Magna Financial Market Report – Friday 11th July 2025

11 July 2025

 

MARKET REPORT

To talk to us about your next trade, call +44 (0) 20 3371 9200

MARKET OVERVIEW

The USD held firm after fresh tariff threats and ahead of key July inflation data, while Jamie Dimon flagged a 40-50% chance of rising US rates due to tariff-driven inflation. Meanwhile, the CAD weakened further amid trade tensions, the EUR drifted down on widening Fed-ECB divergence, and GBP remained steady as the Bank of England weighed financial stability risks.

GBP

GBP weakened following UK economic data this morning showing a surprise 0.1% contraction in GDP for May. The reading marked a second consecutive monthly decline, defying expectations of a modest rebound after April’s sharper -0.3% fall and raising concerns about the UK’s growth momentum.

­

USD

The USD climbed to a two-week high after President Trump announced a 3.5% tariff on Canadian imports from August 1, surpassing market expectations. He also signaled a letter to the EU by Friday and proposed raising tariffs to 15-20% on other countries, up from the current 10% rate.

­

EUR

Germany exports to the US dropped 7.7% in May, following a sharper 10.5% decline in April, highlighting the growing strain from US trade tariffs. Head of the German trade federation, described it as dramatic and warned it could worsen unless a fair deal for Europe is secured.

­

CAD

The CAD slipped after Trump announced a 3.5% tariff on all Canadian imports from August 1, raising concerns over trade disruptions. The loonie came under additional pressure as investors shifted towards the USD amid rising global trade tensions.

­

TODAY

SUMMARY

Markets have shifted focus away from tariff tensions to next week’s US inflation report, which is expected to reveal the strongest monthly rise since January. A hotter-than-expected CPI print would remind investors that the Federal Reserve may have limited room to cut rates as aggressively as currently priced. With the USD down nearly 7% since Trump’s “Liberation Day”, a strong inflation reading could spark a meaningful rebound in the currency.

Adding to the caution, JPMorgan CEO Jamie Dimon surprised markets by suggesting there’s a 40-50% chance US interest rates could rise further, citing inflationary pressures from tariffs, immigration policy, and widening budget deficits. This contrasts sharply with market expectations, which are still pricing in six rate cuts by the end of next year.

Looking ahead, all eyes are on the US CPI release on July 15, alongside commentary from Fed officials. A strong inflation number could drive Treasury yields higher and strengthen the USD further, while a soft print may revive rate-cut expectations and keep the USD on the back foot.

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

­