01/10/2025
Written by: Ian Morley
Daily Currency Market Update – 6th June 2025
GBP/EUR
Summary: GBP/EUR slipped to 1.1840 following the European Central Bank’s (ECB) widely expected 25 basis point rate cut on Thursday. The Euro found support as ECB President Christine Lagarde reiterated that inflation was stabilising and signalled that the easing cycle may be nearing an end. Meanwhile, the Pound remains steady, benefiting from the UK’s exemption from steep 50% US tariffs on steel and aluminium, although UK exporters still face a 25% tariff.
Outlook: The market will watch ECB commentary for further policy signals. If officials confirm a pause in rate cuts, the Euro could gain traction, limiting GBP/EUR upside.
GBP/USD
Summary: GBP/USD hovers around 1.3550 after reaching its highest level since February 2022 on Thursday. Sterling remains supported by increased risk sentiment following the tariff exemption granted by US President Trump. Meanwhile, the US Dollar struggles amid disappointing US Jobless Claims figures, which rose to 247,000 from 239,000, and escalating political tensions between Trump and Elon Musk.
Outlook: The upcoming US Nonfarm Payrolls report will be key for GBP/USD direction. If the labour market shows signs of slowing, the Dollar may weaken further, supporting Sterling.
EUR/USD
Summary: EUR/USD trades below 1.1450 after reaching a nearly two-month high of 1.1495 on Thursday. The Euro surged following Lagarde’s hawkish comments, which suggested the ECB may be approaching the end of its easing cycle. However, investors are cautious ahead of the US employment report, which could impact sentiment.
Outlook: The US Nonfarm Payrolls release will be the primary focus for EUR/USD. If job growth disappoints, the Dollar may struggle, allowing the Euro to reclaim higher levels.
USD/AUD
Summary: AUD/USD remains weaker near 0.6400 as the US Dollar regains modest strength. Market sentiment improved following Trump’s phone call with Chinese President Xi Jinping, which was described as productive, easing concerns over US-China trade tensions. However, uncertainty remains as Reserve Bank of Australia policymakers signal caution on rate cuts.
Outlook: US labour market data and global trade negotiations will be critical for AUD/USD direction. Any further signs of policy uncertainty could pressure the Aussie.
USD/CAD
Summary: USD/CAD holds above 1.3650 ahead of key employment data from both the US and Canada. The pair hit a fresh 2025 low below 1.3650 on Thursday before recovering. Markets expect Canada’s labour market to show a reduction of 15,000 jobs in May, while US Nonfarm Payrolls are forecast to add 130,000 new jobs.
Outlook: If Canada’s employment figures disappoint, the Loonie may struggle, supporting USD/CAD. Meanwhile, US data will be closely monitored for any signs of economic slowdown.
USD/CHF
Summary: USD/CHF remains near 0.8200 as safe-haven flows into the Swiss Franc persist. The Dollar’s struggles continue as disappointing US economic data and uncertainty around fiscal policy weigh on sentiment. Investors remain cautious ahead of the latest labour market figures.
Outlook: If US job growth misses expectations, safe-haven demand could keep CHF supported. However, any signs of economic resilience may stabilise USD/CHF.
Final Summary
Currency markets are reacting to the ECB’s rate cut and evolving US political and economic developments. Sterling remains steady following its tariff exemption, while the Euro holds gains on hawkish ECB signals. The US Dollar struggles amid weak labour data and political tensions, while commodity-linked currencies like the Australian and Canadian Dollars respond to trade and employment concerns. Focus is now on the upcoming Nonfarm Payrolls report for fresh market direction.