We're back after the bank holiday (another one)…
This week, read about the US Dollar rebound, and uneven waters across the Atlantic. What does this week hold for the euro and pound sterling?
Current rates
| Currency pair | Rate |
|---|---|
| eur usd | 1.1317 |
| gbp eur | 1.1743 |
| gbp usd | 1.3290 |
Rates correct as of 07:02 on Tuesday 6th May but may now have changed.
The Big 3
Three stories covering the latest developments in economies, currencies and borders.
Will the US rebound last?
USD Bounced back after two days of decline following positive reports of service provider activity and recession fears easing. All eyes will be on the FOMC meeting on 7th May to confirm what rate decisions are made.
Speculative interest in Euro remains firm
The ECB opted for a 25 basis-point cut to 2.25% two weeks ago and struck a noticeably soft tone in its guidance. Markets are now pricing in another ECB cut as early as June—widening the divergence in policy trajectories and putting additional pressure on the euro. But speculative interest in the euro remains firm. CFTC data as of April 29 showed net long positions increased markedly to multi-month tops of around 75.8K contracts. Open interest also climbed to levels last seen in September 2024 but commercial hedgers stayed net short at roughly 131K contracts, reflecting cautious sentiment among corporates.
GBP under growing pressure
At the same time, the British Pound (GBP) is facing pressure due to growing expectations that the Bank of England (BoE) will lower interest rates by 25 basis points to 4.25% during its policy meeting on Thursday. The dovish sentiment stems from several factors: lingering global uncertainty tied to US tariffs, a weakening UK labour market, partly due to rising employer social security contributions, and softer-than-expected inflation figures for March.
Recap
What happened recently?
M+A is getting a much anticipated boost in recent weeks, with $30 billion of deals announced in early May. It suggests appetite is returning after the market turbulence of the last month. It's been difficult to land deals so far but it seems like they're finally coming to fruition. There's movement happening in our space too, with IFX announcing an agreement to acquire Argentex and Corpay was in talks to acquire the UK's Alpha Group, although an initial proposal has been rejected.
Looking forward
The big moments to track this week.
Monday - US ISM Manufacturing.
Tuesday - NZ Employment Change.
Wednesday - US Interest Rate update and commentary (which is when the interest rate is delivered as expected. Can often yield FX moves instead) + EUR Retail Sales.
Thursday - BoE Interest rate update and commentary.
Friday - CAD unemployment rate.
Here's what we're talking to our clients about
We’re always here to support. Here’s a sneak peek at some of the conversations we’re having with clients and how we’re helping them.
- Credit policy and mark-to-market
- FX and Payment market consolidation
- Where the GBPUSD may go next!
The contents of this article do not constitute financial advice and are provided for general information purposes only.
