25/04/2025
Written by: Ian Morley
GBPEUR
Summary:
The Pound held its ground against the Euro, with GBP supported by hopes of a cautious approach from the Bank of England towards monetary easing. Meanwhile, the Euro saw a slight boost after France and the UK proposed a one-month ceasefire in Ukraine, giving some support to market sentiment. GBPEUR hovered over 1.21 as the Euro also found mild support from stronger-than-expected German inflation data last week.
Outlook:
The focus today will be on Eurozone inflation data, which could drive further volatility in the Euro. If inflation comes in softer than expected, it could reinforce expectations of further rate cuts by the ECB, weakening the Euro. For the Pound, attention remains on BoE expectations and how the UK economy responds to geopolitical tensions and global trade disruptions.
GBPUSD
Summary:
The Pound rebounded slightly against the US Dollar on Monday, trading near 1.2610 after two days of losses. Hopes for progress towards a Russia-Ukraine truce reduced demand for the safe-haven Dollar, allowing Sterling to regain some ground. However, concerns around Donald Trump’s tariff threats on Canada, Mexico, and China continue to underpin some USD strength.
Outlook:
Traders will be closely watching today’s US ISM Manufacturing PMI data and any further updates on US tariffs. The Pound’s resilience depends largely on ongoing geopolitical developments, while the BoE’s careful approach to monetary easing may offer a level of support. Broader risk sentiment and any tariff-related headlines will remain key drivers.
EURUSD
Summary:
EUR/USD saw a modest recovery on Monday, rising above 1.0400. Softer US PCE inflation data on Friday helped ease fears of an unexpected inflation spike in the US, weakening the Dollar slightly. Stronger-than-expected German inflation data provided some support to the Euro, although expectations for further ECB easing kept gains limited.
Outlook:
Today’s Eurozone HICP inflation data will be crucial for the Euro’s near-term direction. Softer inflation could further cement expectations of additional ECB rate cuts, weakening the Euro. On the US side, the ISM Manufacturing PMI will provide further guidance, with stronger data likely to reinforce support for the Dollar.
USDCAD
Summary:
USD/CAD softened slightly to around 1.4440 on Monday, after Canada’s Q4 GDP growth came in stronger than expected at 2.6%. The Loonie also found some support from rising oil prices. However, uncertainty surrounding the Trump administrations planned 25% tariffs on Canadian imports, set to take effect tomorrow, limited CAD gains.
Outlook:
Markets will closely watch developments surrounding Trump’s tariffs and any potential last-minute changes. Stronger Canadian growth data supports CAD, but if tariffs are confirmed, this could put fresh downward pressure on the Loonie. US ISM data could also impact the pair later today.
AUDUSD
Summary:
The Australian Dollar broke its six-day losing streak, trading slightly higher above 0.6200. This was partly supported by upbeat Chinese Caixin Manufacturing PMI data, which rose to 50.8, and weaker US Dollar sentiment following softer PCE data. However, AUD gains were limited by Trump’s ongoing threats to impose additional tariffs on Chinese imports.
Outlook:
The AUD remains vulnerable to any escalation in US-China trade tensions. Stronger US data today could also pressure the pair. However, continued improvement in Chinese economic data could offer some support in the near term. Australian Dollar sentiment will remain tied to both global risk appetite and RBA rate cut expectations.
USDCHF
Summary:
USD/CHF traded lower near 0.9020 on Monday, with the Swiss Franc benefitting from safe-haven demand amid ongoing geopolitical uncertainty, particularly around the Russia-Ukraine conflict. At the same time, the Dollar eased as traders priced in increased expectations for Fed rate cuts later this year.
Outlook:
If today’s US ISM data surprises to the upside, the Dollar could recover some ground. However, any worsening in global geopolitical tensions, especially in Eastern Europe, could continue to support the Swiss Franc. Safe-haven flows and central bank divergence will remain the key drivers for this pair.
Final Summary
The Pound started the week on a more positive note, supported by cautious BoE policy expectations and optimism around a possible Ukraine truce. The US Dollar, while still supported by trade tensions, softened slightly due to easing inflation fears. The Euro faces a crucial test with today’s inflation data, while the Canadian Dollar awaits further clarity on US tariffs. Geopolitical developments and central bank expectations remain the overarching drivers across all major pairs.