Pound Sterling (GBP)

The British Pound found some support against the Euro as global investor sentiment turned more positive. Despite lingering worries about UK fiscal policy and weak domestic data, Sterling demonstrated strength in a risk-friendly market environment. The rally lacked a clear UK-specific trigger, indicating that broader market confidence and positioning were key drivers of the Pound’s early-week performance.

Euro (EUR)

The Euro declined after markets reacted to the EU-US trade agreement, which introduced moderate tariffs and stirred concerns among European exporters. Although initial reactions were hopeful, ongoing trade uncertainty, cautious market sentiment, and expectations of weaker Eurozone GDP weighed on the currency. Additionally, high carry costs, speculative positioning, and ambiguity around future ECB policy added downward pressure on the Euro at the start of the week.

U.S. Dollar (USD)

The U.S. Dollar gained strength in response to the EU-US trade deal, benefiting from eased trade tensions and improved market sentiment. Attention is now turning to the Federal Reserve’s policy outlook, with upcoming economic indicators—such as employment and inflation data—potentially shaping future interest rate expectations. While recent dollar gains may moderate, the currency is likely to remain firm unless the Fed signals a clear shift toward monetary easing.