01/10/2025
Written by: Ian Morley
Daily Currency Market Update – 8th August 2025
GBP/EUR
Summary: GBP/EUR rebounded above 1.1500 after the Bank of England delivered a 25 bp rate cut to 4.00%. The vote split (5–4) and Bailey’s cautious tone signalled a “hawkish cut,” tempering expectations for further easing. Meanwhile, the Euro remained soft following weak German industrial data and lingering trade uncertainty.
Outlook: If ECB pause expectations hold and UK inflation remains sticky, GBP/EUR may consolidate near current levels. Eurozone sentiment and UK employment data next week will be key.
GBP/USD
Summary: GBP/USD climbed to 1.3450, its highest since late July, as traders pared BoE rate cut bets following the narrow vote margin. The Dollar remained subdued amid speculation that Fed Governor Waller could replace Powell, and soft US labour data reinforced September rate cut expectations.
Outlook: With Fed commentary and US CPI due next week, GBP/USD may remain supported. Any dovish Fed signals or strong UK data could extend gains.
EUR/USD
Summary: EUR/USD retreated from 1.1700 after failing to hold gains, as the Dollar stabilised on Fed succession speculation. Bloomberg reported Waller as a frontrunner to replace Powell, which helped limit USD downside. German industrial data disappointed, and ECB pause expectations offered modest Euro support.
Outlook: If US inflation surprises and Fed rhetoric shifts, EUR/USD may test lower levels. Eurozone data and trade developments will also influence direction.
USD/AUD
Summary: AUD/USD extended gains toward 0.6540, buoyed by upbeat Chinese export data and improved risk sentiment. The Aussie also benefited from strong Australian trade surplus figures and expectations of a measured RBA rate cut next week.
Outlook: If global risk appetite holds and US Dollar remains soft, AUD/USD may attempt further upside. RBA commentary and Chinese data remain pivotal.
USD/CAD
Summary: USD/CAD trades below 1.3750 ahead of Canadian employment data. The pair remains pressured by Fed rate cut expectations and soft US macro data, though downside is cushioned by weak oil prices and dovish BoC signals.
Outlook: Canadian labour data will be key. If job growth disappoints and BoC easing bets rise, USD/CAD may rebound. Oil trends and Fed commentary will also guide movement.
USD/CHF
Summary: USD/CHF holds near 0.8060, steady after recent volatility. The Swiss Franc faces pressure from the newly enacted 39% US tariff, while the SNB remains dovish amid subdued inflation. Fed rate cut expectations continue to weigh on the Dollar.
Outlook: If Swiss trade tensions escalate and Fed signals easing, USD/CHF may remain range bound. SNB policy and US inflation data will shape direction.
Final Summary
Sterling rallied after the BoE’s “hawkish cut,” while the Euro softened on weak German data and cautious ECB expectations. The US Dollar stabilised amid Fed succession speculation and soft labour data. Commodity-linked currencies like the Aussie and Loonie are mixed, with trade and employment data in focus. The Swiss Franc remains pressured by tariff concerns. Focus now turns to Canadian jobs data and upcoming US inflation figures for fresh momentum.