The post British Pound: Political risk premium builds against Euro – ING appeared on BitcoinEthereumNews.com.
ING’s Francesco Pesole highlights rising political uncertainty in the United Kingdom (UK) as calls grow for Prime Minister Keir Starmer’s resignation, with betting markets seeing a high chance he leaves office this year. He notes emerging political risk premium in EUR/GBP and warns sterling could face further pressure as markets assess leadership contenders and fiscal-rule credibility. Sterling pressured by UK political turmoil “The pound started coming under pressure yesterday afternoon (after a strong session) as calls for Starmer’s resignation intensified. For the first time in a long time, some political risk premium seems to be emerging in EUR/GBP.” “That is, however, still small according to our model, around 0.3% short-term overvaluation.” “The pound has plenty of additional room to build a negative premium, with markets likely to shift their focus to which candidate hol
The post British Pound feeds on bad news as the Euro slides to a one-year low appeared on BitcoinEthereumNews.com.
The Euro’s slide against the Pound has now consumed seven of the last eight trading sessions, and the reflex explanation of a soft single currency gets the attribution backwards. Sterling has done most of the work here: the Pound just closed out its best week in three months, printed a one-year high against the Euro, and managed both midway through a leadership transition with no confirmed Prime Minister and no named finance minister. The cross is falling because the Pound is being repriced upward, not because the Euro is falling apart. A Bank of England hike went from coin flip to certainty in three sessions Interest rate expectations moved decisively in the Pound’s favour inside a single week. Markets priced roughly a 70% chance of a Bank of England (BoE) hike by year-end on Monday, nudged that to 76% on Tuesday, then moved to full pricing after the White House declared
The post Euro: Energy repricing shapes outlook against US Dollar – ABN AMRO appeared on BitcoinEthereumNews.com.
ABN AMRO’s Georgette Boele notes that the Euro’s relationship with energy prices has evolved, with recent Oil and Gas gains again weighing on EUR/USD. Earlier in the US-Iran conflict, higher energy prices hurt the Euro (EUR), but later the pair became more driven by Federal Reserve (Fed) and European Central Bank (ECB) expectations. She now sees EUR/USD guided by central bank expectations, yield spreads and Eurozone energy risks. Euro sensitivity returns to energy moves “At the start of the US-Iran conflict, higher energy prices weighed on the euro against the US dollar. During the conflict, however, EUR/USD became less sensitive to energy prices and more sensitive to expectations for the Fed and the ECB.” “When a Memorandum of Understanding was announced, energy prices fell sharply, but the euro gained little against the US dollar because markets were focused on expectation
The post British Pound holds firm as Hormuz shock lifts Oil, Dollar appeared on BitcoinEthereumNews.com.
The Pound Sterling (GBP) posts modest gains during the North American session on Wednesday amid growing tensions in the Middle East, as US President Donald Trump’s said the deal with Iran was “over” after both countries exchanged attacks over the last couple of days. At the time of writing, the GBP/USD pair trades at 1.3371, up 0.09%. GBP/USD steadies as geopolitical risk offsets Dollar strength During the last couple of days, Tehran and Washington exchanged blows after Iran hit two vessels sailing through the Strait of Hormuz, triggering a response from the US. The US CENTCOM reported that it attacked 80 targets during the last two days. In addition to the attacks, the US reimposed sanctions on Iran’s Oil, while Trump threatened to resume the blockade in Hormuz. Energy prices jumped, with the US crude Oil benchmark, West Texas Intermediate (WTI), rising nearly 5% to $75.60. The US
The post New Zealand Dollar: RBNZ hike underpins kiwi – ING appeared on BitcoinEthereumNews.com.
