Currency news / June 2, 2025

Trade tensions back in focus

3 min read Thanim Islam

Thanim IslamJune 2, 2025

Market snapshot:

China and US at loggerheads again
Dollar trades weaker once again

Currency recap

Trump was on the wires on Friday, stating that China had “violated its agreement” with the US. Jamieson Greer, Office of the United States Trade Representative, clarified that China isn't removing trade countermeasures quick enough. There was an initial drop in risk assets before moves settled down - by the end of European trade, markets finished relatively flat and the dollar marginally stronger.

German CPI numbers and the US core PCE numbers both came in as expected.

Today's GBP rates

Currency pair	Daily move*	Indicative rate**
GBPAUD	0.05%	2.0954
GBPCAD	-0.48%	1.8536
GBPCHF	-0.20%	1.1078
GBPDKK	0.10%	8.8628
GBPEUR	0.10%	1.1881
GBPJPY	0.03%	194.651
GBPNOK	0.85%	13.7845
GBPNZD	-0.05%	2.2589
GBPSEK	0.45%	12.9549
GBPUSD	-0.03%	1.3488

*Daily move - against G10 rates at 7:00 am, 02.06.25
** Indicative rates - interbank rates at 7:00 am, 02.06.25

Key data points

Currency	Event	Period	Consensus	Previous
USD	ISM Manufacturing	May	49.20	48.70
USD	ISM Prices Paid	May		69.80
USD	ISM New Orders	May		47.20
USD	ISM Employment	May		46.50

Today's speeches

USD: Fed Logan, Goolsbee, Powell
GBP: BoE Greene and Mann

What we think

USD starts the week on the back foot due to renewed trade tensions. China's Ministry of Commerce issued a statement accusing the US of violating its recent trade deal. Donald Trump vowed to double steel and aluminium levies to 50%, with the change set to take effect on Wednesday. The UK is said to be urging Trump to apply their zero-tariff accord. The EU has also spoken out against the latest announcements, threatening countermeasures.

This week's main focus will fall on Friday's US job numbers, where markets will be watching for signs of cracks in the job market due to tariffs and trade policy uncertainty. Markets are expecting the numbers to show signs of a cooling job market. Before that, we have ISM manufacturing numbers on Monday, and service sector numbers on Thursday - also expected to be soft in light of trade policy uncertainty.

Closer to home, the ECB will likely cut rates by 25bp on Thursday, and before then, on Tuesday, CPI numbers are expected to show cooling inflationary pressures in the Eurozone.

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