Published: 13/05/2025 By ECAP
De-escalation
The British Pound is recovering, supported by strong wage growth even as unemployment rises. Against the Euro, it continues to climb, while gains against the Dollar are tempered by improving global sentiment following a trade agreement between the US and China. Despite ongoing labour market concerns, resilient earnings delay interest rate cuts. Ultimately, the Pound remains broadly firm, though signs of economic weakness may limit further strength.
The Euro weakened broadly as global markets reacted positively to a major US-China trade agreement, boosting risk sentiment and the US Dollar. As a traditional safe haven, the Euro struggled amid this shift, falling against many peers. However, upcoming Eurozone data, especially Germany’s economic sentiment index, could provide support. Ultimately, the Euro’s near-term direction depends on market appetite for risk and key regional economic indicators.
The U.S. Dollar strengthened sharply after a major tariff rollback agreement between the U.S. and China boosted investor confidence. Markets welcomed the de-escalation as a positive shift in global trade outlook. Looking forward, further support for the greenback may come from upcoming U.S. inflation data, which could reinforce expectations of tighter Federal Reserve policy.
Data supplied by GC Partners