01/10/2025
Written by: Ian Morley
Daily Currency Market Update – 9th July 2025
GBP/EUR
Summary: GBP/EUR slipped as investors favoured the Euro amid renewed trade war fears. US President Trump proposed a 10% EU-wide tariff, excluding aircraft and spirits, while German trade data surprised to the upside with an €18.4 billion surplus. The Pound remains under pressure from UK fiscal concerns, with Chancellor Reeves facing scrutiny over welfare spending reforms.
Outlook: Eurozone PPI and ECB commentary will be key. If UK fiscal credibility continues to erode, GBP/EUR may remain on the defensive.
GBP/USD
Summary: GBP/USD steadied around 1.3600 after touching a two-week low below 1.3530. Sterling regained composure as Prime Minister Starmer confirmed Reeves will remain Chancellor, easing political uncertainty. However, Trump’s threats of 50% tariffs on copper and 200% on pharmaceuticals, alongside rising UK gilt yields, continue to weigh on sentiment.
Outlook: The FOMC Minutes and further tariff announcements will guide direction. If US inflation fears intensify, GBP/USD could face renewed pressure.
EUR/USD
Summary: EUR/USD softened to near 1.1700 as the Dollar held firm ahead of the FOMC Minutes. Trump’s tariff threats unsettled markets, with levies on BRICS nations and key sectors like semiconductors and pharmaceuticals looming. Despite this, the Euro remains supported by ECB policy stability and upbeat German industrial production.
Outlook: Eurozone unemployment and ECB speeches will be in focus. If US data surprises to the upside, EUR/USD may face additional headwinds.
USD/AUD
Summary: AUD/USD trades near 0.6550, recovering from earlier losses. The Aussie was supported by RBA Governor Bullock’s warning that inflation risks persist, despite the central bank holding rates at 3.85%. China’s CPI rose 0.1% YoY, while PPI fell 3.6%, adding mixed signals for the region.
Outlook: The FOMC Minutes and global tariff developments will be key. If risk sentiment improves, AUD/USD could extend gains.
USD/CAD
Summary: USD/CAD holds below 1.3700, supported by safe-haven flows and subdued oil prices. Trump’s copper tariff threat poses risks for Canada, a major exporter to the US. Meanwhile, the Loonie remains resilient ahead of Canadian employment data and trade negotiations.
Outlook: If US inflation concerns persist and Canadian data disappoints, USD/CAD may drift higher.
USD/CHF
Summary: USD/CHF strengthens above 0.7950 as the Dollar attracts buyers ahead of the FOMC Minutes. Confusion over Trump’s tariff policies and ongoing conflict in Gaza continue to support safe-haven demand for the Swiss Franc.
Outlook: Swiss CPI and US policy signals will guide movement. If geopolitical tensions escalate, USD/CHF could remain range-bound with a downside bias.
Final Summary
Currency markets remain cautious as investors brace for the FOMC Minutes and further tariff announcements from the US. Sterling stabilised on political reassurance but remains vulnerable to fiscal risks. The Euro is supported by policy stability and strong German data, while the Dollar holds firm amid inflation concerns. Commodity-linked currencies like the Aussie and Loonie are mixed on trade and data releases, and the Swiss Franc continues to benefit from safe-haven flows.