02/10/2025
Written by: Ian Morley
Daily Currency Update – 24th April 2025
GBPEUR
Summary:
The Pound initially rose above 1.17 during early trading on Wednesday, supported by improved global risk appetite. However, it quickly reversed course and fell back to 1.1665 following weaker-than-expected UK economic data. The latest PMIs showed a sharp contraction in both manufacturing and services, dragging overall business sentiment to its lowest level since 2022. Meanwhile, the Euro benefited from relatively more resilient Eurozone data and better sentiment around fiscal spending plans across the bloc.
Outlook:
With the UK economy showing signs of slowing and market participants heavily pricing in a Bank of England rate cut in May, the pound could remain under pressure. Meanwhile, if Eurozone sentiment stabilises and fiscal tailwinds materialise, further gains for the euro are possible, potentially pushing the pair closer to 1.16 in the near term.
EURUSD
Summary:
The euro found support around 1.1300 on Thursday after a two-day correction. Earlier losses stemmed from improved US economic sentiment and hopes of de-escalating trade tensions. However, a softening tone from the Federal Reserve’s Beige Book, which highlighted weakening conditions across the US economy, weighed on the dollar and helped the euro recover.
Outlook:
If optimism grows around a US-China trade resolution and incoming US data remains stable, the dollar may regain some ground. However, medium-term concerns about a US slowdown could keep the euro supported above 1.1300.
GBPUSD
Summary:
The pound edged higher to around 1.3270 on Thursday, recovering from earlier losses. The dollar was pressured by renewed uncertainty surrounding President Trump’s tariff policies and concerns over US economic growth. However, expectations of a May rate cut from the Bank of England limit GBP’s upside.
Outlook:
The pair’s direction will hinge on whether the US trade situation escalates or calms. In the meantime, strong UK retail sales data or a shift in BoE commentary could offer fresh momentum for the pound.
USDAUD
Summary:
The Australian dollar remains under pressure but found a temporary floor as the US dollar lost steam. A cautious tone in the Fed’s Beige Book and slowing US PMI readings helped support the Aussie, although concerns about a potential RBA rate cut in May persist.
Outlook:
AUD could see limited upside unless trade tensions ease significantly or Australian data surprises to the upside. With Westpac forecasting a 25bps RBA cut in May, the balance of risks remains tilted to the downside.
USDCAD
Summary:
USD/CAD dropped toward 1.3850 after weak US PMI figures and cautious Fed commentary. However, the Canadian dollar remains under pressure due to uncertainty about further US auto tariffs and a downgraded Canadian GDP forecast from the IMF.
Outlook:
If oil prices remain stable and BoC policy holds steady, CAD may find support. However, any signs of worsening US-Canada trade friction could push USDCAD higher again.
USDCHF
Summary:
The Swiss franc firmed slightly against the US dollar, with the pair slipping below 0.8300. Weaker-than-expected US economic indicators and continued uncertainty around trade weighed on USD. However, a broadly improved risk tone capped CHF’s strength.
Outlook:
If global sentiment deteriorates, safe-haven demand for CHF could return more strongly. Conversely, any breakthrough in US-China trade talks may limit downside for USDCHF.
Final Summary:
The US dollar remains on the back foot amid concerns over Trump’s evolving trade strategy and signs of softer economic momentum. While the pound and euro saw brief gains, disappointing UK data and cautious central bank expectations continue to shape sentiment. Traders remain focused on trade developments and upcoming economic data for cues on direction.