FX Market Update: The Euro’s Problems Aren’t Going Away.

USD – Remains relatively steady after recent gains, although the pace of the rally has slowed. Markets continue to favour the dollar, but with no major US catalyst this morning, attention is shifting to whether recent strength can be sustained.

EUR – Continues to struggle, with political uncertainty in France weighing on sentiment. While EUR/USD has stabilised somewhat, downside risks remain firmly on the radar.

GBP – Holding up reasonably well against the euro but still struggling to break higher against the dollar, with GBP/USD remaining capped below key technical resistance levels.


USD: The dollar has enjoyed a strong run in recent weeks, but this morning feels more like a consolidation session than a continuation of the rally. Investors remain broadly supportive of the greenback given the relative strength of the US economy, though there appears to be less conviction to push the currency materially higher without fresh data. For now, the market remains comfortable holding dollars, but traders will be watching closely for the next catalyst that could either reignite momentum or trigger some profit-taking.

EUR: The euro remains under pressure, although the story differs depending on which pair you’re looking at. Against sterling, the single currency continues to struggle as political concerns in France weigh on investor sentiment. Uncertainty around fiscal policy and government stability remains a key theme for European markets.

Against the dollar, the euro’s recent rebound has lost momentum. UOB notes that EUR/USD is likely to remain range-bound for now, but the broader bias remains cautious. While the pair has avoided a deeper sell-off, markets appear reluctant to chase it higher until there’s greater confidence around both the Eurozone economy and political environment.

GBP: Sterling is having a relatively steady start to the week. Against the euro, the pound continues to benefit from concerns surrounding France, but against the dollar it remains stuck below the 1.3350 level.

Technical traders continue to focus on the 100-day moving average, which has repeatedly capped rallies in GBP/USD. While the pound isn’t showing signs of significant weakness, neither is it generating enough momentum to break through key resistance levels. Until that changes, sterling may continue to trade within its established range while taking direction from broader market sentiment.

*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time. CentralFX are not responsible for the rates shown.