05/11/2025
Written by: Ian Morley
Daily Currency Market Update – 5th November 2025
GBP/EUR
Summary: GBP/EUR slipped to 1.1347 as Sterling came under pressure following Chancellor Reeves’ pre-budget remarks. Her warning of a “challenging fiscal position” raised expectations of tax hikes and tighter spending controls, prompting a modest uptick in BoE rate cut bets. Meanwhile, the Euro found support from risk aversion and a lack of major data, holding firm against risk-sensitive peers.
Outlook: GBP/EUR may remain soft unless BoE signals policy resilience. French political risks and ECB commentary will guide Euro sentiment.
GBP/USD
Summary: GBP/USD traded near 1.3025 after touching a multi-month low of 1.3010 on Tuesday. Sterling remains pressured by fiscal concerns and pre-budget speculation, while traders await US ADP payrolls and ISM Services PMI for further Dollar direction.
Outlook: GBP/USD may struggle to recover unless BoE tone shifts. US data and Fed commentary will shape momentum.
EUR/USD
Summary: EUR/USD hovered near 1.1485, consolidating after a 0.3% decline on Tuesday. The pair remains vulnerable despite upbeat Eurozone services PMI readings, as risk aversion and Fed hawkishness underpin the Dollar.
Outlook: Euro may remain subdued unless US data disappoints. Eurozone PPI and ECB speeches will guide sentiment.
AUD/USD
Summary: AUD/USD edged higher after China announced tariff relief on US agricultural imports. The pair recovered from earlier losses, supported by improving trade sentiment and resilient domestic data. However, RBA’s cautious tone and rising bond yields continue to weigh.
Outlook: AUD may remain rangebound unless China’s outlook improves. RBA commentary and US-China trade developments will be pivotal.
USD/CAD
Summary: USD/CAD rose to 1.4110, marking a seven-month high as oil prices weakened and Fed rate cut expectations faded. Crude fell sharply on inventory data, while the US Dollar remained firm despite the prolonged government shutdown.
Outlook: CAD may stabilise if oil rebounds. BoC tone and US data will influence direction.
USD/CHF
Summary: USD/CHF eased to 0.8090 after reaching a three-month high of 0.8108. The pair softened as safe-haven demand lifted the Franc amid global risk-off sentiment, though Fed caution continues to support the Dollar.
Outlook: USD/CHF may consolidate unless SNB signals restraint. Risk sentiment and Fed commentary will shape CHF direction.
Final Summary
Sterling remains pressured by fiscal uncertainty and pre-budget speculation, while the Euro holds firm amid risk aversion. The US Dollar consolidates near recent highs ahead of key data, supported by cautious Fed tone. The Australian Dollar finds support from trade optimism, while the Canadian Dollar weakens on oil softness. The Swiss Franc steadies as safe-haven flows offset policy divergence.