April 10, 2025 – Written by James Fuller

STORY LINK EUR/GBP Outlook: Pound Dips vs Euro on Drop in UK gilts, Rise in Yields

Pound Sterling is under pressure as gilts drop. EURGBP rose to 0.866 on Wednesday. The S&P500 closed 9.52% higher on Wednesday as Trump paused tariffs at a 10% rate. China was hit with further tariffs as the trade war escalates.

It’s a challenge to keep up with the news flow and manic moves across global markets. Wednesday was perhaps the wildest session of the recent week, and the 9.52% gain in the S&P500 was the third largest ever and has only been bettered by bear market rallies in 2008.

President Trump announced a 90-day tariff reprieve (excluding China) just two days after calling the same story fake news. The bond markets may have forced his hand – when stocks and bonds fall together there is no safe haven. This is what he posted on Truth Social

“I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.”

Looking ahead, the US still has a major issue with China, and Trump’s poste increased tariffs yet again.

“Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately.”

China has vowed to fight to the end and increased its tariffs to 84%. It seems both sides are prepared to effectively stop trading with eachother.

As well as a huge rally in stocks, other market made significant moves, with gold, copper and oil all surging higher. Higher oil and higher yields are problematic for the US and for Trump who has vowed to lower them. The 10Y yield closed at 4.3%, 12% higher than Friday’s low.

Markets Recover but Remain Edgy

The tariff reprieve has lifted spirits and sparked some huge rallies in risk assets, but risks remain high and the volatility in markets is a sign of underlying problems. As ING note:

“The increased volatility will also remain, preventing a full restoration of risk sentiment. Markets will not easily forget these episodes with wide market swings and thus the demand for safe assets should remain elevated. 10Y Bunds, for one, significantly outperformed swaps during the peak stress episode underscoring their safe haven role, even if they are now trading above the swap curve again.”

Currencies have remained stable but with a “risk off” tone as safe havens like the yen and Swiss Franc are outperforming, as is the euro due to its liquidity and stability. A flee from US assets may be underway and the US dollar remains under pressure near the 2025 lows. Notably, this is against a backdrop of higher yields.

The Pound Plunges Against the Euro

Market volatility has been weighing on the pound which is not seen as a safe haven. EURGBP broke above 0.85 on Monday and already reached 0.866 on Wednesday.

Sterling weakness stems from the drop in UK gilts and rise in yields which has been exacerbated by tariffs and global market stress. We know from earlier occurrences this not a positive for the pound and reflects tight finances. As ING explain:

“That UK gilts even underperformed US Treasuries is quite remarkable and probably very unnerving for the UK’s Debt Management Office. One view here is that the DMO is already pushing the limits with £300bn of new issuance this year and that any greater slowdown in the UK economy, which would hit revenues/raise welfare spending, would only hit gilts harder. Clearly, then, the gilt market is an Achilles heel for sterling.”

Three cuts are now expected from the BoE who are coming under more pressure to support the economy, even though inflation concerns persist.

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TAGS: Euro Pound Forecasts

April 10, 2025 – Written by Frank Davies

STORY LINK GBP/USD Prediction: Pound Sterling Outlook Flips “Neutral-Bullish” say Scotiabank

Examining the short-term outlook, the Pound Sterling (GBP) is tipped to extend its recent recovery against the US Dollar (USD), according to the latest technical analysis by FX strategists at Scotiabank.

“GBPUSD’s sharp recovery is notable” says Shaun Osborne, Chief FX Strategist at Scotiabank.

“The RSI’s dip into bearish territory (below 50) has proven to be short-lived, and the focus is now on the 1.29-1.30 congestion range that had prevailed through much of March and the first couple of trading days in April.

“Resistance is expected between 1.31 and 1.32 while support is expected below 1.28.”

The Pound US Dollar exchange rate advanced on Thursday following news that US President Donald Trump would implement a 90-day delay on most tariffs, sparking renewed market optimism.

The Pound (GBP) benefited from improved risk appetite on Thursday. The UK currency—which tends to perform well in risk-on environments—found support amid broad-based market optimism.

Investors reacted positively to Trump’s decision to shelve a sweeping series of new tariffs for 90 days, opting instead to impose a flat 10% levy on all countries aside from China.

The move triggered a rally in global stock markets and, by extension, helped lift the Pound.

Additionally, the decision prompted traders to reassess their interest rate expectations for the Bank of England (BoE). Earlier in the week, a 25-basis-point cut in May was seen as a near certainty, with some even pricing in a larger 50bps move. However, following the tariff news, the probability of a 25bps cut dropped to 78%.

The US Dollar (USD) weakened on Thursday as demand for safe-haven assets declined amid the improving market mood.

