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Market Insight 21-10-2025

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  • Market Insight 21-10-2025

Daily Market Update: 21 October 2025

The trading action in financial markets remains choppy on Tuesday as investors continue to focus on the protracted US government shutdown and headlines regarding trade talks between the United States (US) and China.

Key Currency Pair Movements

  • GBP/EUR
    • Summary: The cross trades modestly higher above 1.1500 early Tuesday.
    • Outlook: The pair is being supported by the relatively better economic outlook in the UK compared to the Eurozone, which is grappling with the uncertainty surrounding the US-China trade talks.
  • EUR/USD
    • Summary: The pair stays under modest bearish pressure around 1.1618 in the European morning.
    • Outlook: Investors will pay close attention to the Eurozone Consumer Confidence data for October, which will be published later in the day.
  • GBP/USD
    • Summary: The pair is struggling to hold its ground and is trading below 1.3400 after recording a marginal loss on Monday.
    • Outlook: Market participants are looking ahead to data from the UK’s Office for National Statistics, which is scheduled for release in the European morning on Wednesday.
  • AUD/USD
    • Summary: The pair remains under modest bearish pressure, trading around 0.6482.
    • Outlook: Later today, the Reserve Bank of Australia (RBA) Governor Philip Lowe will be delivering a speech.
  • USD/CAD
    • Summary: The pair is inching higher and trades slightly above 1.4050 early Tuesday, following a marginal gain recorded on Monday.
    • Outlook: Attention is on the Canadian September Consumer Price Index (CPI) data due in the second half of the day. Annual CPI is forecast to rise to 2.3%, a faster pace than the 1.9% seen in August.
  • USD/CHF
    • Summary: The pair edges down to near 0.7960 during the late Asian trading session on Tuesday.
    • Outlook: The Swiss Franc (CHF) trades broadly calm despite increasing concerns over the Swiss economic outlook. The Swiss State Secretariat for Economic Affairs (SECO) confirmed the economy will expand by only 1.3% this year and slashed the Gross Domestic Product (GDP) growth forecast for 2026 to 0.9% from a previously anticipated 1.2%.

Final Summary

The market mood is tentative, driven by political and trade developments. Hopes for a trade deal were boosted after US President Donald Trump stated on Monday that he expects a “very strong deal” with China, confirming a meeting with Chinese President Xi Jinping next week in South Korea. On the domestic front, White House economic adviser Kevin Hassett has offered a positive outlook, suggesting the US government shutdown is “likely to end sometime this week,” which has supported the US Dollar. However, the US Senate rejected the stopgap funding bill for the 11th time on Monday, failing to reopen the government.