Published: 30/05/2025 By ECAP
Prominent Risks
The British Pound is under modest pressure ahead of key U.S. inflation data but maintains a generally bullish outlook. Support comes from the IMF’s upgraded UK growth forecast and reduced expectations of near-term Bank of England rate cuts. Moreover, positive UK retail data and easing Brexit trade tensions further underpin sentiment. Ultimately, despite recent consolidation, the Pound continues to show resilience in the face of external uncertainties.
The Euro regained strength after early weakness, buoyed by easing U.S.-EU trade tensions and a court ruling temporarily reinstating U.S. tariffs. In fact, despite mixed German retail sales and an uncertain inflation outlook, the Euro outperformed key peers. Support also came from expectations of continued European Central Bank policy normalization. Ultimately, amid global trade uncertainty, the Euro remains resilient and a favoured alternative in risk-averse market conditions.
The U.S. Dollar edged lower after an appeals court reinstated Trump’s tariffs, partially reversing earlier gains. In fact, persistent legal uncertainty, concerns over fiscal health, and a potential economic slowdown kept pressure on the greenback. On that note, the Dollar remains on track for a fifth straight monthly decline. Looking forward, investors now await the PCE inflation data, the Fed’s preferred gauge, which could shape expectations for future interest rate decisions.
Data supplied by GC Partners