Tight fiscal conditions weighing on GBP

Daily Currency Update

Sterling slipped to around $1.3484, softening in the wake of the US–China trade talks and in anticipation of Chancellor Reeves’ upcoming spending review. Persistent concerns over the UK’s tight fiscal outlook continue to weigh on GBP sentiment. Meanwhile, UK Gilt yields climbed, reaching new highs among developed-market peers, as investors brace for a more constrained budgetary environment in the months ahead.

EUR/USD held steady near 1.1416, marginally weaker on the day, as the US dollar found stability following trade discussions between Washington and Beijing in London. While the talks offered modest direction, the absence of concrete outcomes kept broader risk sentiment muted. Uncertainty around key trade elements, such as rare earths policy, continues to temper any significant downside in the dollar.