UK: Weekly FX Market Update 21 July 2025
GBP
Last week, UK claimant count data (employment) jumped disturbingly higher.
BoE Governor Bailey said there could be bigger cuts to interest rates if the jobs market continued to slow.
Will PMI data on Thursday and Retail sales on Friday continue the steady stream of negative UK economic releases and weaken the pound?
EUR
With the US now threatening a minimum 15% tariffs on EU goods, plus no reduction on 25% sectoral duties on cars, can the EU agree a trade deal with them by August 1st?
If not, will the president change his mind yet again, or will the EU be forced to retaliate with tariffs on US goods?
Will the European Central Bank hold rates steady at 2% on Thursday in preparation for a trade war between the US and EU?
USD
Last week, as rumours spread that the president was going to dismiss Fed Chair Powell, the US dollar quickly slumped lower by 1.5% across the board.
After the rumours were denied, the US dollar settled and finished higher on the week.
With the president continuing to undermine the Fed, inflation ticking but not jumping higher, will PMI data continue to support recent US dollar strength?
Main events for this week:
Mon Jul 21
All Day Japan Upper House Election Results
Tue Jul 22
10:15 GBP BoE Gov Bailey Speaks
13:30 USD Fed Chair Powell Speaks
Wed Jul 23
15:00 EUR Consumer Confidence
15:00 USD Existing Home Sales
Thu Jul 24
04:05 AUD RBA Gov Bullock Speaks
09:00 EUR Flash Manufacturing & Services PMI
09:30 GBP Flash Manufacturing & Services PMI
13:15 EUR ECB Interest Rate Decision/Statement
13:30 USD Unemployment Claims
13:45 EUR ECB President Lagarde Speaks
14:45 USD Flash Manufacturing & Services PMI
Fri Jul 25
07:00 GBP Retail sales
09:00 EUR German IFO Business Climate
13:30 USD Durable Goods
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