01/10/2025
Written by: Ian Morley
Daily Currency Market Update – 14th August 2025
GBP/EUR
Summary: GBP/EUR broke above 1.1600 after stronger-than-expected UK GDP data. The UK economy grew 0.3% QoQ in Q2, beating forecasts of 0.1%, while June GDP rose 0.4% MoM. Manufacturing and industrial output also rebounded, supporting Sterling. The Euro remains subdued following weak ZEW sentiment data and cautious ECB rate expectations.
Outlook: If Eurozone GDP disappoints and UK data continues to outperform, GBP/EUR may extend gains. ECB commentary and UK inflation expectations will guide direction.
GBP/USD
Summary: GBP/USD climbed to a one-month high near 1.3600, supported by upbeat UK growth figures and persistent Fed rate cut expectations. US Treasury Secretary Bessent suggested a 50 bp cut in September, while CPI data showed limited tariff impact. Traders now price in nearly 94% odds of a Fed cut next month.
Outlook: US PPI and Jobless Claims will be key today. If inflation remains contained and Fed rhetoric stays dovish, GBP/USD may hold above 1.3550.
EUR/USD
Summary: EUR/USD consolidated near 1.1700 after a two-day rally driven by softer US CPI and rising Fed cut bets. German HICP confirmed subdued inflation at 1.8% YoY, while ZEW sentiment plunged. The Euro remains supported by risk-on flows and hopes of a US–Russia summit.
Outlook: Eurozone GDP and US inflation data will steer direction. If Fed dovishness persists and Eurozone growth holds, EUR/USD may test resistance near 1.1735.
USD/AUD
Summary: AUD/USD rose to 0.6550 after Australia’s unemployment rate fell to 4.2% and full-time employment surged. The RBA’s 25 bp rate cut was widely expected, and Governor Bullock signalled a cautious easing path. The Aussie also benefits from China’s tariff truce extension and strong export data.
Outlook: If US data disappoints and risk sentiment holds, AUD/USD may attempt further gains. RBA commentary and Chinese growth signals remain pivotal.
USD/CAD
Summary: USD/CAD trades near 1.3760, pressured by stable oil prices and dovish Fed expectations. Crude rebounded ahead of the Trump–Putin meeting, while Treasury Secretary Bessent floated a 50 bp Fed cut. The Loonie remains supported by commodity flows despite weak Canadian jobs data.
Outlook: US PPI and Canadian inflation data will guide movement. If Fed cut bets rise and oil holds firm, USD/CAD may drift lower.
USD/CHF
Summary: USD/CHF holds near 0.8050, consolidating ahead of US PPI data. The Dollar remains under pressure from Fed cut expectations, while the Swiss Franc faces headwinds from a 39% US tariff and subdued inflation. SNB may consider negative rates if CPI remains below target.
Outlook: If US inflation surprises and SNB signals dovish intent, USD/CHF may remain range-bound. Tariff developments and Fed commentary will shape direction.
Final Summary
Sterling rallied on strong GDP and factory data, while the Euro held firm amid cautious ECB expectations and geopolitical optimism. The US Dollar remains under pressure as traders price in aggressive Fed easing, with CPI showing limited tariff impact. Commodity-linked currencies like the Aussie and Loonie are supported by trade flows and stabilising risk sentiment. The Swiss Franc trades cautiously amid tariff concerns and soft inflation. Market focus now turns to US PPI, Jobless Claims, and Eurozone GDP for fresh momentum.