25/04/2025
Written by: Ian Morley
Daily Currency Update – 8th April 2025
GBPEUR
Summary: The pound has struggled against the euro following renewed concerns over the economic impact of Trump’s tariffs. The euro remains firm as fears grow that the US could enter a recession, boosting demand for the single currency.
Outlook: The focus will be on economic data from the UK and Eurozone. Any signs of economic slowdown in the UK could see further pressure on GBPEUR, while expectations of ECB policy responses may influence movement.
EURUSD
Summary: The euro continues to benefit from concerns over the US economy, with traders increasingly positioning for a weaker dollar. The pair remains elevated following its recent surge, driven by safe-haven flows into the euro.
Outlook: If trade tensions persist and recession fears intensify, the euro could extend gains. However, any hawkish commentary from the Federal Reserve may act as a cap on further upside.
GBPUSD
Summary: The pound initially climbed against the US dollar but has since struggled to hold its gains as the dollar found support. Uncertainty surrounding the US economic outlook and the Fed’s potential response to tariffs have led to choppy trading.
Outlook: The direction of GBPUSD will depend on upcoming US economic data and any further developments regarding trade policy. A shift in risk sentiment could influence the pair in either direction.
USDAUD
Summary: The Australian dollar has come under pressure, reversing earlier gains against the US dollar. The risk-off sentiment has led to renewed demand for the greenback, while commodity price weakness has also weighed on the AUD.
Outlook: If global risk appetite remains subdued, the US dollar could see further strength against the Aussie. Key Chinese economic data may also impact the pair’s movement.
USDCAD
Summary: The Canadian dollar has weakened further against the US dollar, tracking declines in oil prices. The greenback has found some stability as markets reassess potential Fed policy moves.
Outlook: If oil prices continue to slide and risk aversion persists, USDCAD could push higher. Traders will be watching Canadian employment data for signs of economic resilience.
USDCHF
Summary: The Swiss franc remains strong as safe-haven demand persists. However, the US dollar has found some support, leading to relatively range-bound trading.
Outlook: If market uncertainty escalates, CHF could continue to attract buyers. However, any hawkish surprises from the Fed may shift sentiment in favour of the dollar.
Final Summary: Currency markets remain volatile in the wake of Trump’s tariffs, with the euro continuing to strengthen on US recession fears. The pound has struggled against both the euro and the dollar, while commodity-linked currencies like the AUD and CAD have weakened amid risk-off sentiment. The US dollar has stabilised after initial losses, but uncertainty remains high. Looking ahead, trade policy developments and economic data will be key drivers of further movement.