All the majors receive a boost in their own right today..
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| After collapsing over the last couple of months, US stock markets have recovered from the Trump tariff drama and are now in positive territory for 2025. This is good news for GBP remember as it follows closely the performance of the S&P 500, a general global indicator of confidence.
Yesterday, the US posted lower inflation data than expected (2.3% v 2.4%) which has seen the Dollar weaken as a result. The Fed are highly likely to not budge on the news, however the print is the lowest seen since 2021. Naturally, President Trump has jumped once again on the Fed to cut interest rates.
ECB's Nagel has commented today how he sees the Euro becoming a stronger reserve currency in the coming years. He maintains the USD is very important to the world's financial system, but as confidence in the US/USD has dropped and Germany is about to be revived, he is probably right.
The Euro has gone from having a 35% market share to 21% in the last decade. If the Euro starts being stockpiled by other central banks (already underway), we will see the USD fundamentally weaken & the Euro strengthen gradually over time.
Next Monday we see a summit between the EU & UK. The discussion will be on defence, security, criminal & sanitary matters, emissions, energy, fisheries and migration. Basically a Brexit negotiation. An improved agreement or at the very least a confirmed better relationship will be GBP positive both near and long term. |
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