29/10/2025
Written by: Ian Morley
Daily Currency Market Update – 29th October 2025
GBP/EUR
Summary: GBP/EUR slumped to 1.1350 as traders positioned ahead of Thursday’s ECB decision. The Euro gained modestly despite weaker German consumer confidence, supported by expectations that the ECB will hold rates steady for a third consecutive meeting. Meanwhile, Sterling remains under pressure following a slowdown in UK shop price inflation, with BRC data showing a drop to 1.0% y/y in October from 1.4%.
Outlook: GBP/EUR may remain soft if BoE easing expectations persist. ECB commentary and Eurozone inflation data will guide near-term direction.
GBP/USD
Summary: GBP/USD fell below 1.3250, its weakest level since early August, after losing nearly 0.5% on Tuesday. The Pound continues to face headwinds from rising BoE rate cut bets and fiscal uncertainty.
Outlook: GBP/USD may remain under pressure ahead of the Fed decision. Traders will watch for Powell’s tone and US-China trade developments.
EUR/USD
Summary: EUR/USD retreated to 1.1630 after a five-day rally, weighed by cautious positioning ahead of the Fed. The Euro was supported earlier by risk-on sentiment and fading ECB easing bets, but softer Spanish GDP and retail data added pressure.
Outlook: Euro may remain rangebound until the Fed and ECB decisions. Powell’s guidance and Lagarde’s press conference will be pivotal.
AUD/USD
Summary: AUD/USD rose above 0.6600, its highest in three weeks, after hotter-than-expected Q3 inflation data. CPI rose 3.2% y/y versus 3.0% expected, while Trimmed Mean CPI printed at 3.0% y/y. The AUD also gained on China’s goodwill soybean purchases and fading RBA rate cut expectations.
Outlook: AUD may remain supported if inflation momentum persists. RBA tone and China trade signals will shape direction.
USD/CAD
Summary: USD/CAD traded near 1.3940, extending losses ahead of policy decisions from the Fed and BoC. The US Dollar remains subdued on rate cut expectations, while the Loonie faces pressure from weaker oil prices and tariff tensions.
Outlook: CAD may stabilise if BoC signals an end to easing. Powell’s tone and oil trends will influence direction.
USD/CHF
Summary: USD/CHF edged up to 0.7940 as traders awaited the Fed’s rate decision. The Dollar gained modestly on short-covering, while the Franc held steady amid diminished SNB easing expectations.
Outlook: USD/CHF may remain rangebound unless Fed signals further cuts. Swiss ZEW data and trade sentiment will guide CHF direction.
Final Summary
Sterling weakened further on soft retail inflation and BoE rate cut expectations. The Euro trades cautiously ahead of the ECB decision, while the US Dollar stabilises as markets await Powell’s guidance. The Australian Dollar rallied on strong inflation data and trade optimism, while the Canadian Dollar remains pressured ahead of the BoC decision. The Swiss Franc holds firm as SNB easing bets fade.