01/10/2025
Written by: Ian Morley
Daily Currency Market Update – 30th May 2025
GBP/EUR
Summary: GBP/EUR edges higher above 1.1880 after rebounding from Thursday’s losses, following weaker-than-expected German Retail Sales data. The Pound Sterling found support after the International Monetary Fund (IMF) raised the UK GDP growth forecast to 1.2% from 1.1%. Meanwhile, the Euro remains subdued as traders await German Consumer Price Index (CPI) figures, which could offer further direction.
Outlook: If German inflation data surprises to the upside, the Euro may gain some ground. However, lingering uncertainty over ECB rate cuts could continue to weigh on EUR sentiment.
GBP/USD
Summary: GBP/USD holds near 1.3500, recovering from Thursday’s volatile trading session. Market sentiment remains cautious as investors assess mixed US macroeconomic data and trade uncertainties. The Bank of England reiterated that UK monetary policy is driven by domestic economic conditions, dampening speculation about external tariff influences.
Outlook: The US Personal Consumption Expenditures (PCE) Price Index release later today will be a key driver for GBP/USD. If inflation eases more than expected, the Dollar could weaken, supporting Sterling gains.
EUR/USD
Summary: EUR/USD is hovering around the mid-1.1300s, struggling to gain traction despite easing US-EU trade tensions. The Euro found some support after President Trump delayed the EU tariff deadline until July, but persistent concerns over ECB policy limits upside potential.
Outlook: Traders are closely watching the US PCE Price Index release for fresh impetus. If inflation data reinforces expectations of further Fed rate cuts, EUR/USD could push higher.
USD/AUD
Summary: AUD/USD remains subdued near 0.6400, pressured by disappointing Australian Retail Sales figures. The Aussie struggled as monthly retail sales unexpectedly fell by 0.1% in April. Meanwhile, ongoing US-China trade uncertainties weigh on risk sentiment.
Outlook: The US PCE inflation report and potential People’s Bank of China (PBoC) stimulus measures will be key factors influencing AUD/USD movement.
USD/CAD
Summary: USD/CAD trades modestly higher above 1.3800 as weaker crude oil prices undermine the Canadian Dollar. The Greenback found some dip-buying interest ahead of the US PCE inflation release, while expectations of a stable Bank of Canada policy kept CAD gains limited.
Outlook: The US inflation report will set the tone for USD/CAD direction. If inflation prints below expectations, the Dollar may struggle, offering some relief for CAD.
USD/CHF
Summary: USD/CHF continues its downward trend below 0.8250 amid persistent trade-related uncertainties. The Swiss Franc attracts safe-haven flows as global geopolitical risks remain elevated, while expectations of further Swiss National Bank rate cuts limit CHF gains.
Outlook: The focus will be on US inflation data later today. If the PCE report indicates rising inflationary pressures, USD/CHF could stabilise, but lingering risk concerns may keep the pair under pressure.
Final Summary
Currency markets remain in a cautious stance ahead of key US inflation data, which will influence Federal Reserve rate-cut expectations and broader market sentiment. Sterling benefits from improved UK growth forecasts, while the Euro remains pressured ahead of German CPI figures. The US Dollar struggles with trade uncertainties, while commodity-linked currencies like the Australian and Canadian Dollars react to economic data and crude oil price trends. We will focus on upcoming inflation data and central bank guidance for further direction.