Financial markets remained steady last week as investors responded to UK growth data and shifting trade dynamics. Sterling edged lower against the US dollar but held firm against the euro after stronger-than-expected UK GDP figures. While the data showed an improvement in manufacturing output, markets saw this as a temporary rebound rather than the start of a sustained recovery. Investors are now watching UK inflation data closely, which could influence the Bank of England’s next policy steps.
The US dollar lost ground early in the week after reports emerged that Washington may consider new tariffs on European imports. This reintroduced uncertainty into global trade forecasts and raised concerns over potential disruption in cross-border investment. While no final decision has been made, even the suggestion of renewed trade friction has prompted a reassessment of dollar risk, especially when compared with more stable currencies.
The euro strengthened on the back of this, gaining against the dollar as markets factored in reduced US trade appeal. In periods of uncertainty, investors often favour larger, more stable currency zones, and the euro benefitted from this rotation. EU-US trade relations will remain in focus, with potential consequences for regional equities and fixed income assets tied to export sectors.
Finseta Plc (LON:FIN), formerly Cornerstone FS PLC, is a United Kingdom-based foreignexchange and payments company offering multi-currency accounts and payment solutions to businesses and individuals through its global payments network.
