25/04/2025
Written by: Ian Morley
Daily Currency Update – 14th February 2025
GBPEUR
Summary: The Pound gained against the Euro on Thursday, reaching 1.2013 as UK GDP data surprised to the upside, growing 0.1% in Q4. The Euro remains under pressure ahead of today’s Eurozone GDP release, with concerns over potential US-EU trade tensions after Trump outlined a roadmap for reciprocal tariffs.
Outlook: If Eurozone GDP meets or exceeds expectations, the Euro could see some support. However, ongoing concerns about a trade war with the US may limit gains. The Pound’s next key test will be upcoming UK labour market and inflation data, which will shape expectations for future BoE policy moves.
GBPUSD
Summary: The Pound held onto recent gains, trading above 1.2550 after risk appetite improved when Trump delayed implementing reciprocal tariffs. The US Dollar weakened following a pullback in Treasury yields and softer US GDP data.
Outlook: The focus now turns to today’s US Retail Sales data, expected to show a slight decline of 0.1%. A weaker-than-expected reading could further weigh on the Dollar. For Sterling, BoE rate expectations will be influenced by upcoming UK inflation and employment figures next week.
EURUSD
Summary: The Euro rose to a two-week high near 1.0470 on Thursday but has since stabilised around 1.0450. Traders are cautious ahead of today’s Eurozone GDP release. Meanwhile, the Dollar remains under pressure after softer US GDP and expectations of prolonged Fed rate holds.
Outlook: If Eurozone GDP comes in higher than expected, the Euro may extend its gains. However, ECB policymakers have hinted at further rate cuts this year, which could limit upside potential. The US Retail Sales report later today will also be key for short-term direction.
USDCAD
Summary: USD/CAD weakened below 1.4200 as the US Dollar lost ground and Canada’s economic outlook remained stable. Trump’s renewed trade tariff threats add uncertainty, though the Loonie found some support from steady oil prices.
Outlook: If US Retail Sales disappoint, the Dollar could weaken further, keeping USD/CAD under pressure. However, Canadian economic concerns, particularly around trade risks, could prevent significant CAD appreciation.
AUDUSD
Summary: The Australian Dollar continued its recovery, supported by Trump’s decision to delay tariff implementation. However, expectations of a Reserve Bank of Australia rate cut in February remain a headwind.
Outlook: The AUD’s strength could be limited as traders await further confirmation of RBA policy direction. Today’s US Retail Sales report will be a key driver for the Dollar and broader risk sentiment.
USDCHF
Summary: USD/CHF strengthened to 0.9045 as the Dollar recovered slightly ahead of US Retail Sales data. Swiss inflation remains subdued, reinforcing expectations that the SNB will maintain its cautious policy stance.
Outlook: If US Retail Sales exceed expectations, the Dollar could gain further against the Franc. However, geopolitical tensions and safe-haven demand may limit CHF weakness.
Final Summary:
The Pound and Euro gained as risk sentiment improved following Trump’s decision to delay reciprocal tariffs. The Dollar remains under pressure after softer US GDP data, while focus now shifts to today’s US Retail Sales figures. Key risks ahead include Eurozone GDP results and upcoming UK inflation and employment data, which will shape future BoE and ECB policy expectations.