ChamberFX Weekly Brief
Keep up-to-date on foreign exchange developments and news with our ChamberFX weekly briefs and monthly newsletters. These valuable insights are provided by Damon Ellam, International Payments UK, MoneyCorp. Damon is our regional representative and will be providing useful monthly FX forecasts to help chamber members with their currency strategies.
June 2025
Good Morning,
Welcome to our June newsletter. I hope you find it useful and informative.
Please see below our thoughts for this month, a calendar of the upcoming FX market risk events to watch out for in June, as well as interest rate & FX rate predictions.
GBP: Strength Amid Fiscal Challenges
The pound continued its upward trajectory in May, extending its highest levels against the dollar since early 2022 and recovering nearly 2% against the euro at the peak. This resilience has been driven by improving UK trade relations with the Europe Union, short-term economic data stability, and the Bank of England's cautious stance on interest rate cuts.
However, concerns remain about the fiscal outlook, especially with the upcoming UK Spending Review on 11th June, which will shape government budgets until 2029. The expected reversal of unpopular policies adds pressure to spending decisions, raising questions about the sustainability of sterling’s gains—particularly against the USD.
The Bank of England are not expected to cut interest rates from 4.25% in June.
USD: Negative Sentiment & Trade Policy Uncertainty
The dollar’s recent trajectory has been shaped by a widely negative market sentiment and uncertainty over trade tariff policy. The potential for Trump’s taxation & spending policies to be inflationary and the re-pricing of U.S. interest rates could support a stronger dollar in the second half of this year.
However, reciprocal tariffs announced in April have fuelled uncertainty about U.S. economic growth. The recent U.S. International Trade Court ruling to rescind many of Trump’s tariffs has further muddied the waters, making it difficult for businesses trading with the U.S. to plan ahead confidently, with the dispute now expected to reach the Supreme Court.
The U.S. Federal Reserve are not expected to cut the headline interest rate from 4.50% in June.
EUR: Strong Performance & Trade Risks
Investors seeking alternatives to U.S. markets have turned their focus to Europe, pushing the euro higher against major counterparts. European stock markets have climbed steadily this year and EUR/USD reaching a 12.4% gain before retreating. However, uncertainty looms—President Trump has proposed fresh trade tariffs on the EU, which could weaken growth and heighten inflationary pressures across the eurozone.
The European Central Bank’s upcoming rate decision on Thursday is expected to bring a seventh consecutive cut, reinforcing a dovish policy approach to protect economic growth, however this could be the last cut by the ECB for a while.
Read the newsletter in full.
Best regards,
Damon"
Weekly FX Briefs
Contact
For further information and advice on Hull & Humber's ChamberFX, or for assistance with your currency strategy, please click here or contact Lorraine Holt at l.holt@hull-humber-chamber.co.uk or call 01482 324976.
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