Compounding the pressure on USD were lingering doubts about Trump’s economic strategy.

The initial introduction of tariffs had already been criticised for its lack of economic modelling and potential fallout for the US economy.

Now, the abrupt reversal may have dealt another blow to confidence in the White House’s policy direction, further undermining the Dollar.

Looking to Friday, the Pound could climb higher if the UK’s GDP data meets forecasts. Economists expect February to show a modest 0.1% rebound in growth, following a 0.1% decline in January.

Meanwhile, the latest producer price index could affect the US Dollar. While rising PPI figures could support USD by dampening interest rate cut expectations, they could just as quickly stoke recession fears, thereby weighing on the currency.

Furthermore, the latest University of Michigan consumer sentiment index may also influence USD. Analysts anticipate another drop in confidence, which could intensify concerns over the US economic outlook and apply further pressure to the Dollar.

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TAGS: Pound Dollar Forecasts

Created on April 10, 2025

• The US dollar plunged early during the trading session on Wednesday, breaking well below the crucial ¥145 level.
• That being said, it looks like the buyers are coming into at least trying to support the US dollar against the Japanese yen, so it’ll be interesting to see how this plays out.
• The interest rate differential still favors the US dollar, and the way the bond market has been behaving, that’s only going to get more aggressive.

Nonetheless, the Japanese and the Americans are much more likely to come to some type of an agreement then the Chinese and Americans, so do keep that in mind. In other words, it’s very likely that the trade situation in the United States and Japan will probably normalize before it’s all said and done. However, the Japanese yen is also considered to be a major safety currency, and I think that’s part of what you are seeing here. That being said, I think we remain in a downtrend more than anything else, so you probably need to pay close attention to that.

Technical Analysis Still Looks Rough

Technical analysis in this market still looks very rough, so keep that in mind. Ultimately, this is a market that given enough time, will have to come to some type of resolution, and if we break down below the bottom of the range for the Wednesday session, we could then see the US dollar trading down to the ¥142 level. However, I also recognize that this is a longer-term “carry trade pair” for those who are willing to step in and take advantage of it. At this point though, it’s obvious that things are way too dangerous for people to think about at the moment, so with that being said, most traders I know are simply sitting on their hands.

The Japanese yen probably continues to do fairly well against most currencies in this environment, and the US dollar itself is going to be a bit of a mixed bag, because there is money leaving the United States, but at the same time, the bonds continue to show higher yields. That interest rate differential is only getting bigger.

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The EURJPY pair faced to resume the negative attack by attacking extra support at 159.60 level, which forces it to delay the negative attack and providing mixed trading, to settle near the moving average 55 at 161.00.

Note that the continuation of the trading stability below the bearish channel’s resistance at 163.25 that appears in the above image represents a main factor that confirms the continuation of the negativity in the upcoming trading, therefore, we will keep waiting for gathering extra momentum that allows it to break the support at 157.60, then wait for reaching the negative stations near 158.90 and 157.40.

The expected trading range for today is between 159.60 and 162.20

Trend forecast: Bearish

Platinum price continued forming the bullish correctional trading, surpassing the obstacle at $920.00, to begin recording some of the gains by reaching $930.00, getting advantage from the continuation of the positive momentum that come from stochastic, which approaches from 50 level.

Reminding you that the bullish suggestion on the current trading will remain valid, depending on the stability of the support at $895.00, to expect reaching 50%Fibonacci correction level at $950.00, and surpassing it will lead the price to test the resistance at $961.00

The expected trading range for today is between $920.00 and $950.00

Trend forecast: Bullish 

Platinum price continued forming the bullish correctional trading, surpassing the obstacle at $920.00, to begin recording some of the gains by reaching $930.00, getting advantage from the continuation of the positive momentum that come from stochastic, which approaches from 50 level.

Reminding you that the bullish suggestion on the current trading will remain valid, depending on the stability of the support at $895.00, to expect reaching 50%Fibonacci correction level at $950.00, and surpassing it will lead the price to test the resistance at $961.00

The expected trading range for today is between $920.00 and $950.00

Trend forecast: Bullish 

April 9, 2025 – Written by Tim Boyer

STORY LINK Euro to Pound Forecasts RAISED to 0.86 in Six Months at Rabobank

Foreign exchange analysts at Rabobank have raised their exchange rate forecasts for the Euro versus the Pound Sterling.

Recent US tariff concerns have driven investors towards currencies backed by current account surpluses, benefiting the Euro (EUR).

“The Eurozone’s current account surplus appears to be a source of support for the EUR currently.”

The Euro’s resilience as a temporary safe haven reflects investors’ preference to hold cash amid market uncertainty.

