01/10/2025
Written by: Ian Morley
Daily Currency Market Update – 17th June 2025
GBP/EUR
Summary: GBP/EUR remains firm around 1.1730 in early European trading as traders anticipate the ZEW Economic Sentiment Surveys from Germany and the Eurozone. The Euro is supported by expectations that the European Central Bank (ECB) will pause its easing cycle, with ECB President Christine Lagarde stating that rate reductions are nearing an end. Meanwhile, the Pound remains under selling pressure as markets price in Bank of England (BoE) rate cuts later this year.
Outlook: If the ZEW survey shows improved sentiment, the Euro could gain further ground. However, any signs of economic weakness may limit upside potential.
GBP/USD
Summary: GBP/USD consolidates above mid-1.3500s as the market await key central bank meetings this week. The Pound remains under pressure amid growing expectations of BoE rate cuts, while the US Dollar struggles with trade-related uncertainties. Rising geopolitical tensions in the Middle East have reinforced the Greenback’s safe-haven appeal, capping GBP/USD gains.
Outlook: The UK Consumer Price Index (CPI) release on Wednesday and the BoE policy meeting on Thursday will be crucial for Sterling’s direction. Meanwhile, the Federal Reserve’s rate decision on Wednesday will shape USD sentiment.
EUR/USD
Summary: EUR/USD hesitates within previous ranges, trading near 1.1550 as risk appetite fades. Concerns over escalating Middle East tensions have provided support to the US Dollar, while investors await the Fed’s monetary policy decision. The Euro remains stable as ECB policymakers signal confidence in current policy.
Outlook: The ZEW Economic Sentiment Survey and US Retail Sales data later today will be key for EUR/USD movement. If risk aversion persists, the pair may struggle to break higher.
USD/AUD
Summary: AUD/USD rebounds, trimming earlier losses as concerns over Israel-Iran tensions ease. Reports indicate that Iran has asked several countries, including Oman and Qatar, to urge US President Trump to initiate a ceasefire, improving risk sentiment. Meanwhile, traders await Australia’s upcoming labour market data for further direction.
Outlook: If risk appetite improves and Australian employment figures exceed expectations, AUD/USD could extend gains.
USD/CAD
Summary: USD/CAD edges higher to near 1.3580 as persistent Middle East geopolitical tensions support the US Dollar. The Canadian Dollar remains sensitive to crude oil price fluctuations, with extended gains in oil prices providing some support. Meanwhile, the market awaits US Retail Sales data for fresh impetus.
Outlook: If US economic data disappoints, USD/CAD could see further volatility. Crude oil price trends will also influence near-term movement.
USD/CHF
Summary: USD/CHF weakens below 0.8150 as safe-haven flows into the Swiss Franc persist. The ongoing conflict between Israel and Iran has heightened geopolitical risks, supporting CHF demand. Meanwhile, traders brace for the US Retail Sales release ahead of the Fed’s interest rate decision.
Outlook: If geopolitical tensions escalate further, USD/CHF may continue its downward trajectory. However, any signs of easing risks could limit CHF gains.
Final Summary
Currency markets remain cautious ahead of key central bank meetings and geopolitical developments. The Pound struggles amid BoE rate-cut expectations, while the Euro holds firm as ECB policymakers signal confidence in current policy. The US Dollar finds support from safe-haven demand, while commodity-linked currencies like the Australian and Canadian Dollars react to risk sentiment and economic indicators. The Swiss Franc strengthens as geopolitical uncertainty persists. We will closely watch upcoming economic data and policy statements for further market direction.