April 2025 Market Roundup

• Written by: Ian Morley
• 30/04/2025

Monthly Market Update: April 2025

Currency Movements:

US Dollar (USD)

April was a volatile month for the US Dollar. Initially strong on safe-haven flows and tariff escalation fears, the greenback lost ground mid-month as recession worries and weak inflation data raised expectations of Federal Reserve rate cuts. However, signs of stabilisation in US-China trade talks and firmer US data towards the end of the month helped the USD regain some lost ground.

British Pound (GBP)

Sterling faced headwinds in April, particularly against the Euro, as expectations mounted for a May rate cut by the Bank of England. However, stronger-than-expected UK retail sales and positive trade headlines with the US provided intermittent support. Against the USD, GBP rallied mid-month but struggled to hold gains due to broader market caution.

Euro (EUR)

The Euro performed relatively well in April, particularly against the Pound, buoyed by safe-haven demand and a weaker Dollar early in the month. However, dovish ECB commentary and disappointing Eurozone economic data capped further upside, and EUR/USD ended the month slightly lower.

Canadian Dollar (CAD)

The Canadian Dollar faced pressure throughout April due to falling oil prices, renewed US auto tariff threats, and political uncertainty following a tight election. Stronger economic data and temporary pauses in tariff announcements helped limit losses, but CAD remained under pressure.

Australian Dollar (AUD)

The Aussie Dollar remained weak amid global trade fears, weak Chinese data, and anticipation of a May RBA rate cut. A brief recovery late in the month on stronger-than-expected inflation was short-lived as risk sentiment remained fragile.

Swiss Franc (CHF)

The Franc surged in April, reaching multi-year highs against the USD as safe-haven demand spiked during global trade and geopolitical uncertainty. Despite the Swiss National Bank’s reluctance to intervene, CHF remained firm throughout the month.

Events Driving the Market:

1. Trump’s Trade Tariffs
   April was dominated by escalating trade tensions as President Trump announced new tariffs on imports from Europe, Canada, and China. Markets reacted sharply, boosting safe-haven assets and putting pressure on risk-sensitive currencies.
2. Central Bank Rate Cut Expectations
   Speculation intensified around rate cuts from the BoE, ECB, and RBA. BoE is widely expected to cut in May, while ECB policymakers hinted at deeper cuts. This divergence in central bank policy remained a key driver of currency flows.
3. Safe-Haven Flows
   As trade tensions escalated and global growth fears mounted, the CHF and EUR (to a lesser extent) benefited from safe-haven demand, while the USD saw mixed flows depending on broader sentiment.
4. US Economic Data & Fed Outlook
   US inflation data disappointed mid-month, prompting markets to bring forward expectations of rate cuts. However, stabilising trade developments and firmer US GDP data helped the USD recover some strength by month-end.
5. UK Economic Performance
   Despite BoE rate cut expectations, the UK economy showed signs of resilience with stronger-than-expected retail sales. Political commentary around the UK-US trade deal also added some support to GBP.

Market Outlook:

As we enter May, attention will turn to central bank meetings, beginning with the Bank of England. The expected BoE rate cut will be closely scrutinised, particularly the tone around future easing. Meanwhile, any further developments in the US-China and US-EU trade negotiations will continue to influence global sentiment.

Safe-haven currencies like CHF may remain supported, while commodity currencies such as AUD and CAD could face continued pressure if trade tensions persist. The USD’s next leg will hinge on incoming inflation and labour data and evolving Fed expectations.