02/10/2025
Written by: Ian Morley
Daily Currency Update – 28th April 2025
GBPEUR
Summary:
The pound has edged slightly lower against the euro after reaching a multi-week high above 1.1740 late last week. Hopes for a UK-US trade deal has helped support the pound, but cautious comments from UK Finance Minister Rachel Reeves about the timeline for a deal limited further gains. At the same time, expectations that the Bank of England will cut rates more slowly than the European Central Bank have kept downside pressures contained.
Outlook:
Although GBP/EUR has seen a slight retracement, sentiment remains supportive for the pound, particularly if UK-US trade negotiations progress. However, the risk of further weakness could build if the ECB maintains its dovish stance but the BoE shifts unexpectedly toward faster easing.
EURUSD
Summary:
EUR/USD has slipped slightly, trading around 1.1350 this morning. The euro remains under pressure as the US dollar benefits from signs of easing tensions between the US and China, with China exempting some US imports from tariffs.
Outlook:
Dovish expectations for the European Central Bank, combined with any continuation of improved US-China sentiment, could keep EUR/USD on the defensive. Key US economic data later this week will be closely watched.
GBPUSD
Summary:
GBP/USD is consolidating near the 1.3300 mark, after last week’s gains. The US dollar’s modest strength, helped by stabilising trade talks, has capped further pound advances, although positive UK retail sales data and hopes for a UK-US trade deal have limited downside risk.
Outlook:
The pair could remain range-bound until fresh catalysts emerge. If UK-US trade talks show real progress, GBP could resume its rally. Otherwise, stronger US data or further safe-haven flows could pressure GBP/USD lower.
USDAUD
Summary:
AUD/USD remains under pressure, trading lower for a second consecutive day as the US dollar strengthens. Signs of easing US-China tensions have supported the greenback while weighing on the risk-sensitive Australian dollar. Expectations of a May rate cut from the Reserve Bank of Australia have added to the pressure.
Outlook:
The Aussie could face further headwinds if US-China relations continue to stabilise and if upcoming RBA signals reinforce rate cut expectations.
USDCAD
Summary:
USD/CAD has edged higher, now hovering around 1.3880. A firmer US dollar, falling oil prices, and lingering uncertainty over trade dynamics have all combined to weigh on the Canadian dollar.
Outlook:
If oil prices remain under pressure and US-China talks continue to show progress, USD/CAD could extend higher. Canadian GDP data later this week will also be key for CAD’s next move.
USDCHF
Summary:
USD/CHF has softened slightly, trading near 0.8270. Trade uncertainty and cautious global sentiment are driving safe-haven demand for the Swiss franc, helping it to gain ground against the US dollar.
Outlook:
If upcoming US data disappoints or trade tensions re-escalate, the franc could strengthen further. However, a stronger US GDP or employment report could lend renewed support to the dollar.
Final Summary:
Markets are off to a cautious start to the week, with currencies trading in tight ranges after last week’s volatility. The US dollar is slightly firmer, supported by signs of easing US-China tensions, while the pound and euro have both lost some recent momentum. This week’s major focus will be on US GDP and employment data, which could set the tone for the next phase of currency movements.