Over the past two weeks, the GBP has strengthened against the USD, touching one of the highest points in 3 years and seeing a near on 6% rise YTD as we close in to 1.3300. This movement is supported by stable UK labour market data with unemployment holding at 4.1% and claimant count lower than expected, despite a slight dip in wage growth.
Meanwhile, the euro surged to a three-year high against the dollar, reaching 1.1400+, witnessing a 5% gain since early April. This has been driven by shifting investor sentiment amid U.S. trade policy uncertainties. The euro also strengthened by over 3.5% against the GBP, fueled by safe-haven flows amid global economic uncertainty due to the trade war between US/China.
The USD weakened as investors sought safer currencies such as the EURO and GBP, reacting to the uncertainty surrounding U.S. trade policies and the potential impact of tariff exemptions. As concerns over global trade tensions increase, the USD lost some of its appeal, further exacerbated by a lack of clear direction in U.S. economic policy.
Will Trump be able to bring some tranquility back to the market and negotiate with China accordingly as well as set out a clear path for the US market?
