Magna Financial Market Report – Friday 9th May 2025
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• GBPEUR reaches 1-month high after BoE shift
• Dollar strengthens ahead of crucial US-China talks
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RECAP
The pound strengthened yesterday following a nuanced outcome from the Bank of England’s latest meeting. While the expected 0.25% interest rate cut was delivered, the internal vote revealed surprising divisions among policymakers.
In total, seven members backed the 0.25% cut, aligning with market forecasts. However, two members pushed for a steeper 0.50% cut, while two others unexpectedly voted to keep rates unchanged. This unexpected hawkish tilt has prompted markets to dial back expectations, with only two additional rate cuts now projected by the end of the year.
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SUMMARY
The U.S. dollar opened the day on firm footing, supported by anticipation surrounding this weekend’s high-stakes trade discussions between the U.S. and China. Market sentiment has been buoyed by reports indicating Washington may consider reducing tariffs on Chinese goods to below 60%, contingent on the outcome of the talks.
Technical pressure is also playing a role, with both GBP/USD and EUR/USD breaching significant support levels—pointing to potential further declines. However, any continuation of these moves will likely hinge on upcoming fundamentals. Constructive developments over the weekend could act as a catalyst for additional dollar strength in the near term.
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HOW WE CAN HELP
Our team of currency experts are here to help you get more from your money when making international payments. We will work with you to understand your payment needs and offer specialised guidance on the best options available to you. Get in touch with Osman Hanif today on +44 (0) 20 3371 9200 or email osman@magnafinancial.com
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