25/04/2025
Written by: Ian Morley
Daily Currency Update – 9th April 2025
GBPEUR
Summary: The pound found support from its August 2024 lows, trading in a relatively tight range against the euro. While broader risk sentiment was cautious, GBPEUR remained resilient, with little movement despite ongoing trade war concerns.
Outlook: The pair’s direction will be guided by upcoming UK economic data and any signals from the ECB. If the euro continues to strengthen due to fears of a US-led recession, GBPEUR could see further downside.
EURUSD
Summary: The euro gained against the dollar, pushing towards 1.1050 as USD weakness persisted. The latest round of US tariffs has increased fears of a global recession, prompting investors to move away from the greenback.
Outlook: The market focus remains on upcoming inflation data and potential ECB rate cuts. While the euro has strengthened, any indication of a more aggressive ECB policy could limit gains.
GBPUSD
Summary: The pound rebounded against the US dollar, climbing towards 1.2850. USD weakness was the dominant driver, as markets reassessed the impact of tariffs and the likelihood of a US recession.
Outlook: Further gains could be dependent on market sentiment and Fed policy signals. If risk appetite weakens further, the dollar could stabilise, capping GBPUSD gains.
USDAUD
Summary: The Australian dollar experienced volatility, initially strengthening on USD weakness before facing headwinds from concerns over China’s economy and trade war developments.
Outlook: With China holding high-level meetings to address economic risks, AUD traders will watch closely for policy responses. A further escalation in trade tensions could weigh on AUD.
USDCAD
Summary: USDCAD remained under pressure as the Canadian dollar found support near 1.4200. The fall in oil prices limited CAD gains, while USD weakness kept the pair from rising significantly.
Outlook: Further direction will come from oil price movements and Canadian economic data. If trade tensions worsen, the Loonie could see additional downside.
USDCHF
Summary: The Swiss franc extended gains against the US dollar, trading near 0.8435. With rising fears of a US-led recession, safe-haven demand pushed CHF higher.
Outlook: The Swiss National Bank may be forced to respond if CHF continues to strengthen. However, with global uncertainty persisting, the franc is likely to remain in demand.
Final Summary:
Markets remain focused on the fallout from Trump’s tariffs, with growing concerns over a US recession. The dollar remains under pressure, with the euro and pound benefitting. Safe-haven flows continue to favour the Swiss franc, while commodity currencies face headwinds. The next key event will be the release of the FOMC minutes, which could provide further insight into Fed policy expectations.