01/10/2025
Written by: Ian Morley
Daily Currency Market Update – 15th July 2025
GBP/EUR
Summary: GBP/EUR fell toward 1.1500 in early European trading, pressured by persistent concerns over UK fiscal stability following Friday’s second consecutive monthly GDP contraction. With the Bank of England now expected to cut rates in August, Sterling continues to trade defensively. Meanwhile, the Euro remains steady ahead of the ZEW Economic Sentiment Surveys and Eurozone Industrial Production data, though upside may be capped by EU retaliation threats over US trade policy.
Outlook: If UK economic momentum deteriorates further and the Eurozone data comes in firm, GBP/EUR may remain under downward pressure. Market focus will be on sentiment surveys and any developments in the EU’s proposed €72 billion tariff plan.
GBP/USD
Summary: GBP/USD is attempting a mild recovery toward 1.3450, supported by cautious optimism in markets and improved risk appetite. However, Sterling remains near three-week lows ahead of key US inflation data due later today, with traders wary of any signs that the Fed may delay rate cuts.
Outlook: If US CPI data prints hotter than expected, especially on the core measure, the Dollar could strengthen and pressure GBP/USD lower. Conversely, signs of tariff-driven inflation may prompt dovish Fed positioning, offering the Pound a lifeline.
EUR/USD
Summary: EUR/USD is rebounding toward 1.1700, snapping a four-day losing streak, buoyed by a softer Dollar tone and hopes of a tariff resolution between the EU and US. However, the pair remains confined below recent highs, awaiting confirmation from today’s ZEW survey and industrial output data.
Outlook: Euro resilience depends on upbeat sentiment data and further signs of tariff de-escalation. If US CPI surprises to the upside, EUR/USD may struggle to hold its gains.
USD/AUD
Summary: AUD/USD trades rangebound near 0.6550, supported by robust Chinese Q2 GDP growth of 5.2% and strong industrial output. However, downside risks persist from disappointing Chinese retail sales, geopolitical concerns, and the RBA’s cautious stance ahead of its August meeting.
Outlook: If US inflation accelerates and risk sentiment sours, AUD/USD may soften further. The Aussie will also react to any market commentary on China’s trade outlook and tariff implications.
USD/CAD
Summary: USD/CAD remains flat near 1.3700, with traders awaiting CPI prints from both Canada and the US. The pair has been rangebound despite Trump’s 35% tariff threat on Canadian goods, with recent strong Canadian employment data lending support to the Loonie.
Outlook: If Canadian inflation comes in hot and US CPI moderates, USD/CAD may drift lower. Oil price moves and geopolitical headlines will also play a role in near-term direction.
USD/CHF
Summary: USD/CHF edged lower to 0.7965 amid renewed safe-haven demand for the Swiss Franc. Markets remain cautious as Trump threatened 100% tariffs on Russia and further secondary levies, adding geopolitical uncertainty ahead of today’s CPI release.
Outlook: Swiss Producer and Import Prices and US CPI data will guide movement. If inflation spikes and tensions escalate, USD/CHF could retest multi-year lows below 0.7950.
Final Summary
Currency markets are in a cautiously optimistic mood as attention shifts from trade tensions to today’s pivotal US inflation report. The Pound remains pressured by weak domestic growth and rising rate-cut bets, while the Euro steadies amid hopes for a negotiated tariff resolution. Commodity-linked currencies are mixed, with strong Chinese data supporting the Aussie, and the Loonie buoyed by employment strength. The Dollar is broadly softer ahead of CPI, and the Swiss Franc continues to attract safe-haven flows amid geopolitical noise.