UK: Weekly FX Market Update 4 August
GBP
As US GDP improves, UK growth falters.
The Bank of England’s (BoE) next interest rate decision is on Thursday, with Bloomberg analysts suggesting a 0.25% rate cut.
However, with the CPI at 3.6%, will the BoE refrain? Or will they choose to support a slowing economy?
EUR
The Euro has been enjoying a strong period against the dollar and pound for much of 2025.
However, last week’s news revealed that the EU finalised a one-sided trade deal with the US.
The EU agreed to 15% tariffs on its exports while allowing US imports to enter ‘tariff-free’. The BBC reports that this could hit EU GDP by 0.5%.
USD
The tariff deadline on August 1st saw more trade deals agreed by the US and high tariffs levied on other countries.
The quarterly US GDP jumped higher by 3% and helped the dollar strengthen across the board.
Fed Chair Powell said they were 'at the early stages’ of assessing the effects of tariffs on the US economy.
On Friday, the US Non-Farm Payrolls data was released, showing a decline in July. Could this encourage the Fed to cut rates in September?
Main events for this week:
Mon Aug 4
09:30 EUR Sentix Investor Confidence
Tue Aug 5
15:00 USD ISM Services PMI
Wed Aug 6
17:45 USD FOMC Daly Speaks
Thu Aug 7
12:00 GBP Bank of England Interest Rate Decision/Statement/Vote
13:30 USD Unemployment Claims
15:00 USD FOMC Bostic Speaks
Fri Aug 8
12:15 GBP MPC Pill Speaks
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