We had a volatile end to the week as Trump hit the European Union with 30% tariffs planned to kick in on 1st August. This led to a decline in US and EU indices. The EU is keen on working with the US for a swift resolution before the deadline, however, they’re hedging their bets by starting communications with other countries heavily impacted by tariffs, such as Japan and Canada.
Turning to the UK, GBP performance has started to dip after doubts that the shape of the UK economy has slipped, with gilts riding high during last week and GDP data unexpectedly printing at -0.1%. This meant sterling had a torrid end to the trading week and doesn’t look to be in a better shape this morning.
Previously, major tensions in the Middle East and Trump's trade wars had taken centre stage, the pound had been masked, mostly by US dollar weakness, however, we are now seeing some attention turn back to sterling markets.
*Daily move - against G10 rates at 7:00 am, 14.07.25
** Indicative rates - interbank rates at 7:00 am, 14.07.25
It could be another tough week for GBP as we have UK CPI and Jobs numbers due Wednesday and Thursday. If we see inflation remaining sticky, with concerns of stagflation rising, pairing alongside with some positive talks between the US and EU tariff tensions, GBPUSD could see another downward move. However, previously we saw the pairing in a similar position in June and it went on to reach highs last seen in 2022, meaning - don’t believe the dollar’s strength is guaranteed to stay.
Other key data points in the week point towards the US as they release inflation numbers and Retail Sales.
Our team of currency experts are here to help you get more from your money when making international payments. We will work with you to understand your payment needs and offer specialised guidance on the best options available to you. Over the last 19 years we’ve helped over a million customers and last year alone processed over £12bn. We’re tried and trusted, and we’re ready to help you.
Have a great day.
