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Market Insight 06-10-2025

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  • Market Insight 06-10-2025

Daily Market Update: 6 October 2025

Key Currency Pair Movements

GBP/EUR

  • Summary: The cross is trading cautiously around 1.15 this morning.
  • Outlook: The pair is consolidating as the US Dollar (USD) strength puts general pressure on major pairs. Pound Sterling (GBP) is trading against a resilient Euro (EUR), which is finding modest support from easing energy costs in the Eurozone despite sluggish growth data.

GBP/USD

  • Summary: The pair is under pressure as the US Dollar recovers its footing.
  • Outlook: Pound Sterling is retreating as the USD Index (DXY) firms near 98.00. Despite longer-term forecasts for dollar weakness, the continuing US government shutdown and subsequent volatility are dominating the short-term sentiment, keeping the Pound on the defensive.

EUR/USD

  • Summary: The pair registered moderate losses, trading around 1.1676 early Monday.
  • Outlook: The Euro (EUR) is pressured by the firmer US Dollar. The pair is expected to remain range-bound as US data is delayed. Investors are focussing on the Eurozone Sentix Investor Confidence and Retail Sales figures for August, which could provide fresh direction in the absence of key US releases.

AUD/USD

  • Summary: The risk-sensitive pair is trading near 0.6597 in a sideways consolidation phase.
  • Outlook: The Australian Dollar (AUD) is holding steady against the US Dollar, trading sideways. A positive global risk sentiment, lifted by a surge in AI-driven tech stocks, supports the AUD, but this is being offset by the underlying strength of the USD.

USD/CAD

  • Summary: The pair is showing underlying firmness near 1.4010.
  • Outlook: The general USD recovery is providing support to the pair. The Canadian Dollar (CAD) is expected to remain under pressure ahead of the Canadian employment report due later in the week, which is forecast to show continued weakness, providing a favourable environment for USD/CAD bulls.

USD/CHF

  • Summary: The pair is edging down near 0.7955, suggesting underlying strength in the Swiss Franc.
  • Outlook: The Swiss Franc (CHF) is attracting bids after Swiss National Bank (SNB) Chairman Martin Schlegel expressed confidence that inflationary pressures will accelerate in the coming quarters. This reduces fears of the SNB needing to push interest rates into negative territory, thus supporting the Franc despite the stronger US Dollar.

Final Summary

The US Dollar (USD) is starting the week with a firmer bias, with the USD Index (DXY) jumping 0.3% to trade near 98.00. This strength comes despite the continuing US federal government shutdown, which enters its sixth day. The shutdown has halted the release of critical US labour market and inflation data, forcing investors to focus on private-sector indicators. The Senate is scheduled to meet today to vote on the stopgap bill for the fifth time.