Pound Sterling (GBP)

The British Pound gained strength thanks to improved global trade sentiment, particularly following a trade agreement between the U.S. and Japan that helped ease market uncertainty. Increased investor willingness to take on risk and expectations that the Bank of England will be cautious in cutting interest rates also supported the currency. Analysts generally see the Pound as undervalued and believe it could rebound further if UK economic indicators stay solid.

Euro (EUR)

Meanwhile, the Euro is facing downward pressure as fading trade worries and rising risk appetite reduce demand for safer assets like the Euro. While it previously benefited from global trade tensions, recent U.S. trade deals and the possibility of a U.S.-EU agreement have shifted market sentiment. Even though the European Central Bank is likely to hold off on more rate cuts for now, investors are still wary about the Euro’s short-term prospects.

U.S. Dollar (USD)

The U.S. Dollar remains weak, hovering near recent lows, as markets welcome the U.S.-Japan trade deal, which helped ease fears about global tariffs by cutting duties on Japanese goods. The deal boosted optimism about future trade agreements. However, the Dollar has been in decline since tariffs were first imposed in April. Going forward, attention will turn to upcoming U.S. housing data and the Federal Reserve’s next meeting for more clues on the Dollar’s direction.