30/09/2025
Written by: Ian Morley
Daily Currency Market Update – 5th September 2025
GBP/EUR
Summary: GBP/EUR remains rangebound at 1.1530 following mixed UK Retail Sales data. Monthly sales rose 0.6% in July, beating expectations, while annual growth missed forecasts at 1.1%. The Euro holds firm ahead of Q2 Eurozone GDP, with ECB officials maintaining a cautious tone.
Outlook: Eurozone GDP and ECB commentary will guide direction. Sterling may face headwinds if BoE messaging remains mixed and fiscal concerns persist.
GBP/USD
Summary: GBP/USD trades near 1.3470, supported by upbeat UK Retail Sales and softer US Dollar sentiment ahead of Nonfarm Payrolls. BoE officials delivered mixed signals, with Governor Bailey expressing uncertainty over the pace of future rate cuts.
Outlook: US NFP and wage data will be pivotal. Sterling may extend gains if US labour data disappoints and BoE maintains a restrictive stance.
EUR/USD
Summary: EUR/USD holds above 1.1650, buoyed by a mild risk-on tone and softer US employment data. Fed speakers leaned dovish, with markets pricing a 99.4% chance of a September rate cut.
Outlook: Eurozone GDP and US NFP will shape near-term momentum. A soft US print could lift EUR/USD, though upside may be capped by lingering Eurozone fiscal concerns.
AUD/USD
Summary: AUD/USD advances as the US Dollar softens ahead of key labour data. The Aussie is supported by strong July Trade Surplus and Q2 GDP figures, which have eased expectations of further RBA rate cuts.
Outlook: AUD may remain firm if US data reinforces Fed dovishness. Domestic resilience and Chinese PMI strength continue to underpin sentiment.
USD/CAD
Summary: USD/CAD dips to near 1.3800, pressured by rising Fed rate cut expectations and cautious sentiment ahead of Canadian jobs data. Canada plans financial support for sectors hit by US tariffs, with trade negotiations ongoing.
Outlook: Canadian employment and US NFP will be key. CAD may gain if domestic data surprises positively and oil prices remain stable.
USD/CHF
Summary: USD/CHF retreats below 0.8040 as Fed rate cut bets intensify. The pair remains under pressure following weak US employment data and ahead of the NFP release. Swiss CPI showed flat monthly growth and steady annual inflation at 0.2%.
Outlook: USD/CHF may drift lower if US labour data confirms dovish Fed outlook. Swiss inflation and SNB policy expectations will also influence direction.
Final Summary
Sterling finds support from strong UK Retail Sales but faces mixed BoE signals. The Euro holds firm ahead of GDP data, while the US Dollar trades cautiously as markets await NFP. Commodity currencies like AUD and CAD are supported by domestic resilience and easing central bank expectations. The Swiss Franc gains modestly on safe-haven flows and subdued inflation. Today’s employment data will be pivotal for shaping near-term FX direction.