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Market Insight 01-10-2025

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  • Market Insight 01-10-2025

Daily Market Update: 1 October 2025

Key Currency Pair Movements

GBP/EUR

  • Summary: The GBP/EUR cross is testing the 1.1460 level.
  • Outlook: The pair is trading in a choppy and volatile manner within a tight range as markets await the release of Eurozone inflation data for further clues about the European Central Bank’s (ECB) rate path. The Euro (EUR) was previously weighed down by a firmer British Pound following stronger-than-expected UK economic growth in the second quarter. The Eurozone’s preliminary Harmonized Index of Consumer Prices (HICP) is expected to show consumer inflation accelerating to a 2.2% year-on-year rate in September.

GBP/USD

  • Summary: The pair continues to stretch higher, trading above 1.3450 in the European morning.
  • Outlook: Pound Sterling (GBP) advanced, closing in positive territory for the third consecutive trading day on Tuesday. The pair is receiving support from the underlying US Dollar (USD) weakness following the government shutdown and benefited from upbeat UK Gross Domestic Product (GDP) data on Tuesday.

EUR/USD

  • Summary: The pair clings to small daily gains at around 1.1750 early Wednesday.
  • Outlook: Later in the session, investors will focus on the preliminary Harmonized Index of Consumer Prices (HICP) data for September, the European Central Bank’s (ECB) preferred gauge of inflation. German inflation surprised with a larger-than-expected pick-up on Tuesday, and ECB President Christine Lagarde affirmed the bank is ready to act if inflation risks shift.

AUD/USD

  • Summary: The pair stays in a consolidation phase at around 0.6600.
  • Outlook: This follows a rise of more than 0.5% on Tuesday. The consolidation phase is taking place amid the US Dollar’s ongoing bearish pressure due to the government shutdown.

USD/CAD

  • Summary: The pair extends its sideways grind above 1.3900.
  • Outlook: The sideways trading reflects market caution on the first day of the fourth quarter, with the US Dollar being pressured by the US government shutdown.

USD/CHF

  • Summary: The US Dollar is under pressure, while the Swiss Franc is trading firmly against its peers.
  • Outlook: The US Dollar’s slide is the result of the official US government shutdown. Meanwhile, the Swiss Franc (CHF) is firming up after Swiss National Bank (SNB) Chairman Martin Schlegel expressed confidence on Tuesday that inflationary pressures would “accelerate” in coming quarters.

Final Summary

The US Dollar (USD) remains under bearish pressure on the first trading day of the fourth quarter after the US Congress failed to pass a funding measure and the US federal government officially shut down. The USD Index dropped to a weekly low below 97.50 with the immediate reaction. This is the 15th time the US government has entered a shutdown since 1981.

The shutdown introduces significant uncertainty, as key macroeconomic data releases this week, such as the weekly Initial Jobless Claims and September Nonfarm Payrolls, could be delayed unless funding is restored. US stock index futures were last seen losing between 0.7% and 0.9%, pointing to a bearish opening on Wall Street.

Today’s US economic calendar features the ADP Employment Change and ISM Manufacturing Purchasing Managers’ Index (PMI) data for September. In the Eurozone, attention is on the preliminary Harmonized Index of Consumer Prices (HICP) data for September. The Swiss Franc (CHF) is notably firming, supported by the SNB Chairman’s comments on Tuesday that inflationary pressures would “accelerate” in the coming quarters.