Published: 29/07/2025 By ECAP
Risk-on Sentiment
The British Pound rose sharply as investor sentiment improved, supported by a more optimistic global outlook. Despite recent concerns over UK fiscal policy and subdued economic data, Sterling gained ground, showing resilience in a risk-on environment. The move came without a clear domestic catalyst, suggesting market positioning and broader confidence played key roles in boosting the Pound’s short-term performance at the start of the week.
The Euro weakened as markets digested the EU-US trade deal, which introduced moderate tariffs and raised concerns among European exporters. Despite initial optimism, the single currency lost momentum due to lingering trade risks, cautious investor sentiment, and anticipation of weaker Eurozone GDP data. Ultimately, speculative positioning, high carry costs, and uncertainty over future European Central Bank policy also contributed to the Euro’s decline early in the week.
The U.S. Dollar strengthened following the EU trade deal announcement, reflecting improved sentiment and reduced tariff fears. While trade tensions have eased, focus now shifts to the Federal Reserve’s policy stance. Markets await key economic data, including jobs and inflation figures, which could influence rate expectations. Though recent gains may soften, the greenback remains resilient unless the Fed signals a significant shift toward monetary easing.
Data supplied by GC Partners