April 2025

Structural Risks

Posted on by Will R
The British Pound gained substantial strength against the US Dollar, lifted by weakness in the greenback due to trade tensions, shifting investor sentiment, and concerns over U.S. economic policies. Analysts see potential for continued gains, supported by the UK’s lower exposure to tariff risks and the improving global market sentiment. While resistance may slow momentum, Sterling remains well-supported and could see further upside in the near future.

 
The Euro strengthened midweek, benefiting from a weakening U.S. Dollar and steady Eurozone PMI data, despite a dip in the services sector. Unlike the UK, where PMI dropped sharply, the Eurozone’s stability supported the single currency. Investors also showed interest in the Euro amid signs of U.S. capital repatriation. Looking ahead, Germany’s Ifo index may influence the Euro, depending on the strength of upcoming economic indicators.

 
The U.S. Dollar continues to face mounting pressure from multiple fronts, including concerns over the economic impact of tariffs, political interference in monetary policy, and fears about the stability of US assets. As investor confidence erodes, the Dollar has struggled despite occasional rebounds. Ultimately, analysts now see structural risks and a long-term downtrend emerging, fuelled by global shifts away from US dominance and toward alternative reserve currencies.

Trade Disputes

Posted on by Will R
The British Pound remained under pressure despite a global risk recovery during yesterday’s trading session. In fact, the GBP/USD exchange rate hit a one-month low, with further losses expected before potential stabilization. Moreover, the Pound also fell to an eight-month low against the Euro. Ultimately, domestic concerns, including the Bank of England’s likely interest rate cuts, added to the downward pressure, as market uncertainty grew.

 
The Euro strengthened against the U.S. Dollar and the British Pound, driven by global uncertainties. Despite the volatility, the Euro benefitted from market adjustments and risk appetite recovery. In fact, the rise reflected a shift in investor sentiment as market participants sought safer assets amidst concerns over trade conflicts and economic disruptions, with the Euro emerging as one of the stronger currencies in the current environment.

 
The U.S. Dollar weakened by 0.7% during last night’s trading session amid rising global tensions, particularly US-China trade disputes. Fears of a full-scale trade war, with new tariffs set to take effect, contributed to market volatility. Additionally, growing speculation that the Federal Reserve may cut interest rates multiple times this year further pressured the Dollar, as concerns about the US economy’s stability intensified in response to ongoing trade disputes.

Global Uncertainties

Posted on by Will R
The British Pound has shown steady performance, particularly against the Euro, where it has recorded three consecutive weekly advances. However, this momentum remains vulnerable to volatility, especially with global uncertainties surrounding U.S. tariffs. Ultimately, the British Pound is expected to remain in a tight range ahead of Trump’s tariff announcements, with potential gains if the tariffs are less severe than expected, or losses if the news causes further global instability.

 
The Euro is facing uncertainty as markets brace for U.S. tariff announcements. Investor sentiment is cautious due to fears that the tariffs could disrupt global trade, with potential implications for the Eurozone economy. Ultimately, the Euro’s direction will depend on the severity of the tariff measures. Moreover, upcoming German and Eurozone inflation data may influence expectations regarding European Central Bank actions, including possible interest rate adjustments.

 
The U.S. Dollar has faced pressure due to concerns over President Trump’s upcoming tariffs. In fact, the Dollar Index has been largely steady but is on track for quarterly losses. Investors are worried that the tariffs, set to target all countries, could lead to inflation and slow growth in the US. Ultimately, as fears rise, the Dollar remains vulnerable, with analysts predicting a potential rebound if tariffs are harsher than expected.

 

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