30/09/2025
Written by: Ian Morley
Daily Currency Market Update – 19th September 2025
GBP/EUR
Summary: GBP/EUR falls below 1.1500 despite stronger-than-expected UK Retail Sales. August Retail Sales rose 0.5% m/m and 0.7% y/y, beating forecasts. However, the Pound faces pressure after the BoE slowed its gilt run-off pace, announcing £70bn of sales over the next 12 months, down from £100bn previously. The Euro remains supported by cautious ECB commentary, with Vice President de Guindos stating current rates are appropriate.
Outlook: Sterling may remain subdued as traders digest the BoE’s dovish tone. Euro sentiment could firm if ECB officials continue to push back against further easing.
GBP/USD
Summary: GBP/USD drops toward 1.3500, extending its correction from this week’s high of 1.3726. The Pound is weighed by the BoE’s decision to hold rates at 4% and slow quantitative tightening. The Dollar gains on upbeat US data, with Initial Jobless Claims falling to 231K and the Philly Fed Manufacturing Index surging to 23.2.
Outlook: GBP/USD may remain under pressure if Fed officials reinforce a cautious easing stance. Traders will watch for comments from Fed President Mary Daly later today.
EUR/USD
Summary: EUR/USD retreats below 1.1800 as the Dollar firms on stronger US data. The Euro faces additional headwinds from political unrest in France, where anti-austerity protests are intensifying. ECB officials maintain a cautious tone, with de Guindos reiterating that monetary policy remains appropriate.
Outlook: Euro may struggle unless political tensions ease. US data and Fed commentary will guide near-term direction.
AUD/USD
Summary: AUD/USD weakens for a third session, pressured by softer Australian employment data and a firmer US Dollar. August Employment Change fell by 5.4K, missing expectations of a 22K gain, while the Unemployment Rate held at 4.2%. The Aussie finds some support from fading RBA rate cut bets, with only a 20% chance priced for September.
Outlook: AUD may stabilise if risk sentiment improves. Traders await developments from the Trump–Xi call and further clarity on US-China trade relations.
USD/CAD
Summary: USD/CAD holds steady near 1.3800, supported by Fed resilience and BoC dovishness. The BoC cut rates by 25bps to 2.5% on Wednesday, citing weaker labour data and easing inflation. Canadian Retail Sales data due later today may influence direction.
Outlook: CAD may face headwinds if retail data disappoints. Oil prices and Fed commentary will also be key drivers.
USD/CHF
Summary: USD/CHF trades firmly near 0.7930, extending its recovery after the Fed’s cautious rate cut. The Dollar is supported by Powell’s measured tone and stronger US data. Traders await next week’s SNB decision, with speculation mounting over potential negative rates amid subdued Swiss inflation.
Outlook: USD/CHF may remain supported if US data continues to outperform. SNB policy signals will be pivotal for CHF direction.
Final Summary
Sterling weakens despite upbeat retail data, as the BoE slows its gilt run-off and maintains a cautious tone. The Euro faces pressure from French political unrest, while the Dollar gains on strong US data and Powell’s measured post-Fed remarks. Commodity currencies are mixed, with AUD weighed by soft jobs data and CAD steady ahead of retail figures. The Swiss Franc trades cautiously, with attention turning to next week’s SNB decision.