ForexLive European FX news wrap: US-UK trade deal looms, BOE vote split raises eyebrows

Headlines:

Markets:

• GBP leads, JPY lags on the day
• European equities higher; S&P 500 futures up 0.9%
• US 10-year yields up 2.3 bps to 4.298%
• Gold down 0.6% to $3,345.43
• WTI crude up 1.7% to $59.08
• Bitcoin up 2.8% to $99,499

It was an eventful session as markets are continuing to keep the focus on trade headlines. The UK confirmed that Trump’s announcement later is to be an agreement for a trade deal, or at least the framework of one, and that sets the stage ahead of the 1400 GMT showing at the Oval Office.

Trump also got up and early to keep risk sentiment underpinned as he says that the agreement will be a “full and comprehensive one”.

However, as things stand, media reports don’t seem to have much of anything to show for. So, we’ll see if Trump will deliver any major details in his announcement later. The only thing so far that we know is that the UK is looking to make concessions on food and agriculture in exchange for lower auto tariffs.

US futures and European indices are staying buoyed as a result while in FX, the dollar held steadier earlier on but gave back some gains during the session.

EUR/USD fell to a low of 1.1270 early in the day but is now sticking just above 1.1300 with large option expiries at the figure level also perhaps attracting price action.

Meanwhile, USD/JPY is marked higher throughout with a push towards 145.00 as bond yields are also keeping up on the day. Besides that, USD/CHF is up 0.1% to 0.8245 but off earlier highs of 0.8290 and USD/CAD up slightly by 0.3% to 1.3885 on the day.

The pound was a decent mover late on as the BOE cut the bank rate by 25 bps to 4.25% as expected. However, it was the bank rate vote decision that raised eyebrows with two members voting to keep rates unchanged. That is seeing the decision being viewed as more of a hawkish rate cut and sterling jumped as a result.

GBP/USD moved up from 1.3250 to 1.3330 and is holding at the highs now as we look towards US trading.

Looking to the day ahead, the main focus will be on Trump’s announcement later as that will set the tone for broader markets ahead of the weekend. As a reminder, there’s also still talks with China due in Switzerland during the two-day break. So, that will be an important consideration for traders to consider in their approach going into next week.