01/10/2025
Written by: Ian Morley
Daily Currency Market Update – 2nd July 2025
GBP/EUR
Summary: GBP/EUR slipped to 1.1630 in early trading as the Euro gained modest support from a slight uptick in Eurozone inflation, which returned to the ECB’s 2% target. However, the single currency struggled to hold gains amid a broader risk-on mood and dovish ECB commentary. The Pound was weighed down by investor caution ahead of BoE Governor Bailey’s speech, despite a modest lift from the UK’s finalised manufacturing PMI.
Outlook: Eurozone unemployment data and Bailey’s remarks at the ECB Forum will be key. If the labour market remains resilient and Bailey signals dovish intent, GBP/EUR could remain under pressure.
GBP/USD
Summary: GBP/USD eased to around 1.3735 after hitting a three-and-a-half-year high near 1.3800. The Pound lost momentum as the US Dollar rebounded on stronger-than-expected JOLTS Job Openings data and cautious remarks from Fed Chair Powell, who reiterated a “wait and see” approach.
Outlook: The ADP Employment Change report and Powell’s continued testimony will guide direction. If US jobs data remains firm, GBP/USD may face further consolidation.
EUR/USD
Summary: EUR/USD pulled back to 1.1780 after briefly topping 1.1830. The Euro’s rally paused as the Dollar found support from upbeat US labour and manufacturing data. While the broader trend remains bullish, overbought technical conditions and cautious ECB commentary may limit further upside.
Outlook: Eurozone unemployment and Lagarde’s speech will be in focus. If US data continues to surprise to the upside, EUR/USD could face additional headwinds.
USD/AUD
Summary: AUD/USD dipped below 0.6600 after Australian Retail Sales rose just 0.2% in May, missing expectations. The Aussie was also pressured by weaker building approvals and a softer domestic PMI, though improved Chinese data and risk sentiment offered some support.
Outlook: The pair may remain range-bound ahead of the US ADP report. A dovish Fed tone and stable risk appetite could help AUD/USD recover.
USD/CAD
Summary: USD/CAD edged higher to 1.3645 as the Dollar rebounded on strong US data. The Loonie was capped by weaker oil prices and lingering uncertainty around OPEC+ output plans, despite optimism over renewed US–Canada trade talks.
Outlook: US jobs data and oil price trends will be key. If crude stabilises and US data remains firm, USD/CAD may hold near current levels.
USD/CHF
Summary: USD/CHF bounced modestly to 0.7930 after hitting multi-year lows at 0.7875. The Dollar found support from upbeat US data, while the Franc remained firm on safe-haven demand and concerns over US fiscal health.
Outlook: The ADP report and Powell’s tone will shape near-term movement. If risk appetite improves and US data stays strong, USD/CHF may attempt a short-term recovery.
Final Summary
The US Dollar staged a modest rebound after upbeat labour and manufacturing data, while Fed Chair Powell maintained a cautious stance. Sterling eased from recent highs as investors awaited BoE commentary, and the Euro paused after hitting multi-year peaks. The Aussie and Loonie were mixed on soft domestic data and shifting risk sentiment, while the Swiss Franc remained firm amid ongoing fiscal concerns. Attention now turns to the ADP Employment Change and ECB Forum speeches for the next directional cues.