25/05 – Dollar declines continue

25/05 – Dollar declines continue

GBP: Needs BOE help for further gains

EUR: Moving higher

USD: Still on the back foot


In the absence of any real sterling news flow, the pound was left to its own devices yesterday and we open up today roughly where we started the week. As noted yesterday, comments from the Bank of England on rate rises are becoming more and more crucial for the pound given the divergence between UK economic data and the policy narrative emerging from Threadneedle St.

One risk that we wish to flag from a political point of view tomorrow is the testimony of former Downing St Chief Advisor Dominic Cummings. The pound is a political currency and Cummings’ “bombshells” could be enough to generate some volatility.


The euro has been the big winner in the past 24hrs, driving higher against both the GBP and USD. Today’s IFO number from Germany could generate a hint of profit taking if it misses estimates but a wider pick-up in European sentiment could easily see the single currency continue to new highs.

US dollar

US data yesterday eased a little of the pressure on Federal Reserve members to talk up the chances of the need for a stimulus taper. The dollar weakened slightly overnight as four Fed members speaking yesterday declined to increase the volume on chatter the Federal Reserve will need to reduce stimulus soon.


As if by magic, the yuan has strengthened to the highest level since 2018 against the USD overnight. We expect the market to further test the People’s Bank of China’s pledge to keep the yuan basically stable. Away from the yuan this will further affect the USD on a trade-weighted basis.

Market rates

Today’s interbank rates at 08:17 against sterling. Movement vs yesterday.

Euro€1.158 ↓
US dollar$1.419 ↑
Australian dollar$1.826 ↓
South African randR19.66 ↑
Japanese yen¥154.2 ↑

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Jeremy Thomson-Cook

Jeremy Thomson-Cook

Jeremy has over 13 years experience working in the FX industry. As a specialist in political risk mitigation and currency hedging, he regularly advises clients on the day-to-day moves of the markets and the implications of fiscal and monetary policy on international businesses.