25/04/2025
Written by: Ian Morley
Daily Currency Update – 11th April 2025
GBPEUR
Summary: The pound continues to weaken against the euro, falling to 1.1490 as UK gilt yields struggle, adding further pressure to sterling. The euro, meanwhile, benefits from a pause in EU retaliatory tariffs on US goods, boosting sentiment.
Outlook: With expectations of further rate cuts from the European Central Bank, the euro’s momentum may be limited. However, if concerns over UK debt persist, sterling could face additional downside pressure.
EURUSD
Summary: The euro remains strong, trading above 1.1300 as the US dollar extends its decline. Concerns over a possible US recession due to escalating trade tensions and weaker-than-expected inflation data have weighed on the greenback.
Outlook: The euro’s strength could continue if the Federal Reserve signals more rate cuts. However, a stronger-than-expected US PPI report today could provide temporary relief for the dollar.
GBPUSD
Summary: The pound has posted gains against the US dollar, trading above 1.3060, as the greenback remains under pressure. A drop in US CPI inflation and a softer economic outlook have driven investor sentiment against the dollar.
Outlook: If risk appetite continues to improve and the US data disappoints, GBP could hold onto its gains. However, any signals of resilience from the US economy could curb sterling’s rally.
USDAUD
Summary: The Australian dollar initially saw gains but is now struggling to push higher against the US dollar, trading below 0.6250. The US administration’s confirmation of increased tariffs on Chinese imports has added to trade war concerns, which could weigh on the AUD.
Outlook: If risk sentiment worsens and US-China tensions escalate, the Aussie dollar may face further declines. However, any breakthrough in trade negotiations with the EU could offer support.
USDCAD
Summary: The Canadian dollar continues to strengthen, with USDCAD falling to 1.3920. A combination of a weaker US dollar and a temporary pause on additional US tariffs has supported the Loonie.
Outlook: The direction of USDCAD will depend on upcoming US data and oil price movements. If oil prices recover, CAD could see further gains. However, a stronger US dollar would likely cap further appreciation.
USDCHF
Summary: The Swiss franc remains one of the biggest gainers against the US dollar, with USDCHF losing nearly 4% on Thursday to reach its lowest level since 2011. Investors continue to favour the franc amid US economic concerns.
Outlook: If risk sentiment remains fragile and safe-haven demand persists, the franc could extend its gains. However, any shift in Fed policy expectations could limit further downside for USDCHF.
Final Summary:
The US dollar continues to slide as concerns over a potential US recession weigh on investor sentiment. The euro and pound remain strong, with GBPUSD trading above 1.30 and EURUSD maintaining its gains. Meanwhile, risk-sensitive currencies like AUD and CAD remain volatile, influenced by trade developments and global sentiment. Markets now turn their focus to today’s US PPI data, which could shape the next moves in FX markets.