01/10/2025
Written by: Ian Morley
Daily Currency Market Update – 11th July 2025
GBP/EUR
Summary: GBP/EUR slipped below 1.1600 after UK GDP contracted by 0.1% in May, marking a second consecutive monthly decline. Industrial and manufacturing output also disappointed, reinforcing expectations of a Bank of England rate cut in August. Meanwhile, the Euro remains steady despite looming tariff threats, as investors await clarity on US–EU trade negotiations.
Outlook: If UK fiscal concerns persist and Eurozone inflation holds firm, GBP/EUR may remain under pressure. ECB commentary and tariff headlines will be key drivers.
GBP/USD
Summary: GBP/USD fell to a two-week low near 1.3540 following weak UK growth data and rising US Dollar demand. The Greenback was buoyed by safe-haven flows after President Trump announced a 35% tariff on Canadian imports and hinted at blanket levies of 15–20% on other trade partners.
Outlook: With US CPI due Tuesday and UK employment data next week, volatility may increase. If trade tensions escalate, GBP/USD could face further downside.
EUR/USD
Summary: EUR/USD dipped below 1.1700 as the Dollar strengthened on safe-haven demand and strong US labour market data. Trump’s tariff threats against the EU added pressure to the Euro, despite upbeat German trade figures.
Outlook: Eurozone PPI and ECB speeches will guide direction. If US inflation surprises to the upside, EUR/USD may extend its decline.
USD/AUD
Summary: AUD/USD held near 0.6570, consolidating after recent losses. The Aussie was weighed down by Trump’s tariff announcement and mixed Chinese inflation data. RBA officials warned of persistent inflation risks, but expectations of an August rate cut remain.
Outlook: Risk sentiment and US CPI will be key. If global trade tensions intensify, AUD/USD could drift lower.
USD/CAD
Summary: USD/CAD trades just below 1.3700 after spiking on Trump’s 35% tariff announcement targeting Canadian goods. The Canadian Dollar remains vulnerable ahead of today’s employment report, with the unemployment rate expected to rise to 7.1%.
Outlook: If Canadian labour data disappoints, USD/CAD could extend gains. BoC rate cut expectations may also weigh on CAD.
USD/CHF
Summary: USD/CHF edged up to 0.7980 as safe-haven demand for the Swiss Franc remained firm amid global trade uncertainty. Trump’s tariff threats and geopolitical tensions continue to support CHF, while the Dollar benefits from strong jobless claims data.
Outlook: Swiss CPI and US inflation data will shape near-term movement. If risk aversion persists, USD/CHF may remain range-bound with a downside bias.
Final Summary
Markets turned risk-averse as Trump escalated trade tensions with sweeping tariff threats, boosting the US Dollar and weighing on risk-sensitive currencies. Sterling weakened on poor UK GDP and factory data, while the Euro struggled amid uncertainty over US–EU trade talks. The Aussie and Loonie remain pressured by tariff concerns and soft domestic indicators, and the Swiss Franc continues to attract safe-haven flows. We now look ahead to Canadian employment data and next week’s inflation releases for fresh direction.