Sterling ends the week in the red

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waterman

Written by Dan Waterman
March 13th 2026
UK GDP disappoints and traders get nervous for the Pound..

The market (and us) were fully expecting to see the continued post-Budget rebound in January with a growth forecast of 0.2% at least. Instead 0% was the result and GBP sees its value drop across the board today.

£-€ has lost 0.3% (although still favourable for now) with £-$ down 0.7%, a fresh 3-month low.

This was not the news Sterling needed at the current time or to start the year with. Not helping the Pound's case today were President Trump's comments last night "We have unparalleled firepower, unlimited ammunition and plenty of time". A very different tone to the 'war will be over real soon'.

The Iran-US war is now expected to last months and not weeks and so a potential market capitulation is on the cards here with inflation worries the main scare from higher energy prices.

This would see the USD gain even more than the 3% it already has since the conflict started across most of the board with GBP v EUR a lot more uncertain.

£-€ has been on some journey this month, climbing nearly 2% before today riding that interest rate premium now no Bank of England rate cuts are expected anytime soon. But stagflation here is concerning and this could very easily weigh on the Pound in the months ahead.