30/09/2025
Written by: Ian Morley
Daily Currency Market Update – 18th September 2025
GBP/EUR
Summary: GBP/EUR trades near 1.1515 ahead of the Bank of England’s rate decision. The Pound remains subdued following yesterday’s UK CPI data, which showed headline inflation holding at 3.8% y/y in August, below expectations of 3.9%. The Euro is steady after ECB Vice President de Guindos stated that current interest rates are appropriate given inflation trends.
Outlook: GBP/EUR may remain rangebound unless BoE commentary surprises. Traders will monitor UK Retail Sales on Friday and ECB speeches for further direction.
GBP/USD
Summary: GBP/USD dips toward 1.3615, pressured by a modest USD rebound post-Fed. The Fed cut rates by 25bps to 4.00–4.25% and signalled two more cuts this year. However, Chair Powell’s cautious tone helped the Dollar recover. The BoE is expected to hold rates at 4.0% later today.
Outlook: GBP/USD may react to BoE tone and Friday’s UK Retail Sales. Fed rate path and Powell’s “meeting-by-meeting” stance will guide USD sentiment.
EUR/USD
Summary: EUR/USD holds steady around 1.1815 after retreating from four-year highs. The Fed’s 25bps cut and signal of further easing supported the Euro, though Powell’s measured remarks capped gains. ECB officials suggest no immediate need for further cuts.
Outlook: Euro may remain supported if ECB maintains its current stance. Lagarde’s speech later today and US data will shape near-term direction.
AUD/USD
Summary: AUD/USD slips following weaker Australian employment data. August saw a decline of 5.4K jobs, missing expectations of a 22K gain, while the unemployment rate held at 4.2%. The USD gains modestly after Powell’s cautious Fed outlook.
Outlook: AUD may remain under pressure if domestic data softens further. US labour data and China trade developments will be key.
USD/CAD
Summary: USD/CAD trades around 1.3770, supported by firm USD and BoC easing. The BoC cut rates by 25bps to 2.5%, citing weaker labour market and easing inflation. Fed projections showed inflation ending 2025 at 3%, limiting deeper cuts.
Outlook: CAD may remain pressured if BoC signals further easing. US data and oil price trends will influence direction.
USD/CHF
Summary: USD/CHF rebounds to near 0.7900 after hitting a 14-year low. The Fed’s 25bps cut and cautious tone helped the Dollar recover. Swiss inflation remains subdued, with CPI at 0.2% y/y, and SNB commentary suggests reluctance to move rates into negative territory.
Outlook: USD/CHF may remain volatile as markets digest Fed and SNB signals. US labour data and Swiss inflation trends will guide direction.
Final Summary
Sterling trades cautiously ahead of the BoE decision, while the Euro steadies on ECB commentary. The US Dollar rebounds modestly after Powell’s measured post-Fed remarks, though further easing is still expected. Commodity currencies are mixed, with AUD pressured by weak jobs data and CAD weighed by BoC easing. The Swiss Franc holds firm amid subdued inflation and safe-haven demand.