Investing.com — Sterling and the euro found firmer ground on Friday, as a softening dollar rally, rather than any domestic catalyst, did most of the work, even as fragile risk sentiment in Asia kept the broader tape on edge.
As of 08:26 ET (12:26 GMT), rose to 1.3213, up 0.14%, while gained 0.29% to 1.1403.
The dollar’s momentum looked to be cooling after an extended run higher, with ING noting the greenback failed to capitalise on the latest correction in Asian equities, typically a setup that favours haven flows into USD.
Yesterday’s rebound in US equities proved small and short-lived, and a fresh slide in South Korean stocks overnight has weighed on global equity futures again.
U.S. data offered a mixed read. First-quarter personal spending was revised sharply lower, from 1.4% to just 0.5% quarter-on-quarter, clouding an otherwise robust 0.7% month-on-month print for May.
First-quarter GDP, by contrast, was revised up to 2.1%, underlining the strength of the AI-driven growth push. May’s core PCE landed in line with expectations at 0.3% month-on-month, leaving rate-expectation traders with little fresh ammunition until the next major releases.
ING’s Francesco Pesole said the latest price action lends some support to the view that “a lot of positives are in the price for the USD,” adding that beyond the very near term, “the case for a dollar correction is getting stronger.” He flagged July’s payrolls and CPI as the next data points likely to set the tone for rate expectations.
The Fedspeak calendar is thin today, with only hawk Neel Kashkari on the docket. That follows a notably split tone yesterday: Austan Goolsbee softened to more neutral language after sounding hawkish earlier in the week, while John Williams leaned dovish, as expected.
Sterling’s gain came with little domestic news behind it; GBP/USD’s recovery to 1.3219 still leaves cable near its lowest levels since late March, having dipped as low as 1.3139 earlier this week, with the move essentially a function of the dollar’s broader fade rather than any UK-specific driver.
EUR/USD is “searching for some stabilisation in the 1.1350-1.140 area,” per ING, with eurozone inputs expected to stay secondary for the pair in the near term, the broker noted markets would likely need a sizeable CPI miss next week or broader market turmoil to shift the one remaining priced-in ECB hike for this year.
Friday’s EUR/USD levels mark a recovery from Wednesday’s 1.1325 low, the weakest print since mid-March, but still well inside the recent range.
ING’s baseline view remains that the 1.130 support in EUR/USD holds, with the pair seen returning above 1.150 this summer, Pesole said, though that call still hinges on the broader dollar turning and on equity sentiment continuing to settle.