06/02/2025
GBP/EUR
Summary:
GBP/EUR saw some relief as UK CPI numbers came in below expectations, reducing gilt yields and easing risk premiums. EUR held firm, supported by cautious ECB commentary.
Outlook:
GBP may face headwinds as UK economic concerns persist. Tomorrow’s UK GDP figures will likely determine near-term direction, while EUR could see limited movement until more data from the Eurozone is released.
GBP/USD
Summary:
The pair rebounded after the UK CPI report provided a reprieve for sterling. The USD remained under pressure due to weaker PPI data and expectations of a gradual approach to tariff increases under the Trump administration.
Outlook:
US CPI numbers this afternoon will likely drive near-term movements. A softer reading could extend GBP/USD gains, while a stronger USD would reverse the pair’s recent progress.
EUR/USD
Summary:
The pair held firm below 1.0300 as markets awaited the US inflation report. Softer US PPI numbers earlier in the week dampened USD strength.
Outlook:
US CPI data will likely dictate near-term trends. A higher-than-expected print could reignite USD strength, while softer inflation could further support EUR/USD.
USD/JPY
Summary:
USD/JPY came under pressure as the JPY gained strength following hawkish remarks from BoJ Governor Ueda, hinting at a possible rate hike.
Outlook:
The yen may continue to strengthen if markets price in a more aggressive BoJ stance. US CPI data will also be a key factor.
AUD/USD
Summary:
The Australian dollar held steady as risk sentiment improved, supported by Chinese trade data and stronger commodity prices.
Outlook:
AUD remains sensitive to US CPI data and developments in US-China trade relations. A dovish RBA outlook may cap gains in the near term.
Final Summary
Today’s focus is squarely on the US CPI data, which could set the tone for major currency pairs in the coming days. GBP has found temporary relief, but broader UK economic challenges linger. Meanwhile, the USD remains under pressure, with a softer inflation print likely to support other majors.