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June 2025 Market Roundup

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Monthly Market Update: June 2025

Currency Movements:

US Dollar (USD)
June was a turbulent month for the US Dollar. After starting on the back foot due to weak employment data and fiscal uncertainty, the Dollar rebounded mid-month on safe-haven demand driven by geopolitical tensions in the Middle East. However, by month-end, the Greenback faced renewed pressure from political instability, rising expectations of a September Fed rate cut, and disappointing inflation and consumer spending data.

British Pound (GBP)
Sterling held firm through most of June, supported by the UK’s exemption from new US trade tariffs and stronger-than-expected PMI and retail sales data. While initial losses followed disappointing inflation and GDP figures mid-month, the Pound rallied in the second half thanks to reduced geopolitical risks, ongoing BoE caution on rate cuts, and the UK–US trade deal coming into force.

Euro (EUR)
The Euro showed resilience, supported by hawkish European Central Bank (ECB) commentary and optimism around easing global trade tensions. While disappointing German economic indicators and cautious ECB rhetoric weighed on the currency at times, the Euro finished the month stronger, gaining ground against both the USD and GBP.

Swiss Franc (CHF)
The Swiss Franc surged throughout June, reaching multi-year highs as geopolitical tensions and concerns over US political interference in monetary policy drove strong safe-haven demand. The SNB cut rates to 0.00%, but CHF remained firm, with USD/CHF breaking below the 0.8000 level.

Australian Dollar (AUD)
The Aussie saw mixed performance, starting June on the defensive due to weak trade data and cautious RBA guidance. However, stronger-than-expected Chinese and domestic inflation data, along with improved risk sentiment, helped AUD recover later in the month.

Canadian Dollar (CAD)
The Loonie tracked global risk trends and oil prices, initially weighed down by geopolitical fears but recovering as trade optimism grew. Canadian economic data remained relatively firm, and the resumption of US–Canada trade talks lent further support.

Events Driving the Market:

  1. Federal Reserve & US Political Risk
    Early signs of a slowing US economy and soft inflation data sparked renewed rate cut speculation. Mid-month, President Trump’s criticism of Fed Chair Powell and threats of replacement created political noise that weighed on USD, fuelling safe-haven demand elsewhere.
  2. Bank of England Policy Outlook
    Weaker-than-expected UK GDP, inflation, and labour data in mid-June raised expectations of a BoE rate cut. However, the Bank maintained a cautious stance, helping support Sterling. The Pound was also boosted by the UK–US trade agreement, which came into force at month-end.
  3. European Central Bank Tone
    The ECB kept rates steady but remained cautious, with President Lagarde signalling further decisions would remain data-dependent. Mixed data from Germany and France limited gains, but EUR/USD climbed above 1.1700 as USD weakened.
  4. Geopolitical Tensions & Safe-Haven Flows
    The Israel–Iran conflict dominated headlines mid-month, fuelling demand for safe-haven assets. The CHF surged, USD initially rose on risk aversion but later faltered, while GBP and EUR reacted to shifting sentiment. The ceasefire towards month-end helped ease volatility.
  5. Commodity Prices & Trade Optimism
    Improved Chinese data and signs of progress in US–China and US–Canada trade talks supported commodity-linked currencies. Despite falling oil prices late in the month, CAD and AUD held up well, supported by positive domestic data.

Market Outlook:

As we head into July, markets will be focused on upcoming US inflation and employment data to reassess the likelihood of a Fed rate cut in September. Central bank communication, particularly from the BoE and ECB, will be closely monitored, alongside progress on global trade talks.

Sterling may remain supported if UK data continues to stabilise, while the Euro could benefit from a weaker Dollar backdrop. Commodity currencies are expected to remain sensitive to Chinese data and oil prices. Meanwhile, CHF could stay elevated if geopolitical or political uncertainty persists in the US.