25/04/2025
Written by: Ian Morley
GBP/EUR
Summary
The Pound fell slightly against the Euro, pressured by weak UK economic data. The Euro showed little reaction to disappointing German Factory Orders and Retail Sales, which both contracted more than expected. GBP/EUR remains near the 1.2055 level, with traders watching Eurozone business sentiment and Producer Price Index (PPI) figures for further direction.
Outlook
Market participants will monitor upcoming Eurozone data for potential shifts in sentiment. Weak PPI figures could pressure the Euro, while any positive surprises in UK economic releases might lend support to the Pound. However, broader concerns about economic stability in both regions may keep the pair range bound.
GBP/USD
Summary
GBP/USD retreated after a two-day rally, consolidating below the 1.2500 mark. Strong US ISM Services PMI data and increased US job openings lifted the Dollar, reinforcing expectations of a prolonged hawkish Federal Reserve stance. Meanwhile, the UK’s mixed economic data continues to weigh on the Pound.
Outlook
With the Federal Open Market Committee (FOMC) minutes and US labour market data due later this week, the Dollar’s performance will likely dominate this pair’s movements. Should the Fed signal continued caution on rate cuts, the Greenback could strengthen further. Meanwhile, UK data will need to show resilience to counteract current bearish pressures on the Pound.
EUR/USD
Summary
The Euro edged higher to 1.0350 against the Dollar but remains under pressure. Weak German economic data limited gains, while robust US data supported the Greenback. Market focus is now on the Federal Reserve’s December meeting minutes for clues about future rate decisions.
Outlook
The Euro remains vulnerable to downside risks as markets expect the ECB to proceed with aggressive rate cuts in 2025. Investors will closely follow the German Retail Sales and Eurozone PPI data for signs of economic recovery. On the US side, strong jobs data could reinforce the Dollar’s recent gains.
AUD/USD
Summary
The Australian Dollar held steady above 0.6200 despite strong consumer inflation figures. The trimmed mean inflation fell closer to the Reserve Bank of Australia’s target range, raising speculation of an upcoming rate cut. In contrast, the US Dollar remained firm, supported by rising Treasury yields.
Outlook
The Australian Dollar faces bearish pressure as traders speculate on potential RBA rate cuts. Further declines in trimmed mean inflation could solidify these expectations. The US Dollar is likely to retain its strength ahead of key data releases, keeping the AUD/USD pair subdued.
EUR/CHF
Summary
The Euro gained against the Swiss Franc as the Swiss National Bank’s dovish stance weighed on the Franc. Persistent eurozone inflation has prompted cautious rate-cut expectations from the European Central Bank, further supporting the Euro.
Outlook
Monetary policy divergence between the ECB and SNB will continue to drive the EUR/CHF pair. If the SNB signals additional rate cuts, the Euro may see further gains. However, persistent geopolitical uncertainties in the eurozone could temper investor optimism.
Final Summary
The US Dollar remains supported by strong economic data and hawkish Fed expectations, weighing on most major currencies. The Euro and Pound are under pressure due to weak regional data, while the Australian Dollar struggles amid rate-cut speculation. Markets will focus on upcoming US employment data and FOMC minutes, which could set the tone for the remainder of the week.