Daily Analysis | Clear Treasury

Our daily analysis of EUR, GBP and USD.

DAILY ANALYSIS

GBP

The Bank of England voted to leave rates unchanged yesterday at 4.25 per cent, the vote was split 6-3 in favour of holding at the current level.
- BoE governor Andrew Bailey did signal a cut in rate could come as soon as August citing recent data of a softer labour market. Bailey commented ‘interest rates remain on a gradual downward path, although we’ve left them on hold today’.
- Bailey also commented on the uncertainty in the Middle East as well as the impact of Trump tariffs hindering growth stating ‘the world is highly unpredictable’.
Retail Sales for May released this morning will cause concern as MoM figures slumped to -2.7% falling far deeper into negative territory than the -0.5% forecast.
- The heavy decline in May resulted in YoY figures coming in at -1.3% versus 5% previous.
The lack of growth in the UK economy has somewhat been on the periphery of late as events outside of the UK take precedence, however, recent data is starting to highlight the extent of the UK’s economic sluggishness.
- Sterling has failed to be the benefactor of the shift away from the US dollar further enforcing investors' lack of confidence in the UK economy.
GBP/USD trades above 1.3465.

President Trump talking nuclear weapons has various outcomes, as the conflict between Israel and Iran increase Trump has waded in – after initially stating ‘he may or may not strike’ Iran, the Trump administration yesterday confirmed they will decide whether to engage ‘within the next two weeks…based on the fact there’s a substantial chance of negotiations may or may not take place with Iran’.
The Philadelphia Fed Manufacturing Survey for June will be released later this afternoon.
The Fed Monetary Policy Report will be released later today.
The global shift away from the greenback has been more evident in the last 24 hours as tension in the Middle East rises, the US dollar has failed to gain ground as we would have traditionally seen previously.
- EUR/USD returns above 1.1500.

Brussels are eyeing a UK-style trade deal with the US ahead of the July 9th deadline – German Chancellor Friedrich Merz commented that instead of reaching a full trade agreement by July 9th the EU are pushing for ‘a little along the model of the US-UK agreement’.
Eurozone Consumer Confidence for June will be released later today.
EUR/GBP trading below 0.8550.

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