Currency news / June 26, 2025

Dollar slips as Trump mulls replacing Powell early

3 min read Thanim Islam

Thanim IslamJune 26, 2025

Market snapshot:

GBPUSD, EURUSD hit new highs

Yesterday's currency recap

Federal Reserve (Fed) Chair Jerome Powell gave another hawkish message to the market by suggesting that if the Fed make a mistake in its monetary policy then people will pay for a long time, hinting that perhaps that if the Fed don’t act sooner then consumers are likely to be in trouble.

He also stated that Fed officials are still trying to gauge the impact of tariffs on consumer sentiment. Whilst dollar selling was not as aggressive as Tuesday, the currency still finished modestly lower.

Today's GBP rates

Currency pair	Daily move*	Indicative rate**
GBPAUD	0.04%	2.0987
GBPCAD	0.30%	1.8741
GBPCHF	0.18%	1.0983
GBPDKK	0.02%	8.7498
GBPEUR	0.02%	1.1728
GBPJPY	0.55%	198.408
GBPNOK	0.36%	13.8331
GBPNZD	-0.14%	2.2633
GBPSEK	-0.11%	12.9592
GBPUSD	0.17%	1.3639

*Daily move - against G10 rates at 7:00 am, 26.06.25
** Indicative rates - interbank rates at 7:00 am, 26.06.25

Key data points

Currency	Event	Period	Consensus	Previous
USD	GDP QoQ	Q1 (3rd est.)	-0.20%	-0.20%
USD	Core PCE QoQ	Q1 (3rd est.)	3.40%	3.40%
USD	Initial Jobless Claims	Jun 21	243,000	245,000

What we think

The US dollar and treasury yields fell further over night after the Wall Street Journal reported that Trump is considering naming an early replacement for Jerome Powell. The odds for three rate cuts from the Fed this year has now increased from 30% to 52% on the bet that the next Fed chair will be more dovish than Jerome Powell. The people in mind are said to be Kevin Hassett, former Fed governor Kevin Warsh, Scott Bessant, David Malpass and current Fed governor Chris Waller.

Going into month end, the weakness of the dollar will remain in focus especially with the Fed’s preferred measure of inflation, core PCE, due out Friday. Month-end flows are also suggesting more dollar selling as traders attempt to rebalance their portfolios. EURUSD currently sits at the highest level since Sept 2021 and GBPUSD at the highest since February 2022.

Read more about the Federal Reserve's interest rate decisions here:

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