After moving in lockstep on Tuesday, the pound and euro separated with GBP gaining 0.2% on the EUR. However, it was another day of gains for the dollar, which climbed nearly 0.3% on the pound and over 0.5% on the euro.
UK Chancellor Rachel Reeves has revealed plans to reform the UK pension industry. These include creating £25bn “megafunds” which must direct a portion of their investments into local businesses, encouraging growth.
Wednesday saw the dollar continue to gain in value against the pound and euro, eating back some of the losses in recent weeks. Though, it’s unclear what this morning’s news – that the US Court of International Trade has ruled US president Donald Trump’s “liberation day” tariffs illegal – will mean for the day’s trading. Though Asian stock markets are already seeing growth in response.
The court found that Trump misused emergency powers to implement his tariff scheme. The ruling covers all the blanket “reciprocal tariffs”, but not the targeted tariffs on the steel and automotive industries. The Trump administration says it will appeal the ruling.
Tomorrow will see the US bureau of Economic Analysis publish the latest GDP growth rate figures, numbers that will begin to show the impact of Trump’s tariff regime. Current forecasts show US growth slowing.
Eurozone data revealed several small knocks to the bloc’s economy, which may account for the euro’s weak performance on Wednesday.
France’s rate of GDP growth has slowed, it also saw the third consecutive month of producer prices falling – the sharpest decline since April 2024 – yet, across the eurozone, consumers are still expecting inflation to rise. The two numbers together suggest a less active market for sellers as they contend with more cautious buyers.
Further data for other countries in the eurozone will be revealed today and tomorrow, which will show if France’s economy is an outlier or the trend.
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