Magna Financial Market Report – Friday 16th May 2025
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Dollar consolidates amid uncertainty over US FX policy
GBP/EUR trades at one-month high, maintaining recent gains
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RECAP
Retail sales and Producer Price Index (PPI) data for April came in below expectations, contributing to a modest decline in the U.S. dollar yesterday. However, there was no clear directional trend across major dollar pairs, as markets continued to process the developments and data releases from earlier in the week.
Monday saw initial demand for the dollar following reciprocal tariff reductions by both the U.S. and China. This upward momentum was tempered by market speculation that the U.S. might consider measures to weaken the dollar as part of trade negotiations rumors that have since been officially denied.
Meanwhile, the British pound remained well supported against G10 currencies, bolstered by stronger-than-expected GDP figures released earlier in the day.
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SUMMARY
The week concludes on a quiet note, with no significant economic data releases expected today. The U.S. dollar continues to consolidate as earlier optimism stemming from U.S.-China developments has gradually diminished.
Market participants are now contending with ongoing uncertainty over the potential for a weaker dollar policy from the Trump administration, despite repeated official denials. As a result, notable movements in the FX market may be limited until further clarity emerges next week.
On a positive note, GBP/EUR is trading at a one-month high, having retraced much of the decline prompted by earlier remarks from President Trump.
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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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