Yesterday, GBP decline continued on persistent concerns over the UK economy, leading to markets increasing the odds of a third rate cut this year to 35%. It is worth noting, we have UK CPI numbers tomorrow, followed by job numbers on Thursday - this could well add to these rate cut pressures and pile further pressure on GBP.
USD held onto gains, and the EUR faired better than expected given the US/EU tariff conflict. The EU has prepared a €72bn list of countermeasures targeting US goods but remains confident that they will reach an agreement with the US by the 1st August deadline.
*Daily move - against G10 rates at 7:00 am, 15.07.25
** Indicative rates - interbank rates at 7:00 am, 15.07.25
US CPI is the key data metric for today, with expectations of a slight uptick in June. Anything to embolden the hawks out there should add to continued dollar gains. However, it is worth remembering that the Fed is under immense pressure from the White House to slash interest rates, and, no doubt regardless of the number today, we will see comments towards Fed Chair Powell from Trump.
Today, we have Governor Bailey speaking at Mansion House. Over the weekend, Bailey suggested that the BoE will be prepared to make larger rate cuts, should the job market show a pronounced slowdown. Chancellor of the Exchequer, Rachel Reeves will also be speaking, with traders keeping a keen eye on any mention of tax increases. GBPUSD currently sits at a three week low and GBPEUR is back at the lows seen in April.
As mentioned above, tomorrow morning's UK CPI numbers could add further pressure on the pound.
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