01/10/2025
Written by: Ian Morley
Daily Currency Market Update – 11th August 2025
GBP/EUR
Summary: GBP/EUR in tight trading range as the Euro gained modest support from optimism surrounding a potential US–Russia summit. Expectations of increased European defence spending and easing trade tensions helped underpin the single currency. However, Sterling remains supported following last week’s “hawkish cut” from the Bank of England, where a narrow 5–4 vote signalled caution on further easing.
Outlook: With UK employment data and Eurozone ZEW sentiment due on Tuesday, GBP/EUR may remain range-bound. A dovish BoE tone or weak UK labour figures could pressure the Pound.
GBP/USD
Summary: GBP/USD extended its rally to 1.3480, marking a fifth consecutive daily gain. Sterling was buoyed by tempered BoE rate cut expectations and a softer US Dollar, which continues to face pressure from rising Fed easing bets. Fed Governor Bowman signalled support for three rate cuts this year, citing cooling labour market conditions.
Outlook: UK jobs data and US CPI on Tuesday will be pivotal. If inflation accelerates and UK employment softens, GBP/USD could face resistance near 1.3500.
EUR/USD
Summary: EUR/USD held near 1.1670 in quiet Monday trade, supported by risk-on sentiment and hopes of progress in US–China and US–Russia talks. The Euro benefited from speculation that the ECB may pause its easing cycle in September, while the Dollar weakened on dovish Fed expectations.
Outlook: US CPI and Eurozone ZEW sentiment will guide direction. A strong US inflation print could cap Euro gains, while soft data may support further upside.
USD/AUD
Summary: AUD/USD consolidated around 0.6520 ahead of Tuesday’s RBA rate decision. Markets expect a 25 bp cut to 3.6%, following soft Q2 inflation and rising unemployment. The Aussie remains supported by upbeat Chinese export data and stable risk sentiment.
Outlook: If the RBA delivers a dovish cut and US CPI surprises to the upside, AUD/USD may drift lower. Otherwise, risk appetite could support a rebound.
USD/CAD
Summary: USD/CAD climbed toward 1.3770, supported by weaker oil prices and cautious sentiment ahead of Tuesday’s US CPI. The Canadian Dollar remains pressured by trade concerns and expectations of BoC easing, while the US Dollar steadied after last week’s losses.
Outlook: Canadian jobs data and US inflation will be key. If oil remains soft and Fed cut bets persist, USD/CAD may hold above 1.3750.
USD/CHF
Summary: USD/CHF slipped to 0.8060, weighed by Fed rate cut expectations and soft US data. However, downside was limited by pressure on the Swiss Franc, which faces headwinds from the newly enacted 39% US tariff on Swiss exports. The SNB remains dovish, with inflation still near zero.
Outlook: If US CPI accelerates and Swiss trade tensions persist, USD/CHF may stabilise. Fed commentary and tariff developments will shape direction.
Final Summary
Sterling extended gains against the Dollar but softened versus the Euro, as BoE caution and global sentiment shaped flows. The Euro held firm amid trade optimism and ECB pause speculation, while the US Dollar remained under pressure from dovish Fed signals. Commodity-linked currencies like the Aussie and Loonie are mixed ahead of key central bank decisions and data. The Swiss Franc faces tariff-related headwinds. Focus now turns to Tuesday’s CPI and employment data for fresh momentum.