25/04/2025
Written by: Ian Morley
Daily Currency Update – 10th April 2025
GBPEUR
Summary: The pound has continued its fall against the Euro, marking a fifth consecutive session of losses as it trades near 1.1664. Market sentiment has been shaped by ongoing developments surrounding US trade policy, with President Trump signalling a willingness to negotiate with international partners, which initially helped stabilise risk appetite. However, the European Commission has responded by preparing retaliatory tariffs of up to 25% on US exports, adding fresh volatility to the markets.
At the same time, expectations for further monetary easing from the European Central Bank (ECB) remain a key factor. Several policymakers, including representatives from Italy, France, and Greece, have expressed support for interest rate cuts, citing the potential economic drag from trade uncertainty. Meanwhile, the pound has faced pressure despite relatively limited UK exposure to tariffs, with rising UK gilt yields offering some stability.
Outlook: The euro’s momentum against the pound may persist in the short term, particularly if markets continue to favour the euro as a hedge against US economic weakness. However, dovish expectations surrounding the ECB could temper further gains, especially if traders begin to shift focus toward the Bank of England’s upcoming policy decisions. If UK data surprises positively, sterling could find some footing, but the broader trade environment remains the key driver for now.
EURUSD
Summary: The euro continues to strengthen against the US dollar, benefitting from growing concerns about the US economic outlook and uncertainty over Federal Reserve policy direction.
Outlook: If risk sentiment remains cautious and US inflation data disappoints, the euro could maintain its recent gains. However, any shift in Fed rhetoric could provide some support to the dollar.
GBPUSD
Summary: The pound has struggled against the US dollar, weighed down by weaker-than-expected UK economic data and a cautious market mood.
Outlook: GBPUSD may remain under pressure if UK economic concerns persist. A stronger-than-expected US jobs report or inflation data could add further weight to the pound.
USDAUD
Summary: The Australian dollar has softened against the US dollar as global risk sentiment weakens. Softer commodity prices have also contributed to AUD’s recent pullback.
Outlook: If risk aversion continues and US economic data remains stable, further downside could be in store for AUDUSD. However, any improvement in risk appetite may provide a relief rally.
USDCAD
Summary: The Canadian dollar remains on the back foot as lower oil prices weigh on the currency, while the US dollar finds modest support.
Outlook: The direction of USDCAD will depend on oil price movements and upcoming Canadian economic data. If crude oil remains under pressure, CAD could see further losses.
USDCHF
Summary: The Swiss franc remains resilient against the US dollar, with investors continuing to seek safe-haven assets amid global uncertainty.
Outlook: If risk-off sentiment persists, the franc could strengthen further. However, any hawkish Fed signals may limit USDCHF downside.
Final Summary: The pound has continued its decline against the euro, while the euro maintains its strength against the dollar. The US dollar remains under pressure amid economic uncertainty, while risk-sensitive currencies like AUD and CAD are struggling. Market sentiment remains cautious, with traders watching economic data and central bank policy signals for further direction.