Both the BoE and ECB held rates last week but struck hawkish tones, reflecting a change in outlook. Sterling gained on the shift but faces an immediate test from this week's local elections. A bad result for Labour could quickly reverse sentiment. Eurozone growth concerns continue to limit the euro's upside and Friday's US Non-Farm Payrolls is the key data release this week.
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Current FX rates: 5 May 2026
| Currency pair | Rate |
|---|---|
| gbp usd | 1.3545 |
| eur usd | 1.1692 |
| gbp eur | 1.1585 |
Rates correct as of 11:40pm on Monday 5 May but may now have changed.
The Big 3
A deeper look at the performance of major currency pairs this week. Become a subscriber to receive the full reports.
Sterling rallies on hawkish BoE tone as political risk looms
GBP/USD pushed higher after the BoE held rates albeit with a more hawkish tone. Gains still remain tentative with local elections this week posing a risk event for sterling. On the dollar side, the Fed held rates with a neutral stance, and renewed Middle East tensions are keeping a floor under the greenback. Friday’s Non-Farm Payrolls is the week’s key data release.
ECB holds but leaves June hike on the table as growth concerns linger
EUR/USD consolidated last week after the ECB held rates but left a June hike firmly in play, with some members signalling that inbound data should offer more clarity by then. A European inflation survey jumping to 4% underlines the challenge, but growth concerns continue to hold the euro back. No significant European data this week leaves the dollar in the driving seat.
GBP/EUR volatility looks too calm ahead of a potentially turbulent week
GBP/EUR rallied following the BoE’s slightly more hawkish tone than the ECB. But local elections this week are a clear risk. A poor Labour result could quickly shift the focus toward less fiscally disciplined leadership candidates. The euro’s downside looks limited given three hikes are still priced this year, even as growth concerns continue to weigh on sentiment.
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Looking forward
Key dates for your calendar.
- Tuesday: US ISM Services PMI, JOLTs Job Openings
- Wednesday: Canada Ivey PMI.
- Thursday: Mexico CPI. Australia Balance of Trade.
- Friday: US jobs data and consumer sentiment. Germany Balance of Trade. Canada unemployment rate.
- Saturday: China Balance of Trade, Imports and Exports.
What we’re talking to our clients about
IFX Payments is service led. Here are some of the conversations we’re having:
- US-Iran exchanging fire after 4 week “weak” ceasefire
- Oil price above $100 (and economic pressure)
- US Non-farm payroll data end of week
The contents of this article do not constitute financial advice and are provided for general information purposes only. While the content is based on information believed to be accurate at the time of publication, no guarantee is provided.