Forex News

• EUR/GBP rebounds from the 0.8700 handle, supported by in-line Eurozone Q4 GDP and firmer labour data.
• UK growth misses expectations, keeping sentiment around the Pound mixed as BoE easing expectations linger.
• Diverging policy signals from the ECB and the BoE keep the cross underpinned.

EUR/GBP rebounds from earlier daily lows on Friday, with the Euro (EUR) drawing modest support from preliminary Eurozone Gross Domestic Product (GDP) data that showed the economy growing in line with expectations in the fourth quarter of 2025. At the time of writing, the cross trades around 0.8717, after bouncing from the 0.8700 psychological level.

Data released by Eurostat showed that the Eurozone economy expanded by 0.3% QoQ, matching both market expectations and the previous estimate. On an annual basis, GDP rose 1.4% in Q4, slightly above the 1.3% forecast.

The labour market also showed steady momentum, with Employment Change holding at 0.2% QoQ in the fourth quarter, above the 0.1% forecast, while annual employment growth held at 0.6%, in line with expectations.

The data also supports the case for the European Central Bank (ECB) to keep policy unchanged. Speaking on Thursday, ECB Governing Council member Gabriel Makhlouf said that inflation is “basically on target” and that the central bank is in a good place on policy.

In the United Kingdom, data released on Thursday by the Office for National Statistics showed that the economy grew by 0.1% QoQ in the fourth quarter, missing expectations for a 0.2% rise. On a yearly basis, GDP growth slowed to 1% in Q4, down from 1.2% previously.

The softer UK data keeps sentiment around the British Pound (GBP) mixed, while dovish Bank of England (BoE) expectations and a steady ECB stance. BoE chief economist Huw Pill said on Friday that policy should focus on underlying inflation, adding that it currently looks closer to 2.5% rather than 2%. He said the monetary policy stance remains restrictive and that holding rates at current levels, rather than raising them further, should be enough to bring inflation under control.

Adding to the supportive tone, risk reversals, which show the difference between the cost of buying the Euro against the Pound and selling it, rose to 78.8 basis points on Tuesday, the highest level since late September, signalling a stronger positive bias toward the Euro, Reuters reported earlier on Friday.

Danske Research Team highlights Norway’s Q1 oil investment survey, which points to higher-than-expected nominal spending in 2026 and 2027. After adjusting for cost inflation, investment volumes appear stronger than Norges Bank’s December projections. The team also notes Norges Bank’s plan to publish MPC discussion summaries, which could improve market guidance and reduce meeting-day volatility.

Upbeat capex survey and more NB transparency

"In Norway, the Q1 oil investment survey revealed that oil companies expect to invest NOK 255.3 billion in 2026 and NOK 201.1 billion in 2027, indicating nominal growth of 0.6% and 2.0%, respectively."

"Adjusting for cost inflation, the figures suggest slightly stronger growth than Norges Bank's December MPR volume estimate for 2026 at -3%, and significantly stronger for 2027 at -6%."

"As expected, there was no new monetary signals in NB governor Wolden Bache's annual address last night."

"The most interesting point short term is that Norges Bank is getting more transparent: 'In the course of this year, we will begin to publish a summary of the Committee's discussions.'"

"This could improve market guiding and avoid some of the volatility occasionally seen on the day of the MPC-meeting the last couple of years"

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

ING’s Romania team highlights that weaker-than-expected GDP and a sharp 4Q25 contraction introduce downside risks to inflation and could prompt the National Bank of Romania to front-load its easing cycle. They still expect the first rate cut in May 2026 and a total of 100bp of easing, while fiscal consolidation pressure may be tempered by slower growth.

Weaker data tilt NBR toward easing

"Today’s weaker-than-expected GDP figure introduces clear downside risks to the inflation outlook and could encourage the National Bank of Romania to front-load its easing cycle."

"At the same time, the sharp economic slowdown may increase the pressure on the government to temper the pace of fiscal consolidation, given the scale of the setback."

"We continue to expect the NBR to deliver its first rate cut in May 2026, with a total of 100bp of easing over the course of the year."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Commerzbank’s Tatha Ghose expects EUR/HUF to trade broadly sideways around 375 in coming months as the Euro appreciates, before the pair gradually rises toward 400 by end-2026, implying a weaker Forint. The report highlights improving central bank credibility, lingering inflation and policy asymmetry risks, and significant political uncertainty around Hungary’s April 2026 elections.

Forint strength seen fading after 2026 peak

"We forecast EUR-HUF to trade sideways in the 375 region while the euro appreciates in coming months but gradually rise (meaning weaker forint) after the euro has reached its peak in 2026."

"That said, the central bank did appear to pivot towards the dovish last December, which triggered a noticeable sell-off in the forint. But the sell-off has now reversed because MNB pivoted back towards hawkish in January following one adverse CPI print. This episode, in fact, further highlighted the MPC's professional, data-driven approach, and has further enhanced its credibility."

"Going forward, there are several risks for the currency."

"First, Hungarian inflation is at risk of staying above that of CE3 peers through 2026 and possibly 2027 – Hungary’s core inflation is currently the highest among CE3 peers and shows no sign of improving – this increases exchange rate risks."

"We assume that in our base-case there will be no major FX rally following the elections. But of course, we acknowledge that this can happen, as it happened in Poland. But even if it did, the path forward will not be smooth sailing for the new government. We see EUR-HUF reaching 400.0 levels by the end of 2026."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Commerzbank’s Commodity Research team highlights a sharp setback in Gold and Silver, with Gold briefly dropping to USD 4,900 per ounce before stabilizing near USD 5,000. Analysts attribute the move to technical and flow factors rather than a clear macro trigger and expect a continued consolidation phase, especially with Chinese participants absent during the New Year holidays.

Sharp drop then stabilizing prices

"Gold and silver prices came under significant pressure yesterday."

"As a result, gold slipped to USD 4,900 per troy ounce and silver to USD 75 per troy ounce."

"Yesterday's price slide also shows that the precious metals markets have not yet settled down after the turmoil at the end of January."

"US consumer prices are due to be published today."

"If these also turn out to be stronger than expected, this would further dampen expectations of interest rate cuts, which could put further downward pressure on gold and silver."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)