25/04/2025
Written by: Ian Morley
GBPEUR
Summary:
The Pound slipped against the Euro yesterday, falling from 1.21 to 1.20. This decline came as markets continued to price in rate cuts from the Bank of England later this year, with growing concern over the UK’s weakening economic data. Meanwhile, the Euro found modest support ahead of Thursday’s European Central Bank (ECB) meeting, with inflation readings from the Eurozone proving slightly stronger than expected.
Outlook:
Today, attention will turn to BoE Governor Andrew Bailey’s testimony before the Treasury Select Committee. Any signs that the BoE may be more dovish than previously thought could add further pressure to Sterling. Meanwhile, traders will look to Thursday’s ECB decision and Christine Lagarde’s comments for guidance on future policy moves. With the ECB expected to cut rates again, the scope for further significant Euro strength may be limited in the short term.
GBPUSD
Summary:
Sterling continued its upward trajectory, rising more than 0.7% against the US Dollar yesterday. The Greenback remained under pressure following mounting concerns over slowing US economic growth, coupled with uncertainty around President Trump’s recently imposed tariffs on Canada, Mexico, and China.
Outlook:
GBP/USD is likely to take direction from today’s US ISM Services PMI and ADP Employment data, both of which could influence expectations around future Federal Reserve policy. BoE Governor Bailey’s testimony could also impact sentiment towards Sterling, particularly if there are any hawkish surprises.
EURUSD
Summary:
The Euro climbed to fresh year-to-date highs near 1.0670, driven by continued Dollar weakness and optimism around Germany’s proposed debt reforms to boost infrastructure spending. Markets also digested softer US economic data, which reinforced expectations that the Federal Reserve may need to ease policy sooner than previously thought.
Outlook:
The focus now shifts to Thursday’s ECB meeting, where another rate cut is expected. President Lagarde’s comments on inflation, growth, and the impact of Trump’s tariffs will be closely scrutinised. In the meantime, today’s US ISM Services PMI and ADP Employment Change will guide near-term sentiment on the pair.
USDCAD
Summary:
The Canadian Dollar strengthened against the US Dollar, with USD/CAD retreating to near 1.4400. US economic growth concerns and speculation that Trump may reconsider some of his recently imposed tariffs weighed on the Greenback. However, the Canadian Dollar’s upside was capped by expectations of further Bank of Canada (BoC) rate cuts.
Outlook:
US data releases today will set the tone for USD/CAD, particularly if weaker data reinforces recession fears in the US. Markets are also looking ahead to next week’s BoC meeting, where another rate cut is expected. Any fresh commentary around trade relations with the US could also influence the pair.
AUDUSD
Summary:
The Australian Dollar held its ground, supported by better-than-expected Q4 GDP data, which showed the economy grew by 0.6% quarter-on-quarter. The AUD also found some relief from reports that Trump might ease back on his initial tariff stance, reducing some risk-off sentiment.
Outlook:
AUD/USD will likely remain sensitive to broader risk sentiment and US data today. Stronger US data could revive the Dollar’s strength, while weaker outcomes could boost the AUD further. Comments from Reserve Bank of Australia officials and evolving US-China trade tensions will also be in focus.
USDCHF
Summary:
The US Dollar continued to slide against the Swiss Franc, with USD/CHF falling below 0.8900. Swiss inflation data surprised to the upside, with monthly CPI rising 0.6% in February – the fastest pace since February 2021 – adding support to the Franc. Meanwhile, persistent US growth concerns and speculation around Trump’s tariffs continued to weigh on the Greenback.
Outlook:
Near-term focus will be on today’s US data, including the ISM Services PMI and ADP Employment report, both of which could influence USD sentiment. Should US data disappoint, further downside pressure could emerge for USD/CHF, with the Franc continuing to benefit from safe-haven demand.
Final Summary:
The US Dollar remains under sustained pressure as growth concerns, geopolitical uncertainty, and shifting expectations around Trump’s tariff strategy weigh on the currency. Sterling is holding firm ahead of BoE Governor Bailey’s testimony, while the Euro finds short-term support ahead of Thursday’s ECB meeting. The Canadian Dollar remains supported but could face headwinds if further BoC easing is signalled next week. Meanwhile, the Australian Dollar benefits from stronger economic data, and the Swiss Franc retains a safe-haven bid. All eyes now turn to key US data and central bank commentary to shape the next leg of movement across the major pairs.