01/10/2025
Written by: Ian Morley
Daily Currency Market Update – 27th June 2025
GBP/EUR
Summary: GBP/EUR remains range-bound near 1.1730 as traders weigh stronger UK PMI data against dovish Bank of England (BoE) commentary. While upbeat services activity continues to support Sterling, BoE Governor Bailey’s warnings about labour market softening and a gradual rate-cut path have capped upside. Meanwhile, the Euro is pressured by tariff uncertainty, with French President Macron threatening retaliation if the US maintains its 10% levy on EU goods.
Outlook: Eurozone Consumer Confidence data later today could influence direction. If sentiment weakens, GBP/EUR may edge higher, though BoE dovishness remains a limiting factor.
GBP/USD
Summary: GBP/USD trades just below 1.3750 after posting its highest daily close in over three years. The Pound remains firm despite UK labour market concerns, supported by resilient PMI data and a weaker US Dollar. The Greenback continues to struggle amid political pressure on the Federal Reserve, with President Trump reportedly preparing to replace Chair Powell.
Outlook: All eyes are on today’s US PCE Price Index. A soft inflation print could reinforce Fed rate-cut expectations and support further GBP/USD gains.
EUR/USD
Summary: EUR/USD consolidates above 1.1700, on track for a 2% weekly gain. The Euro is buoyed by easing geopolitical tensions and expectations of Fed rate cuts, while the Dollar remains under pressure from weak US data and Trump’s attacks on Fed independence.
Outlook: If today’s PCE data confirms subdued inflation, EUR/USD could test the 1.1750 resistance. However, any hawkish surprise may trigger a pullback.
USD/AUD
Summary: AUD/USD retreats slightly below 0.6550 after a four-day rally, as risk appetite cools. The Aussie was weighed down by Iran’s refusal to resume nuclear talks and lingering concerns over Fed leadership. Nonetheless, resilient Australian job vacancy data and stable Chinese growth expectations continue to offer support.
Outlook: The pair may remain volatile ahead of US inflation data. A dovish Fed tone could help AUD/USD resume its upward trend.
USD/CAD
Summary: USD/CAD trades near 1.3640 after falling over 0.6% on Thursday. The Loonie is supported by expectations for a solid Canadian GDP print later today, while the US Dollar remains under pressure from Fed credibility concerns and weak Q1 GDP data.
Outlook: Canadian GDP and US PCE inflation will be key. A strong Canadian print and soft US inflation could push USD/CAD lower.
USD/CHF
Summary: USD/CHF hovers near 0.8000, its lowest level in over a decade, as the Dollar continues to underperform. The Swiss Franc remains supported by safe-haven demand and the Swiss National Bank’s cautious inflation outlook, despite last week’s rate cut to 0%.
Outlook: If US inflation data disappoints and Fed uncertainty persists, USD/CHF could break below 0.8000. Any signs of renewed geopolitical tension may reinforce CHF strength.
Final Summary
The US Dollar remains under pressure amid political interference concerns and weak economic data, with today’s PCE inflation release likely to shape near-term direction. Sterling holds firm on resilient PMI data, though BoE dovishness tempers gains. The Euro is supported by Fed rate-cut expectations, while commodity-linked currencies like the Aussie and Loonie benefit from improved sentiment and domestic resilience. The Swiss Franc continues to attract safe-haven flows, keeping USD/CHF near multi-year lows.