Published: 22/07/2025 By ECAP
Scaling Back
The British Pound has recently firmed as UK public borrowing in June came in below expectations, easing fiscal concerns. Moreover, stronger than expected inflation and payroll data have led investors to scale back bets on Bank of England rate cuts, supporting Sterling. Ultimately, although risks remain ahead of the autumn budget, reduced fiscal fears are helping the Pound stabilize and gain ground against both the Euro and U.S. Dollar.
The Euro traded cautiously as markets awaited a speech from the European Central Bank’s president, though she is expected to avoid major signals ahead of the next interest rate decision. For now, concerns over escalating EU-US trade tensions, including possible tariffs and retaliation plans, limited Euro momentum. Ultimately, investors remained wary, with broader uncertainty keeping the Euro’s performance restrained despite the lack of impactful Eurozone data.
The U.S. Dollar weakened amid political tensions and cautious Federal Reserve signals. Moreover, comments from President Trump criticizing the Fed Chair raised concerns over central bank independence, weighing on Dollar sentiment. Looking forward, a lack of major US data leaves the greenback vulnerable to broader market mood and speculation around future interest rate policy. Ultimately, investors are watching for remarks from the Fed to gauge the next direction for the Dollar.
Data supplied by GC Partners