Currency forecast: January-March

Will sterling stumble in a new age of chaos?

What can your business expect from currency markets this quarter?

Unsurprisingly, Donald Trump’s return to the Oval Office looms large. The new commander in chief’s second stint in the top job came about as the crowning moment in an astonishing political Lazarus act. Trump swept to power on an aggressive platform of trade protectionism and deregulation. But how would that impact currency markets?

His election has galvanised the US dollar, lifting it to strong advances over the pound and the euro to end 2024. Just how long it can sustain that success will likely depend on Trump’s actions as well as how they impact economic growth and inflation.

For Europe, Trump’s return is a worrying reminder of its precarious position in the global economy. Both the UK and the eurozone are exposed to the threat of tariffs, whether that’s in the UK services sector or in European manufacturing and exports.

There are also political concerns that could rock the region. After his Labour party took power, Sir Keir Starmer was been faced with successive crises and has seen his popularity plummet. Germany is preparing for federal elections in February and the threat from the extreme right wing threatens to upend political convention.

The risks to your business are significant. In our latest forecast, leading banks predict key currency pairings could fluctuate by 10% between now and April. Is your business prepared for this and could it withstand any unforeseen black swan events?

Download our January-March Quarterly Forecast to learn more.

Make sure any upcoming transactions are protected against the risks of sudden market movements. Secure a fixed exchange rate now with a forward contract; call your account manager on 020 3918 7255 to get started.