Published: 29/05/2025 By ECAP
Prominent Risks
The British Pound extended its recent decline amid renewed strength in the U.S. Dollar, following a U.S. court ruling on tariffs. In fact, with little new UK economic data, Sterling remains vulnerable to global sentiment shifts, particularly those linked to U.S. trade developments. While recent losses reflect near-term volatility, analysts suggest the Pound retains potential for recovery, supported by more stable fundamentals and expectations of a gradual rebound once external pressures ease.
The Euro weakened as easing U.S. trade tensions reduced demand for non-Dollar assets. In fact, a U.S. court ruling halting Trump’s tariffs lifted global sentiment, which typically weighs on the Euro. Additionally, disappointing German jobs data and expectations of an ECB rate cut further pressured the currency. Although inflation expectations rose slightly, overall investor sentiment toward the Euro remains cautious amid uncertain economic and policy conditions in the Eurozone.
The U.S. Dollar edged higher, supported by strong consumer confidence and a favourable court ruling against Trump’s tariff agenda. However, gains remain limited due to concerns over economic uncertainty, trade policy instability, and a worsening debt outlook. Ultimately, analysts expect Dollar strength to be short-lived, with lingering fiscal and political risks prompting investors to gradually move away from U.S. assets despite brief periods of recovery.
Data supplied by GC Partners