April 12, 2025 – Written by David Woodsmith
STORY LINK Pound-to-Euro Rate Recovers as Dollar Battered on Bond Sell-off
As the bond sell-off continued, the Pound to Euro rate recovered to 1.1515 towards Friday’s close from 16-month lows below 1.1450 earlier in the session.
The Pound to Dollar (GBP/USD) exchange rate hit highs just below 1.3150 before a retreat to near 1.3050.
There has been a notable element of consolidation in New York trading on Friday with position adjustment ahead of the weekend.
The battered dollar has found some relief after heavy selling while the Euro has also corrected weaker after a surge over the past 24 hours.
Overall volatility remains elevated across all asset classes with US equities posting slight gains around the European close.
Markets, however, remain extremely jittery given the trade tensions and the dramatic escalation in the US-China war.
Bond markets remained an important influence during the day.
The US 10-year bond yield increased to highs above 4.55% amid a fresh round of selling while the 30-year yield was at 12-week highs near 4.95%.
The bond sell-off continued to unsettle markets.
Kit Juckes, chief FX strategist at Societe Generale commented; “If the U.S. government causes equities to fall and reduces the profitability of U.S. companies, we should ask ourselves whether the rest of the world still wants to put all of its money in American bonds or equities.”
He added; “Money flows have become vastly bigger than trading flows.”
The UK 10-year yield trading around 4.75%, maintaining unease over UK financial stability.
ING commented; “At a moment where bond market instability is driving outflows from the U.S. dollar in the U.S., markets are looking at bond market instability in the UK.”
MUFG added; “The sell-off in Gilts as we’ve seen in the past following UK specific fiscal events has coincided with temporary periods of GBP weakness and will add to downside risks to growth in the UK if higher yields are sustained.”
The Euro also corrected weaker after hitting 3-year highs at 1.1470 earlier in the session.
Vasileios Gkionakis, senior economist at Aviva Investors noted safe-haven flows into the Euro as well as a longer-term calculation surrounding the big boost to German spending.
He added; “The euro rallying $1.25 is a very clear possibility.”
International Money Transfer? Ask our resident FX expert a money transfer question or try John’s new, free, no-obligation personal service! ,where he helps every step of the way,
ensuring you get the best exchange rates on your currency requirements.
