UK Rate Expectations and Economic Outlook for EUR

The Eurozone's PMI figures, released last Friday, slightly exceeded expectations, but they still indicated a significant contraction in economic activity. This has raised concerns about the possibility of negative GDP growth in the second half of the year.

EUR: Focus on inflation this week.

The Eurozone's PMI figures, released last Friday, slightly exceeded expectations, but they still indicated a significant contraction in economic activity. This has raised concerns about the possibility of negative GDP growth in the second half of the year. CFTC data reveals that net long positions in EUR/USD have been reduced even further, falling below 15% of open interest for the first time since October 2022 in the week leading up to the Federal Reserve (Fed) meeting. The Fed's hawkish stance and the absence of positive economic news from the eurozone likely encouraged speculators to continue unwinding their long euro positions.

Later this week, the eurozone's Consumer Price Index (CPI) releases could be a critical event for the euro. A surprise increase in CPI could rejuvenate expectations for another European Central Bank (ECB) interest rate hike this year.

However, unless there is a bullish CPI outcome for the euro, it appears that EUR/USD is poised to test the 1.0600 level, with the risk leaning towards a drop to 1.0500 in the short term. Nevertheless, the euro's responsiveness to ECB speakers has been relatively muted recently.

GBP: Weak PMIs suggest rates have peaked.

The British pound is on course to be the weakest among G10 currencies in the third quarter. This decline has been driven by a significant adjustment in expectations for domestic interest rates, following the Bank of England's decision to pause its rate hikes. The PMI data released on Friday unequivocally justified the BoE's choice to keep rates unchanged, as the numbers were lower than anticipated and signalled greater economic challenges for the UK in the third quarter.

Prior to the November meeting, the Bank of England will receive one more set of inflation and wage data. However, economics team from ING now predicts that the central bank will maintain its current stance, signalling the end of the tightening cycle in the UK. Market sentiment aligns with this projection, with only a 25% chance of a rate hike in November and a 50% probability of an increase by December.

This week, the UK is not slated to release any major economic data, aside from the final second-quarter GDP figures. Additionally, there are only two scheduled speakers from the Bank of England. While EUR/GBP has surged to 0.8700, it may struggle to maintain these gains, primarily because a substantial portion of the dovish adjustment in the Sonia curve has already occurred. Moreover, the euro's momentum is currently subdued. In the case of GBP/USD (Cable), the risks are tilted toward a test of the crucial 1.2000 level soon if the US dollar remains strong.

This content may have been written by a third party. ACY makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied by any third-party. This content is information only, and does not constitute financial, investment or other advice on which you can rely.

Regulacja: ASIC (Australia), FSCA (South Africa)
read more
ATFX Market Outlook 10th July 2025

ATFX Market Outlook 10th July 2025

U.S. President Donald Trump announced new tariffs on seven countries, stating earlier this week that a 25% tariff would be imposed on Japan and other trade partners starting in August. Despite this, Wall Street closed higher on Wednesday, with the tech-heavy Nasdaq leading the gains.
ATFX | 16g 9 minut temu
ATFX Market Outlook 9th July 2025

ATFX Market Outlook 9th July 2025

On Tuesday, U.S. President Donald Trump escalated the global trade war by announcing a 50% tariff on imported copper and reiterated that long-threatened tariffs on semiconductors and pharmaceuticals are also imminent. U.S. equities ended mixed as investors awaited further clarity on trade policy. The Dow Jones Industrial Average fell 0.37%, the S&P 500 dipped 0.07%, while the Nasdaq edged up 0.03%
ATFX | 1 dni temu
EUR/USD Declines as Markets Await US Tariff Developments

EUR/USD Declines as Markets Await US Tariff Developments

The EUR/USD pair dropped to 1.1746 on Tuesday, with the US dollar holding a slight edge before correcting. The greenback faced pressure after Donald Trump announced new tariffs on 14 countries that have yet to secure trade agreements with the US.
RoboForex | 2 dni temu
ATFX Market Outlook 8th July 2025

ATFX Market Outlook 8th July 2025

U.S. President Trump signed an order delaying “reciprocal” tariffs from July 9 to August 1 and warned of steep hikes from that date, escalating trade tensions. U.S. stocks closed sharply lower, with the Dow down 0.94%, the S&P 500 falling 0.79%, and the Nasdaq dropping 0.92%. Tesla also tumbled after Elon Musk announced plans to launch a new political party.
ATFX | 2 dni temu
Gold Struggles for Direction as Risk Mood Sours | 7th July, 2025

Gold Struggles for Direction as Risk Mood Sours | 7th July, 2025

On July 7, gold slips below $3,350 as the USD strengthens and traders take profit amid tariff-related jitters. Silver lingers under $37. EUR/USD and NZD/USD retreat on weak sentiment, while USD/CAD rises above 1.3900 as oil weakens. Markets brace for key data including US CPI and Eurozone retail sales, with Fed speeches also in focus.
Moneta Markets | 3 dni temu
ATFX Market Outlook 7th July 2025

ATFX Market Outlook 7th July 2025

U.S. dollar weakened against major currencies after President Trump’s landmark tax cut bill was passed, amid mounting pressure on countries to strike trade deals with Washington. As markets brace for the July 9 tariff deadline—targeting countries like Japan that have yet to reach agreements—the dollar index slipped 0.1% to 96.92.
ATFX | 3 dni temu