Currency

Sentiment Driven

Posted on by Will R

GBP

The British Pound strengthened as global risk sentiment improved and equity markets rallied. While concerns remain over the UK’s fiscal position, Sterling was buoyed by delayed U.S. tariffs and optimism around potential trade negotiations. Analysts caution that the Pound is still susceptible to volatility, budgetary pressures, and possible rate cuts should economic data deteriorate. Sterling’s trajectory remains closely tied to overall market sentiment.

EUR

The Euro held firm despite weak retail sales, benefiting from its safe-haven status during ongoing global trade uncertainty. Investors remain focused on tariff negotiations with the U.S., particularly concerning autos and pharmaceuticals. Germany is pushing for swift agreement, whereas France and Spain prefer a tougher approach. With little fresh eurozone data, market attention remains on geopolitical developments.

USD

The U.S. Dollar faces continued pressure as markets digest tariff uncertainty and shifting sentiment. Early trade tensions briefly lifted the Dollar, but recent negotiation signals from the White House have softened its safe-haven demand. Despite recent declines, the Dollar is underpinned by strong economic fundamentals and higher interest rates, though short-term volatility is expected to persist.

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Safe Haven

Posted on by Will R

Daily FX Market Update – 24th June 2025

Welcome to your daily market update, bringing you the latest insights into the major currency movements shaping global markets.

GBP – Sterling Finds Support Amid Middle East Ceasefire

The British Pound strengthened following the announcement of a ceasefire agreement between Israel and Iran. This development eased fears of a broader regional conflict and improved global investor sentiment.

As geopolitical tensions subsided, oil prices fell, weakening the U.S. Dollar and offering support to Sterling. However, any further upside for the Pound may be capped by domestic headwinds, including uncertainty over the UK’s economic outlook and growing speculation that the Bank of England could move to cut interest rates in the coming months.

EUR – Euro Slips on Improved Risk Appetite

The Euro edged lower as investors shifted toward risk-sensitive currencies in response to easing geopolitical concerns. Typically viewed as a more stable option during periods of market stress, the Euro saw reduced demand amid a broader return to risk-on sentiment.

Despite this dip, the single currency remains highly reactive to geopolitical developments. Any renewed instability or volatility—particularly in the Middle East—could quickly restore demand for the Euro as a perceived safe haven.

USD – Dollar Weakens as Safe-Haven Demand Fades

The U.S. Dollar lost ground after news of the Israel-Iran ceasefire dampened demand for traditional safe-haven assets. Markets interpreted the de-escalation as a signal of reduced risk, pushing investors toward more growth-oriented currencies.

That said, the situation remains fragile. Any renewed tensions—especially involving strategic areas like the Strait of Hormuz—could lead to a swift rebound for the Dollar, reinforcing its status as a global refuge during periods of crisis.

Looking Ahead

As always, the FX markets remain sensitive to geopolitical events and central bank policy speculation. If you would like to discuss your upcoming currency requirements, review your current exchange strategy, or explore how we can help navigate market volatility, please don’t hesitate to get in touch.

Ongoing Speculation

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GBP – Sterling Strengthens on Trade Optimism and Economic Resilience

The British Pound strengthened last week, buoyed by the announcement of a UK-EU trade agreement expected to boost the UK economy by £9 billion. Sterling experienced volatility midweek due to mixed signals from the Bank of England and inflation data driven by one-off factors. However, gains returned as UK Services PMI and retail sales data came in strong. With no major UK economic releases ahead, broader market sentiment is expected to guide GBP movements this week.

EUR – Euro Pressured Despite Initial Gains

The Euro rose early in the week, supported by a weaker U.S. Dollar and positive sentiment surrounding a UK-EU trade reset. However, downward pressure emerged following a fall in German producer prices and growing speculation of an ECB rate cut. A surprise contraction in Eurozone PMIs further weighed on the currency. This week, attention shifts to Germany’s inflation data, where softer readings may increase pressure on the ECB to act at its June meeting.

USD – Greenback Slips Amid Political and Economic Uncertainty

The U.S. Dollar weakened last week, as rising federal debt concerns and the postponement of planned tariff hikes on EU imports undercut investor confidence. Although stronger-than-expected U.S. PMI data offered brief support, the delay of a proposed 50% tariff by Donald Trump reignited selling pressure. This week’s focus will be on key data releases, including durable goods orders, GDP, and the core PCE inflation index, which could sway markets amid ongoing speculation of Federal Reserve rate cuts.

