Market Insight 25-09-2025

• Written by: Ian Morley
• 25/09/2025

Daily Market Update: 25 September 2025

Key Currency Pair Movements

GBP/EUR

• Summary: The GBP/EUR cross remained steady near 1.1450 during the early European trading hours as traders showed caution ahead of the German GfK Consumer Confidence Survey.
• Outlook: Pound Sterling (GBP) may lose ground due to a recent UK PMI report that indicated a cooling job market and weakening overseas business activity, which could push the Bank of England (BoE) towards a more dovish stance on interest rates. The Euro (EUR) struggled after a weaker-than-expected German business sentiment report.

GBP/USD

• Summary: Pound Sterling (GBP) fell more than 0.5% on Wednesday, touching its lowest level since early September below 1.3430. It is currently in a consolidation phase around 1.3450.
• Outlook: The US Dollar’s (USD) weakening is giving the pair some ground for recovery. However, rising UK fiscal worries, following a significant increase in public borrowing, along with downbeat economic data, may weigh on the Pound Sterling in the near term.

EUR/USD

• Summary: The Euro has fallen more than 0.6%, erasing this week’s gains, and is now moving sideways around 1.1750.
• Outlook: The Euro has been under pressure due to a downbeat German GfK Consumer Confidence Index, which deteriorated to -22.3, and the weak IFO German Business Climate Survey. This has increased concerns about the momentum of the region’s leading economy.

AUD/USD

• Summary: The Australian Dollar is trading higher as prospects for a Reserve Bank of Australia (RBA) rate cut in November fade.
• Outlook: San Francisco Federal Reserve’s (Fed) Daly’s comments that more rate cuts may be needed to restore price stability and support jobs could strengthen the Australian Dollar.

USD/CAD

• Summary: The US Dollar has been supported by a risk-averse market atmosphere. Additionally, data showing a 20.5% increase in New Home Sales in August has further supported the currency. The pair is trading around 1.3850.
• Outlook: The pair remains in a consolidation phase ahead of speeches from several Federal Reserve policymakers.

USD/CHF

• Summary: The USD/CHF pair is in a consolidation phase above 0.7950 after rising about 0.5% on Wednesday.
• Outlook: The Swiss National Bank (SNB) is expected to hold its policy rate unchanged at 0%. The bank is concerned about growth and employment, and its policy statement was tilted to the dovish side, citing risks from US tariffs.

Final Summary

Major currency pairs are struggling to find a clear direction as markets await new catalysts, including German business sentiment and US housing data. The Euro has softened against the US Dollar following weaker-than-expected German business climate data, while Pound Sterling has also lost ground due to disappointing UK PMI figures and fiscal concerns. The Canadian Dollar has weakened against the US Dollar as cautious market sentiment has increased demand for the safe-haven greenback. The Australian Dollar, however, is outperforming its peers after stronger-than-expected inflation data. Federal Reserve Chairman Jerome Powell has maintained a cautious stance on further rate cuts, highlighting the challenges of balancing inflation risks with labour market weakness, although the market continues to anticipate further easing.