Last week, markets had plenty to digest across various topics, including geopolitical developments, trade and tariff announcements, inflation data, and central bank commentary. Despite these factors, investor sentiment remained upbeat throughout the week.
Currency markets saw a notable softening of the US dollar. While the greenback has shown weakness at various points in recent weeks, last week saw a more pronounced decline, with the dollar down 1.5-2.0% across major exchanges.
This downward trend was further supported by a ‘risk-on’ atmosphere, reducing demand for the dollar’s traditional safe-haven appeal. Additionally, shifting interest rate expectations played a role. The US Federal Reserve’s rate projections for this year slipped by around 10 basis points, partly reflecting market sentiment that no further changes to US tariff policy are likely. In contrast, rate expectations in the Eurozone and the UK firmed by 7-10 basis points.
Looking ahead, this week’s key macroeconomic highlights include flash PMIs, UK employment data, and the release of the latest Federal Reserve meeting minutes. Investors will also be watching closely for any fresh trade and tariff news that could shape market movements.
For businesses seeking to stay ahead of currency fluctuations and economic developments, expert insights are invaluable. If you’d like to explore how these trends could impact your business or identify opportunities in market volatility, get in touch with our specialists today.