25/04/2025
Written by: Ian Morley
Daily Currency Update – 13th March 2025
GBPEUR
Summary: The Pound rebounded against the Euro, rising back above 1.19. Sterling gained support following stronger risk appetite and optimism ahead of the UK GDP release later this week. Meanwhile, the Euro remains under pressure due to ongoing trade tensions between the EU and the US, with President Trump threatening additional tariffs in response to EU countermeasures.
Outlook: Market participants will be watching Friday’s UK GDP data closely, which could provide further support for the Pound if it surprises to the upside. The Euro remains vulnerable, with ECB policymakers expressing concerns over the potential impact of US tariffs on the German economy.
GBPUSD
Summary: The Pound consolidated around 1.2950 against the US Dollar after reaching a four-month high near 1.2990. Trump’s tariff threats and a cooling US inflation report have influenced trading sentiment. The US Dollar gained marginally after inflation data showed a decline, reducing expectations for aggressive Fed rate cuts.
Outlook: The US Producer Price Index (PPI) data later today will be key for market direction. If inflation pressures ease further, this could reinforce expectations of Fed rate cuts, potentially weakening the Dollar and supporting GBP/USD. On the UK side, GDP data on Friday could impact expectations for future Bank of England policy moves.
EURUSD
Summary: The Euro fell below 1.0900 against the US Dollar as concerns over trade tensions weighed on sentiment. The EU announced counter-tariffs on US goods worth €26 billion in response to Trump’s 25% tariffs on European steel and aluminium, raising fears of an escalating trade war.
Outlook: The Euro remains vulnerable to further downside if trade tensions escalate. US PPI data later today will be a key driver for the USD. If inflation slows further, it could limit USD gains and offer some relief to the Euro.
USDCAD
Summary: USD/CAD weakened to 1.4365 after the Bank of Canada cut interest rates by 25bps to 2.75%, marking its seventh consecutive rate cut. However, concerns over US trade policies and the potential impact on Canadian exports kept CAD under pressure.
Outlook: Market focus will be on US inflation data and the potential impact of Trump’s tariffs on Canada. If tensions escalate, CAD could weaken further. Meanwhile, oil prices remain a key factor for the Canadian Dollar’s performance.
AUDUSD
Summary: The Australian Dollar continued to struggle against the US Dollar, trading near 0.6300. Risk aversion due to global trade tensions and Trump’s refusal to exempt Australia from US tariffs on aluminium and steel weighed on sentiment.
Outlook: The outlook for the Aussie remains uncertain, with trade risks and expectations for a potential rate cut from the Reserve Bank of Australia keeping pressure on the currency. US inflation data later today will be a key driver for AUD/USD.
USDCHF
Summary: The US Dollar remained on the defensive against the Swiss Franc, with USD/CHF trading around 0.8810. Softer-than-expected US inflation data has reinforced expectations that the Fed could resume rate cuts in June, weakening the Greenback.
Outlook: Safe-haven demand for the Swiss Franc could keep USD/CHF under pressure, particularly if geopolitical tensions escalate further. The US PPI report later today will be a key focus for USD traders.
Final Summary:
The Pound rebounded against the Euro, recovering above 1.19, while GBP/USD remains near recent highs. The Euro continues to struggle under trade pressures, and the Canadian and Australian Dollars are also under pressure due to concerns over US tariffs. Market focus remains on US inflation data and upcoming UK GDP figures, which could drive further movement in Sterling. Safe-haven demand continues to support the Swiss Franc.