30/09/2025
Written by: Ian Morley
Daily Currency Market Update – 4th September 2025
GBP/EUR
Summary: GBP/EUR trades uneasily around 1.1516 as the Euro gains modest support ahead of Eurozone Retail Sales. ECB board member Schnabel reiterated that rates are already mildly accommodative and sees no justification for further cuts. Meanwhile, UK Finance Minister Rachel Reeves pushed back against fiscal pessimism, pledging tight spending and confirming the budget date for 26th November.
Outlook: Eurozone Retail Sales and Friday’s Q2 GDP will guide near-term Euro sentiment. Sterling remains vulnerable to fiscal scrutiny but may find support if gilt yields stabilise.
GBP/USD
Summary: GBP/USD softens to 1.3430 in early Asian trade, weighed by lingering UK fiscal concerns. Reeves’ budget announcement offered little relief, as investors remain cautious ahead of key US data. The Dollar is supported by expectations of a Fed rate cut, with markets pricing in 97% odds for a 25bps move this month.
Outlook: US ISM Services PMI and ADP Employment Change will be pivotal. Sterling may stabilise if UK fiscal messaging improves and US data disappoints.
EUR/USD
Summary: EUR/USD ticks lower to 1.1650 as traders await Eurozone Retail Sales and US labour data. The pair remains range-bound despite softer US JOLTS figures and dovish Fed commentary.
Outlook: Euro may benefit from steady inflation and easing debt fears, but upside remains capped ahead of Friday’s NFP. US ADP and ISM Services PMI will shape short-term direction.
AUD/USD
Summary: AUD/USD declines below 0.6550 despite a robust July trade surplus of A$7.3bn. Exports rose 3.3% m/m while imports fell 1.3%, beating expectations. However, the Aussie remains pressured by cautious sentiment and firm US Dollar.
Outlook: AUD may find support if US data reinforces Fed dovishness. Domestic resilience and Chinese PMI strength continue to buffer downside risks.
USD/CAD
Summary: USD/CAD rises to 1.3810, extending its four-day rally. The pair is buoyed by weaker oil prices and anticipation of US labour data. OPEC+ discussions on output hikes and Fed rate cut expectations add to volatility.
Outlook: Canadian jobs data on Friday will be key. Until then, USD/CAD may remain elevated if US data supports easing and oil remains soft.
USD/CHF
Summary: USD/CHF consolidates around 0.8040 ahead of Swiss CPI and key US releases. Swiss inflation is expected to remain flat m/m, with annual growth at 0.2%. The Dollar is supported by dovish Fed bets and risk-off sentiment.
Outlook: Swiss CPI and US ADP data will guide direction. A soft Swiss print may revive SNB easing speculation, while weak US data could cap USD upside.
Final Summary
Sterling remains under pressure amid UK fiscal concerns, while the Euro steadies ahead of key data. The US Dollar is firm but vulnerable to labour market softness, with Fed rate cut expectations nearing 97%. Commodity currencies are mixed, with AUD weighed by sentiment despite strong trade data, and CAD pressured by oil and BoC easing risks. The Swiss Franc trades cautiously ahead of inflation figures and global risk developments.