01/10/2025
Written by: Ian Morley
Daily Currency Market Update – 10th July 2025
GBP/EUR
Summary: GBP/EUR remains range-bound near 1.1600 as traders await German inflation data and UK GDP figures due Friday. The Euro is supported by optimism around a potential US–EU tariff deal, with negotiators hopeful of securing exemptions to the proposed 10% baseline rate.
Outlook: If German inflation surprises to the upside and UK GDP disappoints, GBP/EUR could drift lower. ECB commentary and tariff developments will also be key drivers.
GBP/USD
Summary: GBP/USD trades near 1.3600 as the Pound edges higher amid US Dollar softness. Sterling found support from political reassurance and expectations that the BoE will maintain a gradual easing path. The Dollar weakened slightly after FOMC minutes revealed growing support for rate cuts later this year, especially if tariff-driven inflation proves temporary.
Outlook: With US Initial Jobless Claims and Fed speeches due today, GBP/USD may remain volatile. A dovish Fed tone could support further Sterling gains.
EUR/USD
Summary: EUR/USD rises toward 1.1750 as the Dollar retreats on tariff uncertainty and dovish Fed signals. The Euro is buoyed by news that the EU may avoid additional US tariffs, with trade chief Sefcovic suggesting a deal could be reached within days.
Outlook: Eurozone PPI and ECB commentary will guide direction. If the Fed signals rate cuts and the EU secures tariff exemptions, EUR/USD could extend gains.
USD/AUD
Summary: AUD/USD climbs to 0.6540, supported by a weaker Dollar and cautious RBA rhetoric. Governor Bullock warned that elevated labour costs and weak productivity could push inflation above forecasts, while China’s CPI and PPI data offered mixed signals.
Outlook: The Aussie may remain supported if US data underwhelms and risk sentiment improves. However, expectations of an August RBA rate cut could limit upside.
USD/CAD
Summary: USD/CAD trades near 1.3685 as the Dollar gains modestly on safe-haven flows. Tariff threats and global trade uncertainty weigh on the Canadian Dollar, though recovering oil prices offer some support.
Outlook: US labour data and Canadian employment figures will be pivotal. If US data disappoints and oil stabilises, USD/CAD could drift lower.
USD/CHF
Summary: USD/CHF hovers around 0.7940 after rebounding from weekly lows. The Dollar found support from reduced Fed rate-cut expectations, while the Swiss Franc remains firm on safe-haven demand amid trade and geopolitical risks.
Outlook: Swiss CPI and Fed commentary will shape near-term movement. If inflation remains subdued and trade tensions escalate, USD/CHF may retest recent lows.
Final Summary
Currency markets remain cautious as investors digest dovish Fed signals and await further tariff developments. Sterling stabilised on political reassurance, while the Euro gained on hopes of a US–EU trade deal. The Dollar softened slightly, supporting risk-sensitive currencies like the Aussie and Loonie. The Swiss Franc continues to attract safe-haven flows amid geopolitical uncertainty. Traders now turn to US labour data and central bank commentary for fresh direction.