25/04/2025
Written by: Ian Morley
Daily Currency Update – 14th March 2025
GBPEUR
Summary: The Pound initially came under pressure following weaker-than-expected UK GDP data, which showed a 0.1% contraction in January. However, despite the economic weakness, GBP/EUR remains steady around 1.19 as markets assess broader economic trends in both the UK and Eurozone.
Outlook: With no major UK data releases today, attention turns to broader market sentiment and developments in the Eurozone. The ECB’s stance on future rate cuts and ongoing trade tensions with the US could influence the Euro’s direction. The Pound remains vulnerable to further downside pressure if economic concerns persist.
EURUSD
Summary: The Euro weakened against the Dollar, falling below 1.0850, as US President Donald Trump escalated trade tensions by threatening a 200% tariff on European wines and champagne. The growing risk of a US-EU trade war weighed on the Euro, while the Dollar remained supported by steady US economic data.
Outlook: Market participants will watch for further developments in the US-EU tariff dispute, which could increase volatility in the Euro. Additionally, the Michigan Consumer Sentiment Index release later today may influence the Dollar’s strength heading into next week.
GBPUSD
Summary: The Pound lost momentum against the Dollar, dropping below 1.2950 after the release of weaker UK GDP data. Meanwhile, expectations of a Federal Reserve rate cut in June supported market sentiment, keeping the Dollar stable.
Outlook: The focus now shifts to US economic data, including inflation and consumer sentiment reports. If the Fed signals further rate cuts, GBP/USD may find some relief, but for now, the Pound remains under pressure amid weak UK growth figures.
USDCAD
Summary: The Canadian Dollar remains under pressure, with USD/CAD holding above 1.4400. The currency struggled after Canada’s Finance Minister Dominic LeBlanc warned that tariffs could harm both the US and Canada. Meanwhile, oil prices remain weak, limiting support for the Canadian Dollar.
Outlook: US economic releases today could provide further direction for USD/CAD. Any signs of additional tariffs or trade tensions could weaken CAD further, while a stronger-than-expected Michigan Consumer Sentiment Index could keep the Dollar supported.
AUDUSD
Summary: The Australian Dollar found some support from rising commodity prices, but concerns over US trade policy remain a challenge. President Trump’s decision to maintain 25% tariffs on Australian steel and aluminium exports added pressure to the AUD.
Outlook: The Australian Dollar remains at risk of further downside, particularly if global trade tensions escalate. Markets will also be looking for any signals on future RBA rate moves, which could influence AUD sentiment in the coming days.
USDCHF
Summary: The US Dollar gained traction against the Swiss Franc, pushing USD/CHF higher to around 0.8840. Safe haven flows into the Franc were limited despite ongoing global uncertainties, as the US economy remains relatively stable.
Outlook: If trade tensions escalate further, the Swiss Franc could strengthen on safe-haven demand. However, for now, the Dollar remains supported by steady economic data and expectations that the Fed will maintain its cautious stance on rate cuts.
Final Summary:
The Pound remains under pressure following weak UK GDP data, while the Euro is struggling due to rising US-EU trade tensions. The US Dollar continues to hold firm, supported by stable economic data, while the Canadian and Australian Dollars face headwinds from trade concerns. Markets will be closely watching upcoming US inflation data and the Michigan Consumer Sentiment Index for further direction.