Published: 24/07/2025 By ECAP
Scope for Recovery
The British Pound strengthened on improving global trade sentiment, especially after a U.S.-Japan agreement eased market uncertainty. In fact, positive risk appetite and expectations that the BoE will be cautious with rate cuts supported the currency. Ultimately, analysts view the Pound as undervalued, with scope for recovery if UK economic data remains firm.
The Euro is under pressure as trade uncertainty fades and risk appetite improves, reducing demand for traditionally safer currencies. While it had benefited from global tensions over the past few months, new U.S. trade deals and a potential EU-U.S. accord are shifting sentiment. Ultimately, even though the ECB is expected to pause rate cuts, investors remain cautious about the currency’s near-term strength.
The U.S. Dollar remains near recent lows as markets respond positively to Trump’s trade deal with Japan, easing global tariff fears. The deal reduced tariffs on Japanese imports and encouraged broader optimism for future agreements. Despite this, the Dollar has weakened since sweeping tariffs were first announced in April. Focus now shifts to U.S. housing data and the upcoming Federal Reserve meeting for further direction.
Data supplied by GC Partners