01/10/2025
Written by: Ian Morley
Daily Currency Market Update – 4th August 2025
GBP/EUR
Summary: GBP/EUR slipped to 1.1460, its lowest level in over a week, as Sterling weakened on soft UK Manufacturing PMI and rising expectations of a BoE rate cut this Thursday. Meanwhile, the Euro gained ground following stronger-than-expected core inflation and a rebound in investor sentiment, with Sentix Confidence improving to 8.0.
Outlook: If Eurozone inflation remains firm and UK data continues to disappoint, GBP/EUR may remain under pressure. BoE policy signals and Eurozone GDP figures will be key drivers.
GBP/USD
Summary: GBP/USD holds near 1.3300 after Friday’s rebound, supported by dovish Fed expectations following a dismal US Nonfarm Payrolls report. The US added just 73K jobs in July, with downward revisions totalling 258K for May and June. Sterling remains firm despite looming BoE easing, as traders reassess Fed rate cut probabilities.
Outlook: Revised UK PMI and US ISM Services data will guide direction. If Fed rhetoric softens and UK activity stabilises, GBP/USD may attempt further gains.
EUR/USD
Summary: EUR/USD trades above 1.1550, consolidating after Friday’s 1.5% rally. The Euro benefited from USD weakness and resilient inflation data, though gains are capped by cautious ECB commentary and trade deal fallout.
Outlook: Eurozone GDP and US factory orders will be pivotal. If US data underwhelms and Eurozone growth holds up, EUR/USD may extend its recovery.
USD/AUD
Summary: AUD/USD steadies near 0.6600, supported by Australia’s sharp rise in monthly inflation and confirmation that tariffs on Australian goods remain unchanged. However, weak Chinese PMI and lingering RBA easing expectations continue to weigh.
Outlook: If US–China trade talks stall and Chinese growth falters, AUD/USD may soften. RBA commentary and US data will also influence direction.
USD/CAD
Summary: USD/CAD trades near 1.3780, pressured by weaker US jobs data and falling crude prices. The Loonie remains vulnerable as OPEC+ plans to boost output, while Canadian fundamentals remain mixed ahead of GDP data.
Outlook: If US data disappoints and oil prices remain soft, USD/CAD may drift lower. Canadian GDP and Fed commentary will be key.
USD/CHF
Summary: USD/CHF dips to 0.8045, down nearly 1% from Friday’s highs, as safe-haven demand for the Swiss Franc intensifies. The US Dollar weakened sharply on poor NFP data and rising Fed rate cut expectations, while Switzerland braces for a 39% US tariff on key exports.
Outlook: If geopolitical tensions escalate and Fed signals dovish intent, USD/CHF may test support near 0.8000. Swiss diplomatic efforts and US data will shape direction.
Final Summary
Sterling remains under pressure against the Euro but holds firm versus the Dollar, as BoE and Fed policy expectations diverge. The Euro gains on resilient inflation and improved sentiment, while the US Dollar struggles to recover from Friday’s NFP shock. Commodity-linked currencies like the Aussie and Loonie are mixed on inflation and trade signals, and the Swiss Franc strengthens amid tariff concerns and safe-haven flows. Focus now turns to PMI revisions, factory orders, and central bank commentary for fresh momentum.