GBP Strengthens as Markets Pause Ahead of New Data; Dollar Steadies Amid Trade Policy Uncertainty
Markets end the week on a quieter note with no major economic data on the calendar today. Next week could bring more directional moves as new data and central bank commentary come into focus.
Key Market Takeaways:
· Dollar steadies amid policy speculation
The greenback is holding ground as investors assess the potential implications of recent FX-related trade discussions, particularly following the U.S.–South Korea talks.
· GBP/EUR maintains recent strength
The pound continues to trade at its highest level in a month against the euro, reflecting relative resilience in UK data and ongoing eurozone uncertainty.
Market Recap: Dollar Drifts as Data Disappoints
Mixed momentum for the dollar
U.S. retail sales and producer price index (PPI) figures for April both underperformed expectations, leading to a modest decline in the dollar on Thursday. However, currency markets showed no clear trend as investors continued to digest earlier developments this week.
Tariff-driven volatility lingers
Initial optimism around the mutual U.S.–China tariff reductions gave the dollar a boost at the start of the week. That sentiment was later clouded by speculation that Washington could be exploring ways to weaken the dollar as part of broader trade negotiations—though this has since been dismissed.
Sterling holds firm
The British pound remained relatively strong across the board, buoyed by Thursday’s stronger-than-expected UK GDP data, which added to expectations of economic resilience in Q1.
Today’s Market Update:
With no major economic data scheduled today, markets are heading into the weekend with a subdued tone. Here's what's shaping the current landscape:
πΉ Dollar Consolidation Continues
The U.S. dollar is steady as early-week optimism—sparked by reciprocal tariff reductions between the U.S. and China—has lost momentum.
Uncertainty lingers around U.S. trade policy, particularly speculation that the Trump administration may pursue a weaker dollar strategy, despite repeated denials.
What this means: Markets are in a holding pattern, lacking a clear catalyst. Traders may remain cautious until new developments emerge next week.
πΉ GBP/EUR Hits One-Month High
Sterling has regained ground, with GBP/EUR reaching its highest level in a month.
The pair has recovered much of the ground lost earlier due to geopolitical concerns tied to U.S. trade moves.
What this means: The pound is benefiting from improved sentiment, but future gains may depend on upcoming UK and Eurozone data and developments in global risk appetite.
16th 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.
