Dollar Range-Bound, Euro Supported, Sterling Held Back by Domestic Headwinds.

USD – The dollar is holding in a supported but range-bound position, underpinned by solid U.S. data but tempered by trade uncertainty and mixed global FX flows.

EUR – The euro remains steady to slightly firmer on broad USD weakness and technical support, with direction largely driven by external factors rather than fresh eurozone data.

GBP – Sterling is range-bound with a softer bias, constrained by political uncertainty and shifting BoE rate expectations despite some support from USD softness.

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USD:

Recent U.S. data including confidence and labour indicators continue to underpin the greenback, prompting some upside in the US Dollar Index after recent downside pressure. Traders are balancing expectations for Fed policy with incoming macro prints. Ongoing tariff headlines and shifts in trade dynamics have kept currency markets on edge, with Citi reporting hedge funds were net sellers around recent U.S. Supreme Court trade decisions. The dollar has softened versus some commodity-linked and emerging market currencies, lifting units such as the ringgit, even as it remains relatively firm against safe-haven alternatives on certain crosses. The USD remains supported but range-bound, with mixed domestic cues and external sentiment balancing out price action. Traders are watching upcoming data releases and policy signals for clearer direction.

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EUR:

The euro is trading steady to slightly stronger against major currencies amid continued broad USD weakness and risk-driven flows, with EUR/USD supported by technical momentum and buoyed by eurozone business activity indicators, even though there are limited fresh domestic catalysts on today’s schedule. Markets are also watching FX option expiries around key levels that could keep volatility elevated, while GBP/EUR trends lower as sterling feels pressure from UK weakness. The euro remains supported by broad FX flows and technical positioning, but near-term direction will likely remain tied to USD trends and risk sentiment rather than fresh eurozone fundamental releases.

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GBP:

GBP is reacting to broader USD and euro movements, with a softer dollar lending some support, but stronger euro trends capping GBP/EUR upside given sterling’s domestic challenges. Persistent political uncertainty in the UK remains a headwind for sterling. Ongoing discussions around leadership and fiscal policy are keeping risk sentiment cautious, limiting sterling’s upside even when global dollar weakness supports other currencies. Swings in expectations around Bank of England rate cuts continue to influence pound pricing. Where markets repriced easing earlier in the week, today’s flows suggest a bit more caution as traders digest mixed data and central bank commentary. Sterling is range-bound with a softer bias, as traders weigh subdued UK macro momentum, political risk, and evolving central bank expectations, while external FX drivers continue to play an influential role.

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