Bank of Japan maintaining its dovish stance.
• The Australian Dollar gained 1.9%, boosted by lower global trade tensions and a weaker USD.

South Asia:

• The Indian Rupee gained 1.2%, supported by the Reserve Bank of India's intervention.
• The Pakistani Rupee (PKR) remained stable with minimal movement.

Middle East & Africa:

• The Nigerian Naira weakened slightly by 0.84% against the dollar.
• The South African Rand gained 1.7%, fueled by rising gold prices amidst trade war fears.

Europe:

• The British Pound (GBP) strengthened by 1.7% against the USD, aided by a delay in US tariffs and stronger-than-expected UK GDP data.
• The Euro gained 1.95%, helped by improving sentiment surrounding the Russia-Ukraine conflict and solid growth data.

Key Insights: Geopolitical developments and key data releases are significantly impacting currency movements, with global trade dynamics and economic policies setting the stage for further volatility. Businesses must stay informed and agile to navigate these shifts.

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