Pound Sterling (GBP)

The Pound declined after UK GDP contracted by 0.1% in May, following a 0.3% fall in April—contrary to expectations of modest growth. Manufacturing and industrial production dropped significantly, with only limited support coming from a slight uptick in the services sector. Adding to the pressure were growing concerns over the UK’s rising debt levels and government spending. As confidence in the economic outlook fades, market expectations have shifted towards potential interest rate cuts, further weighing on the Pound.

Euro (EUR)

The Euro held relatively firm despite broader market volatility, underpinned by optimism surrounding a possible US-EU trade agreement. However, a decline in German wholesale prices has fuelled speculation that the European Central Bank could move to cut interest rates, which may eventually undermine the Euro. While reduced demand for safe-haven assets reflected improving global sentiment, the Euro was cushioned by hopes for stronger transatlantic trade ties and signs of resilience within the Eurozone economy.

U.S. Dollar (USD)

The US Dollar softened as market confidence improved, and the Federal Reserve continued to signal a more dovish stance. Optimism following a de-escalation in trade tensions, combined with growing expectations of a potential rate cut in July, put downward pressure on the Dollar. With no key economic data released domestically, the currency largely tracked overall shifts in risk sentiment. Looking ahead, any rise in US jobless claims could add further strain, especially if broader economic uncertainty continues.