Risk aversion was one of the dominant themes in May, with market participants seeking a safe-haven in the shape of the Japanese yen and Swiss franc amid increasing US-China trade tensions. Further denting risk appetite was a lack of progress over Brexit, with the month of May spelling the end of PM May’s premiership but heralding little in the way of fresh developments.
Turning to the month ahead, political and geopolitical issues appear set to continue dominating, with US-China trade tensions seemingly here to stay. In the UK, economic data will likely continue taking a back seat, with the Conservative Party leadership contest, and identity of the next Prime Minister, sure to be in focus. Finally, attention will remain on global monetary policy, with the possibility for global central banks to shift further towards the dovish end of the spectrum.
To find out more about what's in store for sterling and other currencies, read our June Currency Outlook.