ING’s Francesco Pesole reports that the Reserve Bank of New Zealand (RBNZ) raised rates to 2.50%, delivering a more hawkish message than expected and signalling further tightening is likely. He notes consensus within the Committee, sees another hike around September or October, but stresses dovish risks later in 2026 and maintains a 0.59 NZD/USD target by year-end. Further tightening signalled by rbnz “The Reserve Bank of New Zealand hiked rates by 25bp to 2.50% today, in line with our call. The accompanying message had a more hawkish tone overall than we had anticipated, though. The statement reads that further hikes “appear likely at upcoming meetings”, even if their timing is “highly uncertain”.” “There is still plenty of uncertainty around the inflation outlook, but the Bank stressed how non-tradable inflation had been persistent even before the war.” “We had suspected a close vote spli
The post United Kingdom: Market watching Burnham – Rabobank appeared on BitcoinEthereumNews.com.
Rabobank’s Senior FX Strategist Jane Foley discusses UK political dynamics, noting Burnham’s likely unchallenged path to becoming Prime Minister on July 20 and his popularity within Labour. Foley stresses Labour’s weak polling position, tight public finances, tax constraints and uncertainty over the choice of Chancellor as key factors for market sentiment and potential gilt market anxiety. Burnham’s agenda and fiscal constraints “A messy Labour leadership election this summer, would probably not have served anyone well. Although there is a July 17 deadline for other Labour MPs to declare their candidacy for party leaders, it would appear that Burnham will be unchallenged allowing him to take the reins on July 20. The relatively smooth transition will come as a relief to market.” “Also, the popularity of Burnham within Labour may also be a good omen given the deep party factions which Starme
The post British Pound: Recovery eyes 1.36 against US Dollar – Scotiabank appeared on BitcoinEthereumNews.com.
Scotiabank strategists Shaun Osborne and Eric Theoret note the British Pound (GBP) is slightly softer but supported by a sharp repricing of Bank of England (BoE) tightening. Improving United Kingdom (UK)–United States (US) spreads and positive sentiment around the UK leadership transition underpin GBP, while technicians remain bullish, targeting an extension of gains toward 1.36 within a 1.3300–1.3400 near-term range. BoE repricing underpins Pound outlook “The pound is soft, down a fractional 0.1% vs. the USD and a mid-performer among the G10 currencies in mixed overall trade. The latest resurgence in geopolitical tensions has amplified the renewed tightening in BoE expectations that we had observed over the past week or so.” “The recovery in UK-US spreads is offering fundamental support to the GBP, and compounding the sentiment-related strength observed in response to the mar
The post US Dollar Index: Hawkish Fed minutes may support greenback – ING appeared on BitcoinEthereumNews.com.
ING’s Francesco Pesole notes that recent equity jitters and firm Oil prices have underlined the Dollar’s safe-haven appeal, while markets look to the June Federal Open Market Committee (FOMC) minutes. He argues the Federal Reserve’s (Fed) hawkish shift and Dot Plot have kept the Dollar supported, and expects US Dollar Index (DXY) to trade largely rangebound with modest upside risks in the near term. Fed minutes seen cementing hawkish stance “Equity jitters offered the dollar some support yesterday – a reminder of the greenback’s very strong safe-haven appeal despite the concentration of AI-sensitive stocks in US indices. Oil prices are also trading on the strong side after some overnight military action in Iran and the Treasury revoking the waiver that allowed Teheran to sell crude. Markets will keep monitoring the situation but have tended to fade Middle East re-escalation ri
The post Euro steadies above 1.1400 as traders assess US-Iran tensions appeared on BitcoinEthereumNews.com.
EUR/USD treads water above the 1.1400 mark on Wednesday, steadying after coming under selling pressure as traders assess renewed US-Iran tensions after both sides exchanged fire overnight following attacks on commercial ships near the Strait of Hormuz earlier this week. US President Donald Trump said the interim deal with Iran was “over,” although Reuters later reported that he did not repeat those comments during the closed NATO leaders’ meeting, citing a source familiar with the talks. Even so, risk sentiment remained fragile after Trump said the United States would “probably hit them again tonight” and added, “I don’t know if we’ll have an Iran deal.” The latest escalation has pushed Crude Oil prices higher, reviving energy-driven inflation concerns and reinforcing expectations that major central banks may need to tighten monetary policy further. According to the CME FedWatch
