25/04/2025
Written by: Ian Morley
Daily Currency Update – 3rd April 2025
GBPEUR
Summary: The pound held steady against the euro as markets digested the latest UK services PMI data, which came in stronger than expected. Meanwhile, the euro faced continued pressure amid concerns over sluggish growth in the Eurozone and the European Central Bank’s cautious stance on monetary policy.
Outlook: The focus now turns to upcoming ECB minutes and any further signals on potential rate cuts. If UK data remains resilient, GBPEUR could see further gains, but broader market sentiment will continue to play a role.
EURUSD
Summary: The euro strengthened against the dollar, gaining 1.5% following Trump’s tariff announcement. Investors reacted positively to signs that European economies may be less impacted than initially feared, while US dollar weakness persisted due to heightened trade war concerns.
Outlook: The next major mover for this pair will be US jobless claims data and any new developments regarding trade policy. If the US economy continues to show resilience, the dollar could attempt to recover some ground, but the euro’s momentum may persist in the short term.
GBPUSD
Summary: The pound made strong gains against the dollar, rising over 1% following Trump’s trade tariff announcement. The initial dollar strength faded as markets reassessed the potential economic fallout, while the pound was further supported by stronger-than-expected UK services data.
Outlook: GBPUSD may remain volatile as markets react to further trade policy developments and upcoming US economic data. Any hawkish signals from the Federal Reserve could push the pair lower, while continued uncertainty around tariffs could create additional swings.
USDAUD
Summary: The US dollar fell against the Australian dollar following Trump’s tariff announcement. The Australian dollar benefitted from a shift in market positioning and a rebound in commodity prices.
Outlook: If trade tensions do not escalate further, USDAUD could see further downside. Market participants will be watching Australian trade data for further direction.
USDCAD
Summary: The Canadian dollar strengthened against the US dollar as oil prices rebounded and markets digested the impact of Trump’s tariff policy. With no additional tariffs imposed on Canada, the Loonie saw renewed support.
Outlook: The pair’s movement will be influenced by upcoming Canadian employment data and US economic indicators. If oil prices continue to recover, CAD could gain further ground against the USD.
Final Summary: Trump’s announcement of new trade tariffs last night has caused notable shifts in currency markets, with the US dollar weakening against most major currencies. The pound benefitted from strong UK services data and made significant gains against the dollar. Looking ahead, market movements will be closely tied to further trade policy developments and key economic releases.