Pound Sterling (GBP)

The British Pound climbed to its highest level of 2025 against the U.S. Dollar after UK inflation unexpectedly rose to 3.5% in April, with services inflation reaching 5.4%. Despite this, concerns about stagflation and sluggish equity markets curbed the Pound’s gains against the Euro. Still, the stronger inflation figures strengthen the argument for keeping interest rates elevated, offering support to the Pound.

Euro (EUR)

The Euro remained stable, buoyed by optimism surrounding the UK–EU summit and steady inflation across the Eurozone. Core inflation in the bloc edged up to 2.7%, while headline inflation held at 2.2%, reinforcing confidence in the currency. However, the Euro could come under pressure if Germany’s producer prices continue to decline.

U.S. Dollar (USD)

The U.S. Dollar continues to struggle amid persistent concerns over trade tensions, fading investor confidence, and a recent Moody’s downgrade of the U.S. credit rating. Analysts see little chance of a near-term rebound, with a broadly bearish outlook driven by expectations of Fed rate cuts and a shift in capital away from U.S. assets.