US dollar steady as markets brace for tariff deadline
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Daily Currency Update
The US dollar held within a narrow range on Tuesday morning, stabilising after a brief dip earlier in the week, as traders remained cautious ahead of the looming August 1 trade deadline. With the threat of steep US tariffs hanging over unresolved trade negotiations, FX markets are bracing for potential volatility, particularly across USD pairs. Any signs of progress, or lack thereof, could trigger sharp moves as investors change expectations around global trade, growth, and safe-haven demand for the US dollar.Key Movers
In the UK, upcoming flash PMIs and retail sales data are in focus, with expectations for the strongest services growth in nearly a year and a weather driven rebound in retail sales, both of which could offer near-term support for GBP.Meanwhile, the Bank of England may pause long dated bond sales due to weak demand, adding to speculation around a more cautious policy stance. While traders have slightly pared back BoE rate cut expectations - two cuts in 2025 remain priced in - keeping the pound data-sensitive and reactive to rate outlook shifts.
Expected Ranges
- GBP/USD: 1.3445 - 1.3515 ▲
- GBP/EUR: 1.1485 - 1.1565 ▼
- GBP/AUD: 2.0635 - 2.0725 ▼
- EUR/USD: 1.1655 - 1.1735 ▲