UK: Weekly FX Market Update 19 May 2025
GBP
Will the UK-EU summit held today (Monday 19th) provide a positive boost for sterling?
With US CPI falling last week, will UK CPI follow suit on Wednesday?
What does the UK consumer think of the tariff noise and trade deals? We shall find out on Friday when retail sales data is released.
EUR
European Trade Commissioner Sefcovic spoke to US Commerce Secretary Lutnick last week and agreed to intensify engagement over trade.
The EU have stated that they will not accept ‘reciprocal’ tariffs and has readied a list of €95 billion of US imports that could face tariffs.
Flash Manufacturing and Services PMI data is released on Thursday, which should help investors gauge how the economy is dealing with US tariffs.
USD
Last Friday, President Trump announced that due to time constraints, trading counterparts would receive a letter over the next two to three weeks with their tariff rate included as a price to do business in the US. Tariffs are currently around 18%. No one knows what the new rate will be, or what the markets’ reaction will be. One thing that is often seen; markets don’t like uncertainty.
Despite the US Administration denials that they are seeking to weaken their currency, media sources report that they are discussing foreign exchange policies with South Korea.
US CPI slipped lower last week. However, Fed Board Member Barr warns of possible tariff induced stagflation to come.
Main events for this week:
Mon May 19
All Day CAD Bank Holiday
All Day UK-EU Summit
10:00 EUR Final CPI
13:30 USD FOMC Bostic Speaks
18:15 USD FOMC Logan Speaks
Tues May 20
05:30 AUD Reserve Bank of Australia Interest Rate Decision
09:00 GBP MPC Member Pill Speaks
13:30 CAD CPI
15:00 EUR Consumer Confidence
18:00 USD FOMC Musalem Speaks
Wed May 21
07:00 GBP CPI
Thu May 22
07:00 GBP Public Sector Net Borrowing
09:00 EUR Flash Manufacturing & Services PMI
09:30 GBP Flash Manufacturing & Services PMI
11:50 GBP MPC Breeden Speaks
13:00 GBP MPC Dhingra Speaks
13:30 GBP MPC Pill Speaks
13:30 USD Unemployment Claims
14:45 USD Flash Manufacturing & Services PMI
Fri May 23
07:00 EUR German Final GDP
07:00 GBP Retail Sales
13:30 CAD Retail Sales
15:00 USD New Home Sales
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