Markets were driven last week by developments on both sides of the Atlantic, with a surprise US-UK trade agreement grabbing the spotlight.
While the Fed held rates steady and the BoE delivered a rate cut, the monetary policy moves were largely overshadowed by the trade breakthrough. Despite the historic nature of the deal, market reaction was muted, as investors digested the detail and weighed its real-world impact.
Sterling and the US Dollar emerged as the top performers, benefiting from trade optimism and political clarity. The Dollar rose for a third consecutive week, with the DXY gaining 0.4% to close at 100.424, while Sterling gained despite the rate cut, helped by the unexpected 7-2 voting split.
In contrast, the Canadian Dollar lagged, dropping 0.9% amid mixed commodity sentiment. The Kiwi and Aussie also softened, both falling around 0.5%. NOK was the strongest among commodity currencies, up 0.4%. The Euro was flat, as a quiet data calendar left it directionless. Meanwhile, safe havens Yen and Swiss Franc both fell 0.5%, as risk appetite improved. The Mexican Peso rose 0.7% on solid sentiment and yield support.
The US-UK trade agreement, while symbolically important, offered a realistic glimpse into the US administration’s evolving trade policy. The 10% baseline tariff on UK exports is likely to serve as the floor in upcoming negotiations with other trading partners, reinforcing the view that future deals will prioritize US market access over tariff elimination.
Equities were cautious, despite early excitement. The S&P 500, NASDAQ, and DOW all closed the week in the red, while WTI crude rallied 4.5% to close at $61.00, lifted by optimism but still facing structural headwinds. Bond yields rose, with the 10-year UST climbing 7bps to 4.38%, while the Bund yield edged lower.
The Week Ahead:
All eyes remain on Donald Trump and global trade negotiations, especially the potential for a US-China deal. While progress has been made with the UK, and signals with China have improved, markets remain cautious.
This week brings a heavy economic calendar:
- US CPI (key inflation barometer)
- GDP prints from UK, Eurozone, Japan, and Norway
- With positioning still short and sentiment improving, a confirmed US-China breakthrough could drive a sharp risk-on rally. Until then, volatility remains anchored to headlines.
Weekly Majors’ Market Performance
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The post Sterling and Dollar Climb on US-UK Trade Deal Surprise first appeared on trademakers.
The post Sterling and Dollar Climb on US-UK Trade Deal Surprise first appeared on JP Fund Services.
The post Sterling and Dollar Climb on US-UK Trade Deal Surprise appeared first on JP Fund Services.
