Overnight, we’ve seen the U.S. Dollar strengthen after President Trump said he expects to reach a “great deal” with China’s President Xi when they meet later on Thursday. His comments lifted confidence across global markets after weeks of trade uncertainty with reports now suggesting that China’s state-owned COFCO bought several U.S. soybean shipments, which has added to the optimism that tensions may be easing.
The Australian Dollar has also strengthened, rising 0.3% to 0.6606, after stronger-than expected inflation data has now reduced the chances of a rate cut from the Reserve Bank of Australia next week.
Meanwhile, the Pound fell yesterday, with GBP/USD dropping to around 1.325 and GBP/EUR sliding to 1.138 — its lowest level since 2023. The fall came as investors grew more cautious about the UK economy, with weaker data and concerns over government finances which is increasing expectations that the Bank of England could cut interest rates again soon. We have also seen Bond Yields fall to their lowest levels in 2025, which albeit will breathe a sigh of relief for the government, will ultimately act as a deterrent for overseas investors in The UK.
Attention now turns to the Federal Reserve and the Bank of Canada, both expected to cut interest rates by 0.25% later today.
For the Fed, markets will be watching Jerome Powell’s comments for clues on whether more rate cuts could follow before the end of the year. With the U.S. economy showing signs of slowing and the government still shut down, Powell is expected to take a cautious approach.
The Bank of Canada faces similar challenges, with weaker growth and softer household spending putting pressure on policymakers to act. Any signal that more easing could come later in the year may weigh on the Canadian Dollar.
GBP/EUR 1.1339 GBP/USD 1.3210 GBP/AED 4.8535
GBP/AUD 2.0021 GBP/CHF 1.0516 GBP/CAD 1.8419
GBP/NZD 2.2850 EUR/USD 1.1633 GBP/ZAR 22.6015