30/09/2025
Written by: Ian Morley
Daily Currency Market Update – Tuesday, 2nd September 2025
GBP/EUR
Summary: GBP/EUR falls towards 1.1500 as the Euro gains ahead of Eurozone HICP data. ECB board member Isabel Schnabel stated that inflation risks are tilted to the upside and sees no justification for another rate cut.
Outlook: Euro strength may persist if inflation holds near the ECB’s 2% target. Sterling could find support from dampening expectations of BoE rate cuts, with traders eyeing Wednesday’s Monetary Policy Report Hearings.
GBP/USD
Summary: GBP/USD slides to near 1.3480 as the US Dollar strengthens ahead of ISM Manufacturing PMI. The Greenback gains following the extended US holiday, with investors focused on upcoming labour market data.
Outlook: GBP/USD may remain under pressure if US data supports Fed rate cut expectations. BoE is unlikely to cut rates this month, which may offer some Sterling resilience.
EUR/USD
Summary: EUR/USD retreats from Monday’s highs at 1.1735, trading just below 1.1700. Investors await preliminary Eurozone CPI figures, with inflation expected to remain steady near the ECB’s 2% target.
Outlook: Euro may stay supported by hawkish ECB commentary and solid macro data. US Dollar remains vulnerable amid political pressure on the Fed and rate cut speculation.
AUD/USD
Summary: AUD/USD edges lower below 0.6550 after a five-day rally. The Aussie faces pressure from US Dollar strength despite firmer Chinese PMI and upbeat domestic inflation.
Outlook: AUD may regain ground if Fed rate cut bets intensify. Australian data suggests reduced likelihood of RBA easing, which could underpin the currency.
USD/CAD
Summary: USD/CAD trades around 1.3750, supported by persistent US inflation concerns. Canadian Dollar faces headwinds from weaker Q2 GDP and trade tensions with the US.
Outlook: CAD may weaken further if BoC policy easing expectations grow. US labour data and Fed commentary will be key drivers.
USD/CHF
Summary: USD/CHF trades near 0.8015, lifted by modest US Dollar rebound. Upside may be capped by dovish Fed tone and geopolitical tensions supporting the Swiss Franc.
Outlook: Traders await Swiss Real Retail Sales and US ISM Manufacturing PMI. Safe-haven flows could support CHF amid ongoing Russia–Ukraine conflict.
Final Summary
Sterling weakens against both the Euro and Dollar as traders await BoE commentary and UK data. The Euro is buoyed by steady inflation expectations and hawkish ECB signals. The US Dollar gains ahead of key PMI and labour market releases, though political uncertainty clouds its outlook. Commodity currencies are mixed, with AUD pressured by Greenback strength and CAD weighed by domestic slowdown. The Swiss Franc remains stable, supported by safe-haven demand.