Dollar Holds Firm on Resilient Flows, Euro Supported by USD Dynamics, Sterling Stays Range-Bound.

USD – The dollar is holding firm near recent highs as resilient flows offset ongoing trade uncertainty and cautious market sentiment.

EUR – The euro is modestly supported by broader USD softness, with direction largely driven by external dynamics rather than eurozone fundamentals.

GBP – Sterling remains range-bound, buoyed by dollar weakness but capped by domestic political and Bank of England policy concerns.

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USD:

The US dollar is showing relative strength this morning, with the US Dollar Index holding near 98.00, cushioning many major currency pairs as markets navigate lingering trade policy uncertainty. Despite renewed tariff headlines and global trade tensions that earlier weighed on sentiment, the dollar has regained some footing as traders reassess safe-haven demand and await key upcoming data. The dollar is holding firm amid mixed sentiment, with lingering trade policy risks but resilient flows supporting the greenback.

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EUR:

The euro remains steady to modestly firmer against the dollar and sterling, mainly reacting to broader USD dynamics rather than fresh eurozone fundamentals. Renewed uncertainty about US trade policy continues to underpin demand for the euro via USD weakness, though swings in risk sentiment and lack of major domestic catalysts limit strong directional conviction. Recent forecasts suggest further room for EUR strength over the medium term if the dollar’s safe-haven appeal continues to ease. The euro continues to benefit from USD softness, with limited fresh eurozone data keeping the trend primarily driven by external factors.

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GBP:

Sterling is trading around recent ranges against both the dollar and euro, supported at the start of the week by constructive flows following tariff-related USD weakness and UK data showing some softening in labour conditions. However, domestic headwinds, including expectations for possible Bank of England rate cuts and political uncertainties — continue to limit sterling’s upside. Technical and fundamental factors suggest GBP could remain range-bound unless new macro drivers emerge. The pound remains range-bound, supported by broader USD weakness but constrained by UK macro and policy considerations.

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