“Investors appear to be sitting on cash in CHF, JPY and EURs while waiting for current fog of uncertainty to clear.”

The Pound Sterling (GBP) remains vulnerable due to the UK’s persistent current account deficit, especially when domestic fundamentals weaken.

“The UK’s current account deficit can leave GBP exposed when UK fundamentals turn sour and international investors look for the exits.”

Germany’s shift towards increased public spending, notably in defence and technology, further boosts the Euro’s attractiveness.

“Investors had already been looking for fresh opportunities in Europe, so sitting on cash in EURs may seem like a reasonable position.”

Consequently, Rabobank has raised its EUR/GBP forecast to 0.85 for the six-month horizon.

“We have adjusted our EUR/GBP forecasts higher and now see the currency pair at 0.85 on a 6 month vs. compared with a previous forecast of 0.83.”

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TAGS: Currency Predictions Euro Pound Forecasts

Created on April 10, 2025

• The British Pound has been all over the place against the US dollar as we continue to see a lot of noisy behavior.
• With that being said, we are sitting right on the 1.2750 level, an area that should offer a lot of support.
• We also have the 200 day EMA sitting there as well.

The resulting candlestick does look a lot like an inverted hammer, and this is an ugly sign for the British pound. During the day, Donald Trump announced that the tariffs would be paused for 90 days, at least the reciprocal tariffs, except for China. So, we’ve seen a rush back into the US dollar as a result. if the wait and see on this points out, but we had been selling off a bit anyway. So, I do think that the first crack in the ice, as far as Europe is concerned, might end up being the British pound. Well, at the wait and see, but if we were to break down below the 1.27 level, I think this is a market that drops precipitously again.

Headlines Continue to Be an Issue

The biggest problem you have is that the latest headline is what will drive massive amounts of money in and out of the market. So we’re not at normal time and you have to keep your position size reasonable as a result. After all, you could end up seeing a 70 pip move in a matter of seconds with the right headline.

That move could be in either direction. So, you have to keep that in mind as well. In general, I do think that this is a pair that drops, but I need to see a fresh new low to actually start shorting if we rally, then I would anticipate that the British pound probably sees a lot of resistance near the 1.29 level.

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The EURJPY pair provided new negative closes below the moving average 55 at 161.20 level, which forces it to return to settle within the bearish channel’s levels, to begin targeting some of the negative stations by reaching 159.60.

The contradiction between the main indicators might force the price to form mixed waves, but the chances of activating the bearish track will remain valid, if the trading settled below the bearish channel’s resistance at 160.75, to expect forming an initial negative target at 158.90 level, reaching 157.40 in the near period trading.

The expected trading range for today is between 158.90 and 161.00

Trend forecast: Bearish

April 9, 2025 – Written by Tim Boyer

STORY LINK Pound-to-Euro Forecast: GBP/EUR Slips amid Surging Gilt Yields

The Pound Euro exchange rate drifted lower on Wednesday as investor nerves were rattled by a resurgence in global trade tensions.

At the time of writing, GBP/EUR was trading at around €1.1624, down approximately 0.2% from the morning’s opening level, having briefly touched a low of €1.1578 earlier in the session.

The Euro (EUR) firmed on Wednesday, buoyed by a combination of safe-haven flows and weakness in the US Dollar (USD).

This came in response to a fresh wave of tariffs introduced by US President Donald Trump, including a steep 104% duty on select Chinese goods, which triggered fresh market anxiety.

The Euro’s strength was further bolstered by its inverse correlation with the US Dollar, which slipped as investors began to price in the economic cost of escalating trade tensions between Washington and Beijing.

Appetite for the Greenback also waned as concerns mounted over the credibility of US policy, with some market watchers questioning the long-term impact of Trump’s aggressive trade strategy.

The Pound (GBP) found itself on the back foot as soaring UK government bond yields stoked investor concerns.

A heavy selloff in UK bonds pushed the 30-year yield to its highest point since 1998, even surpassing the peak seen during the bond market turbulence earlier this year.

This placed additional strain on GBP sentiment as rising yields risk pushing up government borrowing costs and could complicate Chancellor Rachel Reeves’s fiscal plans, particularly her aim to stimulate growth while maintaining budget discipline.

Looking ahead, the Pound Euro exchange rate may remain under pressure through the end of the week as the fallout from Trump’s tariffs continues to ripple through global markets.

Safe-haven flows could continue to support the Euro if risk appetite remains subdued, while the Pound may face further losses if UK economic uncertainty deepens.

However, the publication of the UK’s monthly GDP data could offer Sterling some reprieve if February’s figures show a return to growth, helping to alleviate some recent concerns over the health of the British economy.

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TAGS: Pound Euro Forecasts