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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Market Uncertainty

Posted on by Will R

The British Pound is under pressure due to the UK’s growing debt, weak economic growth, and rising debt servicing costs. Ahead of the Spring Statement, concerns mount about whether Chancellor Rachel Reeves’ proposed £15 billion in public spending cuts will be sufficient. As the Pound holds steady against the Euro and US Dollar, analysts warn that insufficient fiscal action could lead to higher debt costs and further economic challenges for the UK.

The Euro weakened as it faced pressure following mixed PMI data. Manufacturing in the EU showed strength, particularly in Germany, but services remained weak in countries like France. This uneven economic performance raised concerns about growth, and the Euro’s decline was further influenced by expectations of upcoming US tariffs on April 2. These factors combined to weigh on the Euro amidst broader global market uncertainty.

The U.S. Dollar remained steady after four consecutive gains, with the Dollar Index holding at 104.29. Analysts highlighted the Federal Reserve’s cautious stance on rate cuts, which supported the greenback. With the upcoming US tariff implementation on April 2nd, concerns about potential market volatility are growing, particularly regarding the selective tariff policy that could impact global trade.

Structural Changes

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The British Pound traded sideways against most peers amid a lack of notable UK economic data. In fact, Sterling sentiment remained mixed due to concerns about the UK economy’s recovery, despite government efforts to boost growth. The focus is shifting to the upcoming BoE interest rate decision, with investors cautious about potential volatility in the British Pound’s value ahead of tomorrow’s announcement.

 
The Euro faces challenges as Germany’s massive spending plan fails to push the currency higher. In fact, despite hopes for economic boosts from increased government spending, analysts remain cautious. Structural reforms are necessary for sustainable growth, and the Euro could retreat if the fiscal impact is delayed or fails to meet expectations. Ultimately, the market’s optimism may fade as the spending plan’s real effects take time to materialize.

 
The U.S. Dollar struggled ahead of the Federal Reserve’s policy update, with investors wary of potential surprises. While the Fed is expected to hold rates, any cautious tone or hints about future rate cuts could weigh on the greenback. Ultimately, the Dollar’s performance has been affected by economic uncertainties, and market participants are closely watching the Fed’s guidance for signals of future policy direction.

Risk Aversion

Posted on by Will R
The British Pound traded sideways after a strong rally against the U.S. Dollar and a sharp drop against the Euro. Investors are confident the Bank of England will maintain a restrictive policy due to strong wage growth, fuelling inflation in the services sector. Looking ahead, traders are focused on upcoming UK economic data, including GDP and factory figures, to assess economic strength.

 
The Euro has gained attention following Germany’s fiscal stimulus package, signalling a shift toward growth considerations over U.S. tariff threats. However, while fiscal measures in Europe could help mitigate tariff impacts, the potential for a continued Euro rally is limited, as market sentiment shifts away from the dollar amid broader economic challenges.

 
The U.S. Dollar weakened amid concerns over a global economic slowdown and rising trade tariffs, with the Dollar index hitting a four-month low. Speculation about a potential U.S. recession, along with weak labour market and consumer sentiment data, contributed to the decline. Attention now shifts to upcoming U.S. inflation data for further insights into the economy and interest rate changes.

Trade Developments

Posted on by Will R
The British Pound recovered substantial ground against the U.S. Dollar after the London Summit, supported by a rally in European currencies. Looking forward, trade developments, US tariffs, and economic data will be key this week. Ultimately, ING expects the Pound to stay supported in the short term but anticipates pressure from the upcoming UK budget statement.

 
The Euro strengthened against the U.S. Dollar yesterday, driven by optimism over potential peace talks between Ukraine and Russia. In fact, European leaders are taking the lead in pushing for a peace deal, which supported the euro’s recovery. However, inflation data and upcoming European Central Bank decisions could impact the euro, with expectations of a rate cut to stimulate the eurozone economy, which has been struggling with stagnation.

 
The U.S. Dollar steadied after yesterday’s losses as investors awaited the imposition of higher tariffs by President Trump. These tariffs, targeting China, Canada, and Mexico, are expected to increase U.S. inflation but benefit the Dollar in terms of trade and geopolitical interests. However, concerns over a potential economic slowdown and weakening consumer confidence limited the Dollar’s support.