28/10/2025
Written by: Ian Morley
Daily Currency Market Update – 8th September 2025
GBP/EUR
Summary: GBP/EUR steadies near 1.1515 as traders await the outcome of French Prime Minister Bayrou’s confidence vote. Political instability in France threatens to destabilise the Eurozone’s second-largest economy, while the Euro finds support ahead of Thursday’s ECB meeting. UK Retail Sales rose 0.6% m/m in July, reinforcing the BoE’s restrictive stance.
Outlook: Eurozone political risk may cap EUR upside. GBP could gain if BoE rhetoric remains firm and inflation pressures persist.
GBP/USD
Summary: GBP/USD holds firm near 1.3500, supported by rising Fed rate cut expectations. US NFP data showed just 22K jobs added in August, the weakest since January 2021, with unemployment rising to 4.3%. Traders now price a 10% chance of a 50bps Fed cut next week.
Outlook: GBP/USD may remain supported if Fed dovish bets intensify. BoE Deputy Governor Breeden’s speech on Tuesday will be closely watched.
EUR/USD
Summary: EUR/USD trades around 1.1715, buoyed by soft US labour data and rising Fed cut expectations. However, political uncertainty in France limits Euro upside. German Industrial Production rose 1.3% m/m in July, while trade surplus narrowed to €14.7bn.
Outlook: Euro may remain rangebound ahead of Thursday’s ECB decision. Sentix Investor Confidence and French political developments will guide sentiment.
AUD/USD
Summary: AUD/USD climbs toward 0.6600, extending Friday’s gains. The Aussie is supported by China’s trade surplus widening to $102.33bn and strong domestic data. July Trade Surplus hit A$7.3bn, while Q2 GDP rose 0.6% q/q and 1.8% y/y.
Outlook: AUD may remain firm if Fed rate cut bets persist. RBA easing expectations have eased, with swaps pricing a 90% chance of no change in September.
USD/CAD
Summary: USD/CAD rises to 1.3830, supported by weak Canadian jobs data. Canada lost 65.5K jobs in August, pushing unemployment to 7.1%. Political uncertainty in France and Japan adds safe-haven support to the USD.
Outlook: CAD may remain pressured if BoC rate cut expectations build. US PPI on Wednesday will be key for USD direction.
USD/CHF
Summary: USD/CHF trades near 0.7975, hovering around a one-month low. The pair remains vulnerable as Fed rate cut bets intensify and technical momentum favours downside. A positive risk tone weighs on CHF, but USD upside is capped.
Outlook: USD/CHF may drift lower unless US inflation data surprises. Traders await PPI and CPI later this week for fresh cues.
Final Summary
Sterling holds firm on strong UK data and fading BoE cut expectations, while the Euro is steady but constrained by French political risk. The US Dollar remains under pressure following weak NFP data and rising Fed cut bets. Commodity currencies like AUD and CAD diverge, with the Aussie supported by robust data and the Loonie weighed by soft employment figures. The Swiss Franc trades cautiously, with USD/CHF vulnerable to further downside ahead of key US inflation releases.