01/10/2025
Written by: Ian Morley
Daily Currency Market Update – 23rd June 2025
GBP/EUR
Summary: GBP/EUR slipped below 1.1680 in early European trading as the Pound came under pressure from last week’s sharp drop in UK Retail Sales and rising geopolitical tensions. The Euro remains supported by the European Central Bank’s signal that it will pause rate cuts despite inflation easing below target. Traders are now focused on today’s flash PMI data from both the UK and Eurozone.
Outlook: If UK PMIs disappoint, GBP/EUR could extend losses. Conversely, any signs of resilience in UK services activity may help Sterling stabilise.
GBP/USD
Summary: GBP/USD rebounded from overnight lows to trade near 1.3450 after initially falling on news that the US had bombed three Iranian nuclear facilities. The Pound remains vulnerable amid heightened geopolitical risk and weak domestic data, while the US Dollar benefits from safe-haven demand.
Outlook: Market sentiment will hinge on Iran’s response to the US strikes and today’s US PMI data. A further escalation in tensions could weigh on risk assets and support the Dollar.
EUR/USD
Summary: EUR/USD edged lower to around 1.1480 as safe-haven flows lifted the US Dollar following the US military’s involvement in the Israel-Iran conflict. The Euro remains underpinned by the ECB’s hawkish tone, with President Lagarde expected to speak later today.
Outlook: If Lagarde maintains a confident stance and Eurozone PMIs show improvement, EUR/USD could find support. However, geopolitical risks may continue to favour the Dollar in the near term.
USD/AUD
Summary: AUD/USD trades below 0.6450 despite stronger-than-expected Australian PMI data. Risk aversion following the US airstrikes on Iran has weighed on the Aussie, overshadowing the improvement in business activity.
Outlook: The pair’s direction will depend on global risk sentiment and US PMI results. If tensions ease and US data softens, AUD/USD may recover modestly.
USD/CAD
Summary: USD/CAD holds steady above 1.3750, supported by safe-haven flows into the US Dollar. Crude oil prices remain elevated amid fears of supply disruption, lending some support to the Canadian Dollar.
Outlook: Traders will watch Canadian inflation data and Fed Chair Powell’s upcoming testimony for further direction. Oil price dynamics will also remain a key driver.
USD/CHF
Summary: USD/CHF trades with a negative bias below 0.8200 as the Swiss Franc benefits from safe-haven demand. The pair remains range-bound, with the Dollar supported by Fed hawkishness and the Franc underpinned by geopolitical concerns.
Outlook: The market awaits US PMI data and Iran’s response to the US strikes. Any escalation could push USD/CHF lower, while signs of de-escalation may limit CHF gains.
Final Summary
Geopolitical tensions following the US bombing of Iranian nuclear sites have overshadowed economic data to start the week. The Pound remains under pressure amid weak UK data and rising risk aversion, while the Euro holds steady on ECB hawkishness. The US Dollar is supported by safe-haven flows, weighing on risk-sensitive currencies like the Aussie and Loonie. The Swiss Franc continues to benefit from geopolitical uncertainty. Traders will closely monitor PMI releases and geopolitical developments for further market direction.