UK: Weekly FX Market Update 27 May 2025
GBP
A combination of high UK Inflation, a hawkish Bank of England economist and strong UK retail sales data gave GBPUSD a boost to highs not seen since Feb 2022.
Will Bank of England Deputy Governor Lombardelli follow last week’s hawkish stance with CPI now at 3.5%?
Can the pound keep pushing higher over month end?
EUR
As EU officials regarding trade talks say ‘we are still not really getting anywhere’ President Trump recommends a 50% tariff on the EU starting June 1st & then delays the move until July 9th.
Meanwhile, ECB officials have been generally welcoming to see the recent Euro strength.
Q1 German GDP data outperformed, possibly due to advance orders before April 2nd tariffs were levied.
USD
With President Trump’s tax bill passing through the House of Representatives, will bond markets become unsettled again as they worry about the ever-growing budget deficit? The President wants to pass his bill into law before July 4th.
30-year Treasury yields are now close to levels seen just before the start of the 2007 crisis.
With Moody’s downgrading US debt, US-EU trade talks not being easy and July 8th bringing the end of the reciprocal tariff pause, can the US Dollar regain some composure, or will it all be too much and continue to weaken further?
Main events for this week:
Tue May 27
13:30 USD Durable Goods
15:00 USD CB Consumer Confidence
Wed May 28
03:00 NZD RBNZ Interest Rate Decision
03:10 GBP MPC Lombardelli Speaks
03:10 USD FOMC Waller Speaks
09:00 USD FOMC Kashkari Speaks
19:00 USD FOMC Meeting Minutes
Thu May 29
02:30 AUD CPI
13:30 USD Preliminary GDP/Unemployment Claims
13:30 USD FOMC Barkin Speaks
15:40 USD FOMC Goolsbee Speaks
21:00 USD FOMC Daly Speaks
Fri May 30
07:00 EUR German Preliminary CPI
13:30 USD Core PCE/Goods Trade Balance
13:30 CAD GDP
15:00 USD Revised UoM Consumer Sentiment/Inflation Expectations
17:20 USD FOMC Bostic Speaks
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