Market Snapshot

GBP Under Pressure, USD Holds Firm

• 📉 Pound Struggles for Momentum The Bloomberg Pound Index is on track for its fourth straight weekly decline, raising concerns about continued downside pressure on the currency. Could another weekly loss be in sight?
• 📊 Resilient US Data Delays Rate Cut Bets Robust US economic indicators have prompted markets to push back expectations for the next Federal Reserve rate cut to July. This has provided support for the dollar and added to the pound’s headwinds.

👉 What does a stronger dollar mean for your hedging plans or FX risk exposure this quarter?

Market Recap:

Strong Jobs Data Delays Rate Cut Bets

Friday’s U.S. nonfarm payrolls surprised to the upside, with 177,000 jobs added in April compared to the 138,000 forecast. This stronger reading led investors to scale back expectations for imminent rate cuts, pushing the anticipated timeline from June to July. The dollar initially rose but ultimately ended the week flat, as markets digested the news.

Equities rallied following the data, with stocks now trading above the levels seen before April’s tariff headlines.

Sterling closed the week weaker, marking a fourth straight weekly loss in the Bloomberg pound index—a sign of persistent softness in GBP sentiment.

Meanwhile, Monday’s U.S. services PMI beat forecasts, showing resilience in the services sector despite ongoing tariff concerns. However, the dollar’s reaction was limited.

Today’s Market Overview:

Central Bank Watch – Fed & BoE in Focus

This week’s spotlight falls on central banks, with both the Federal Reserve and Bank of England holding policy meetings.

🔹 Federal Reserve (No Rate Change Expected)

While no move is anticipated from the Fed, attention will center on Chair Jerome Powell’s tone—especially after renewed pressure from Donald Trump advocating for rate cuts.

Despite Q1 GDP showing a -0.3% contraction, high core PCE inflation and solid job growth may keep the Fed on a hawkish path, potentially supporting the dollar. 

🔹 Bank of England (Rate Cut Expected)

Markets have fully priced in a 25bp cut from the BoE this week. Dovish signals from policymakers—concerned about the impact of tariffs on growth and inflation—could open the door to further easing.

Traders are already assigning a 56% chance of another cut in June, so any soft commentary could push sterling lower.

6th May 2025

Get in Touch!

Our team are here to help you get more from your money when making international payments. We will work with you to understand your payment needs and offer guidance on the best options available to you.

P: 07441 910 897

E: FX-Admin@frank-exchange.com

This document has been prepared solely for information and is not intended as an Inducement concerning the purchase or sale of any financial instrument. By its nature market analysis represents the personal view of the author and no warranty can be, or is, offered as to the accuracy of any such analysis, or that predictions provided in any such analysis will prove to be correct. Should you rely on any analysis, information, or report provided as part of the Service it does so entirely at its own risk, and Frank eXchange Limited accepts no responsibility or liability for any loss or damage you may suffer as a result.  Information and opinions have been obtained from sources believed to be reliable, but no representation is made as to their accuracy. No copy of this document can be taken without prior written permission.