September 2025 Market Roundup

• Written by: Ian Morley
• 30/09/2025

Monthly Market Update: September 2025

Currency Movements:

US Dollar (USD)
The Dollar traded with heightened volatility in September. Early gains were driven by safe-haven flows, stronger macro data, and speculation of a September Fed rate cut. Mid-month, hawkish commentary from Fed Chair Powell and firm GDP revisions reinforced USD strength. However, by month-end, political risk around a looming US government shutdown pressured the Dollar lower, particularly against the Euro and Sterling.

British Pound (GBP)
Sterling faced persistent pressure through September amid UK fiscal worries, rising gilt yields, and dovish commentary from BoE officials. While resilient consumer spending and stronger GDP data offered moments of support, expectations of future BoE easing weighed on sentiment. By the close of the month, GBP had slipped to multi-week lows against both USD and EUR, despite modest relief from a positive GDP revision.

Euro (EUR)
The Euro traded steadily through much of September, supported by stable inflation readings and cautious but steady ECB messaging. Political instability in France and weak German retail data capped upside momentum, but by month-end EUR/USD gained ground as the Dollar softened on US fiscal concerns. German GDP and CPI readings were mixed, keeping the Euro’s recovery limited.

Swiss Franc (CHF)
The Franc maintained firm footing throughout September, supported by safe-haven demand. Despite subdued domestic inflation and ongoing speculation of SNB easing, CHF remained strong against both USD and EUR. USD/CHF hovered around historic lows as investors sought shelter from political and fiscal uncertainty.

Australian Dollar (AUD)
The Aussie saw two-way moves in September. Early support came from stronger Chinese PMI and upbeat Australian GDP, but this faded as soft labour data weighed on sentiment. A late boost followed firm domestic CPI figures, which pared RBA rate cut expectations, though AUD/USD remained capped below 0.6600.

Canadian Dollar (CAD)
The Loonie weakened over the month as soft domestic employment and retail data combined with falling oil prices. Expectations of further BoC easing also weighed on sentiment. Despite some relief from a modest GDP rebound, USD/CAD closed the month near 1.3910, reflecting CAD’s relative underperformance.

Events Driving the Market:

1. Federal Reserve Policy & US Fiscal Risk
   The Fed maintained a cautious tone, with Powell stressing data dependency. Strong GDP and employment data boosted USD mid-month, but government shutdown fears at month-end dragged the Dollar lower across the board.
2. Bank of England & Fiscal Concerns
   BoE officials adopted a more dovish tone, with Deputy Governor Ramsden signalling scope for policy loosening. Rising UK gilt yields and fiscal worries added pressure to GBP, despite stronger GDP and retail sales figures.
3. ECB Messaging & Eurozone Data
   Stable CPI figures and cautious ECB rhetoric underpinned the Euro, though weak German retail sales and French political instability weighed. Gains were ultimately driven more by late-month USD weakness than Eurozone strength.
4. SNB Policy Outlook & Safe-Haven Demand
   The Swiss Franc continued to attract safe-haven flows despite subdued inflation. The SNB’s decision to hold rates at 0% reinforced a dovish stance, but CHF remained firm on geopolitical and fiscal caution.
5. Commodity Currencies & Global Data
   AUD was buoyed by stronger CPI and Chinese PMI but capped by weak jobs data. CAD underperformed on falling oil prices and weak domestic retail data, keeping USD/CAD near multi-month highs.

Market Outlook:

As October begins, market attention will focus on whether the US government avoids a shutdown and how this impacts Fed decision-making. In the UK, BoE commentary and upcoming inflation data will be pivotal in shaping GBP sentiment, while fiscal concerns remain a headwind. The Euro could benefit further from Dollar weakness, though German data and French politics pose risks. The Swiss Franc is likely to remain supported by safe-haven demand, while AUD and CAD will remain sensitive to Chinese growth data, oil prices, and domestic central bank outlooks.