Pound plummets on dovish BoE commentary
Philip McHugh July 3rd 2025 - 2 minute read
Pound (GBP) pressured by dovish BoE remarks
The pound (GBP) tumbled through Wednesday’s session, after the Bank of England’s (BoE) Alan Taylor suggested the UK’s ‘deteriorating’ economic outlook warrants more aggressive monetary easing from the bank.
These losses then accelerated amid some uncertainty over the future of UK Chancellor Rachel Reeves, following Prime Minister Keir Starmer’s reluctance to offer her his support during Prime Minister’s Questions.
Sterling may remain under pressure through today’s session as questions over Reeves’s future have triggered a sharp rise in UK yields.
Euro (EUR) gains tempered by rise in unemployment
The euro (EUR) trended broadly higher on Wednesday, as a cautious market mood bolstered the single currency’s safe-haven appeal.
Capping these gains, however, was the Eurozone’s latest unemployment report, which reported a surprise uptick in the bloc’s jobless rate in May.
The minutes from the European Central Bank’s (ECB) latest meeting are likely to determine the direction of the euro today. If policymakers indicate that interest rates are nearing their neutral level, it may help bolster the EUR exchange rates.
US dollar (USD) rebounds despite abysmal employment data
The US dollar (USD) bounced off multi-year lows yesterday, as the currency’s recent losses made it more attractive to price-conscious investors.
However, the dollar’s upside potential remained limited in the wake of the latest ADP employment figures, following a shock decline last month.
If today’s more influential non-farm payroll report also disappoints, the US dollar could test new lows later this afternoon.
Canadian dollar (CAD) bolstered by oil price rally
The Canadian dollar (CAD) strengthened on Wednesday, with the commodity-linked currency rising in tandem with global oil prices.
Coming up, the ‘loonie’ could face headwinds today, if Canada’s latest trade figures report that friction between the US and Canada continued to impact exports in May.
Australian dollar (AUD) knocked by lacklustre trade data
The Australian dollar (AUD) faced selling pressure overnight on Wednesday, as a sharp decline in export growth led to a halving of Australia’s trade surplus in May.
New Zealand dollar (NZD) undermined by risk-off flows
The New Zealand dollar (NZD) also weakened in overnight trade as a cautious market mood saw investors largely shun the ‘kiwi’.
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Written by
Philip McHugh