Spectrum FX Daily Report

GBP: The British Pound returned some of the recent gains it made against the Euro as the odds of an August interest rate cut at the Bank of England have risen. Nevertheless, the currency pair remains close to levels not seen since early 2022. Looking forward, market analysts warn of the potential for some UK election-inspired weakness, as is often the case when there is the potential for political uncertainty.

EUR: The Euro regained some lost ground yesterday amidst supportive developments in French politics. In fact, growing support for FN President Jordan Bardella will be important in determining how much further the Euro can recover in the coming days. Looking forward, Eurogroup meetings scheduled for today and tomorrow, pan-European Industrial Production figures, and several speeches from ECB policymakers will wrap up the trading week.

USD: The U.S. Dollar rose slightly in Asian trade as investors digested yesterday’s hawkish signals from the Fed. In fact, Chair Jerome Powell said the central bank now only saw the possibility of one rate cut this year, down from prior forecasts of three. However, the Fed’s comments were preceded by CPI data showing that inflation cooled slightly more than expected in May. Ultimately, the reading battered the dollar as investors bought into the disinflation narrative.

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