01/10/2025
Written by: Ian Morley
Daily Currency Market Update – 12th August 2025
GBP/EUR
Summary: GBP/EUR strengthened to 1.1570 following upbeat UK employment data. The ILO Unemployment Rate held steady at 4.7%, while job creation surged to 239K in Q2, easing concerns over labour market softness. Meanwhile, the Euro remained subdued ahead of the ZEW sentiment survey, with traders cautious amid weak German industrial data and ongoing trade uncertainty.
Outlook: If UK GDP data confirms resilience and ECB pause expectations hold, GBP/EUR may remain supported. Eurozone sentiment and inflation trends will be key in shaping direction.
GBP/USD
Summary: GBP/USD hovered near 1.3440, consolidating after last week’s rally. Sterling was buoyed by strong UK jobs data and tempered BoE easing expectations, while the Dollar held firm ahead of US CPI. Fed Governor Bowman reiterated support for three rate cuts this year, but traders await inflation confirmation.
Outlook: If US CPI surprises to the upside, GBP/USD could face resistance. Otherwise, dovish Fed signals and stable UK data may support further gains.
EUR/USD
Summary: EUR/USD held above 1.1600, stabilising after retreating from 1.1700 highs. The Euro found support from hopes of a US–Russia summit and ECB pause speculation, while the Dollar remained range-bound ahead of CPI.
Outlook: US inflation data will be pivotal. A strong print could pressure EUR/USD, while soft CPI may revive Fed cut bets and support the pair.
USD/AUD
Summary: AUD/USD traded near 0.6500 after the RBA cut rates by 25 bp to 3.6%, as expected. Governor Bullock signalled a forward-looking stance, citing global uncertainty. The Aussie was also supported by China’s tariff truce extension and upbeat trade data.
Outlook: If US CPI is soft and risk sentiment holds, AUD/USD may attempt a rebound. RBA commentary and Chinese growth signals remain key.
USD/CAD
Summary: USD/CAD hovered around 1.3780, steady ahead of US CPI. The Loonie was supported by rising oil prices and cautious optimism following the US–China tariff extension. However, weak Canadian jobs data and BoC easing expectations continue to weigh.
Outlook: If US inflation accelerates and Canadian data remains soft, USD/CAD may push higher. Oil trends and Fed commentary will guide movement.
USD/CHF
Summary: USD/CHF edged lower to 0.8100, pressured by Fed rate cut expectations. The Dollar struggled to extend gains, while the Swiss Franc remained under pressure from the 39% US tariff and weak domestic inflation.
Outlook: US CPI and Fed speeches will be key. If inflation surprises and trade tensions persist, USD/CHF may remain range-bound. CHF safe-haven demand could re-emerge if risk sentiment deteriorates.
Final Summary
Sterling gained on strong employment data, while the Euro remained cautious ahead of sentiment surveys and trade developments. The US Dollar held firm ahead of CPI, with Fed cut expectations in focus. Commodity-linked currencies like the Aussie and Loonie are mixed, and the Swiss Franc faces tariff-related headwinds.