USD sold off aggressively on Friday evening after Trump announced intentions for substantial tariff increases in response to China’s imposition of port fees on US vessels and the initiation of a Qualcomm investigation.
JPY gained on the USD selling flow.
President Macron named a new cabinet over the weekend after reappointing Sebastian Lecornu as PM, with the aim to ease the potential for a political crisis and pass a budget.
*Daily move - against G10 rates as of 06:00 BST, 13.10.25
** Indicative rates - interbank rates as of 06:00 BST, 13.10.25
The market sell off on Friday has eased this morning, with equities bouncing back and the USD sell off on Friday easing after the Trump administration showed openness to a deal with China.
Analysts at Goldman Sachs anticipate a gradual thaw in US-China trade relations, with both countries likely to maintain a conciliatory stance and extend the tariff freeze established in May.
For the week ahead, UK data paints a mixed picture. The job market is stabilising but wage growth is cooling – slipping to 4.5% in the three months to August. GDP is expected to deliver only a marginal 0.1% uptick for August, as fiscal headwinds and budgetary uncertainties increasingly weigh on momentum. With the job market soft but steady, the BoE is firmly in wait-and-see mode through the rest of 2025.
Meanwhile, Eurozone inflation remains sticky – headline up to 2.2%, core stuck at 2.3% – backing the ECB’s cautious tone on rate cuts.
With UK data softening and rate cuts off the table, GBP looks vulnerable, especially against the USD and EUR where inflation risks linger and growth differentials favour the other side.
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