Magna Financial Market Report – Wednesday 16th July 2025

16 July 2025

 

MARKET REPORT

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MARKET OVERVIEW

USD held firm as markets priced a lower chance of a second Fed rate cut, with PPI data in focus today. GBP edged higher after stronger-than-expected UK inflation, while EUR remained soft amid USD strength and lack of Eurozone catalysts. The CHF stayed resilient on safe-haven demand, supported by global risk aversion and strong reserve flows.

GBP

GBP hovered near its June lows against USD, testing critical technical floor for the currency pair. This level has historically acted as a stabilization point, and price action around it suggests market participants are watching closely either for a bounce or a breakdown.

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USD

The USD advanced into the close despite a fifth consecutive soft core CPI reading. While early gains reflected initial optimism, momentum faded as markets lowered the probability of a second Fed rate cut this year from near certainty to around 75%.

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EUR

EUR remains under pressure after slipping, following stronger US Treasury yields that supported USD. Markets are wary of rising US inflation and renewed tariff risks, which are damping risk sentiment and limiting EUR/USD upside. Technical indicators show bearish momentum, and without fresh Eurozone data or easing in US yields, EUR looks to remain capped for now.

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CHF

The CHF continues to strengthen as investors seek safe-haven assets. CHF/USD is slightly softer than recent highs but still holding firm amid global uncertainty . Forecast models expect modest USD/CHF depreciation through year-end. CHF strength is also supported by its rising share in global reserves, rebounding to levels not seen since 1999.

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TODAY

SUMMARY

Higher than anticipated UK inflation data has led markets to dial back expectations for Bank of England easing, now pricing in just two rate cuts this year. Headline CPI rose 0.3% MoM vs 0.1% forecast, with annual inflation at 3.6% and services CPI remaining elevated at 4.7%. GBP edged higher on the day, with attention now turning to tomorrow’s labour market report—strong numbers could help further stabilize GBP. 

Meanwhile, reports suggest Kevin Hassett is the leading candidate to replace Jerome Powell as Fed Chair, while Donald Trump is said to be preparing new tariffs on pharmaceuticals as early as August 1st. Focus today is on US PPI data; an upside surprise could reduce the likelihood of a second Fed rate cut and add fresh support for the USD. 

Key events later this week include UK retail sales, US jobless claims, and further Fed commentary.

HOW WE CAN HELP

Our experienced currency team is here to ensure you make the most of your international transfers. By gaining a clear understanding of your goals, we offer personalised support and recommend the most suitable strategies to help you navigate the currency market with confidence. Get in touch with Osman Hanif today on +44 (0) 20 3371 9200 or email osman@magnafinancial.com

Magna Financial

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