25/04/2025
Written by: Ian Morley
Daily Currency Update – 2nd April 2025
GBPEUR
Summary: The pound remained stable against the euro today, with UK economic data providing little direction. Market participants are watching how the Bank of England will respond to persistent inflationary pressures, while the euro continues to struggle amid sluggish growth in the Eurozone.
Outlook: The focus remains on upcoming UK services data and ECB commentary. If inflation concerns persist in the UK, the pound could see further support, while the euro remains sensitive to economic sentiment across the bloc.
EURUSD
Summary: The euro remained under pressure against the dollar ahead of the anticipated announcement of new US tariffs by the Trump administration. Markets are on edge as speculation grows over which sectors may be affected, leading to risk aversion and a stronger dollar.
Outlook: The euro may remain under pressure if the US pushes forward with protectionist measures. Market attention will now turn to Eurozone inflation data and any potential retaliatory measures from the EU.
GBPUSD
Summary: The pound slipped against the dollar as markets positioned themselves cautiously ahead of Trump’s expected tariff announcement. The greenback benefitted from its safe-haven appeal as investors assessed the potential economic impact of escalating trade tensions.
Outlook: With US trade policy back in the spotlight, GBPUSD could face volatility. UK services data and further trade-related developments will be key in determining the next moves for this pair.
USDAUD
Summary: The US dollar strengthened against the Australian dollar as risk sentiment took a hit ahead of the expected US tariff announcement. The Australian dollar, being a trade-sensitive currency, reacted negatively to fears of reduced global demand.
Outlook: The trajectory of USDAUD will depend on how markets digest further trade developments. If risk aversion continues, the USD may retain its strength.
USDCAD
Summary: The Canadian dollar weakened as oil prices dipped and concerns over US trade policy weighed on market sentiment. Investors remain cautious as they await confirmation of the details of Trump’s tariffs and any impact on Canada.
Outlook: We will closely watch Canadian trade data and US economic releases. If US protectionist policies escalate further, USDCAD could move higher.
USDCHF
Summary: The Swiss franc saw mixed performance against the dollar as safe-haven flows increased. While the USD benefitted from trade-related concerns, the CHF found some support as investors sought safety.
Outlook: The ongoing trade dispute and geopolitical risks will drive movements in this pair. Any further protectionist rhetoric from the US could bolster safe-haven demand for both the CHF and USD.
Final Summary: Markets are bracing for the Trump administration’s anticipated tariff announcement, which is set to be a key driver of sentiment. The pound and euro remain vulnerable, while trade-sensitive currencies like the AUD and CAD have felt the pressure. Looking ahead, further trade developments and economic data releases will be key in determining the next moves across the currency markets.