Pound rises as trade optimism boosts risk appetite
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Daily Currency Update
Sterling edged higher against both the US dollar and the euro, buoyed by improved global market sentiment following the announcement of a trade agreement between the US and Japan. The deal lifted risk appetite, boosting equities and risk-sensitive currencies like the pound, which often benefits from optimism around global growth.The pound climbed to its highest level in nearly two weeks against the US dollar and is steadily retracing its path back toward the near four-year highs seen in early July. While domestic drivers remain key, this renewed appetite for risk is providing near-term support for GBP across the board in the FX market.
Key Movers
Markets showed limited reaction to the surprise announcement that US President Donald Trump will visit the Federal Reserve on Thursday, a move that raises tensions with Fed Chair Jerome Powell, whom Trump has repeatedly criticised for not cutting interest rates more aggressively. While the visit’s agenda remains unclear, the potential for political interference in monetary policy has caught the attention of investors, though currencies have so far remained relatively steady.Elsewhere, market focus remains on trade developments. According to EU diplomats, negotiations between the US and European Union are progressing toward a possible deal that may include a 15% baseline US tariff on EU goods, with room for certain exemptions. The outcome of these talks could have significant implications for the euro and broader risk sentiment.
Expected Ranges
- GBP/USD: 1.3505 - 1.3585 ▼
- GBP/EUR: 1.1485 - 1.1565 ▼
- GBP/AUD: 2.0455 - 2.0545 ▼
- EUR/USD: 1.1735 - 1.1815 ▲