25/04/2025
Written by: Ian Morley
Daily Currency Update – 15th April 2025
GBPEUR
Summary: The pound strengthened against the euro on Monday, with the pair climbing above 1.16. Sterling was supported by strong UK labour market data and a general weakening in the euro ahead of this week’s European Central Bank (ECB) policy meeting. The euro’s lack of traction came despite firm Eurozone industrial output data, as markets remained focused on the expected rate cut from the ECB.
Outlook: If upcoming UK CPI data remains elevated, it may challenge expectations for a near-term BoE rate cut, lending further support to sterling. Meanwhile, the euro’s direction will likely hinge on the tone of Thursday’s ECB announcement, with any signs of dovishness likely to cap gains.
EURUSD
Summary: The euro slipped back slightly on Monday, trading near 1.1350, as the US dollar attempted to stabilise. Market concerns around stagflation and rising inflation expectations in the US were countered by comments from Federal Reserve officials who remained cautious on policy easing.
Outlook: While traders are eyeing a 25bps rate cut from the ECB later this week, the broader trend in EURUSD may hinge on sentiment surrounding the US economy. Any renewed fears of a recession or inconsistent trade policy announcements from the US could drive the dollar lower again.
GBPUSD
Summary: The pound reached fresh six-month highs near 1.3220 before easing slightly. Sterling’s rise was fuelled by strong UK labour market data and broader US dollar weakness, which has now extended into a fourth straight week.
Outlook: If upcoming UK CPI data shows signs of persistent inflation, it may challenge expectations of an imminent BoE rate cut. However, uncertainty surrounding US fiscal and trade policy will likely remain the primary driver of GBPUSD in the near term.
USDAUD
Summary: The Australian dollar strengthened for a fifth consecutive session against the US dollar, helped by improved global risk sentiment following the US exemption of certain technology products from new tariffs.
Outlook: If risk appetite holds up and China’s trade data remains robust, AUD may continue to perform well. However, RBA minutes showed uncertainty about the next move, and markets are pricing in a rate cut in May, which could limit upside.
USDCAD
Summary: USD/CAD rebounded from a five-month low, finding stability around the 1.3890 mark. The Loonie had benefited from easing fears over trade disruptions after the US paused some tariff implementations.
Outlook: Traders are now turning their attention to Canadian CPI data. Should inflation come in softer than expected, it could reinforce rate cut bets from the BoC and apply pressure on CAD. Otherwise, the pair could remain range-bound if global risk sentiment remains cautious.
USDCHF
Summary: The Swiss franc continues to trade strongly against the US dollar, supported by its safe-haven appeal amid ongoing geopolitical and trade uncertainties. The rapid appreciation of CHF has raised concerns at the Swiss National Bank (SNB), though no immediate action is expected.
Outlook: With little change expected from the SNB, CHF could maintain its strength unless the US dollar sees a significant turnaround. The upcoming ECB rate decision and ongoing trade negotiations will be closely watched for further clues.
Final Summary:
The US dollar remains under broad pressure amid ongoing trade and inflation uncertainty, with risk sentiment fragile and central banks expected to turn more dovish. Sterling rose initially on upbeat UK jobs data and held firm against the euro. The euro itself is holding up well as the ECB meeting approaches, while commodity currencies like the AUD and CAD are seeing mixed fortunes depending on trade flow and risk appetite. Markets remain highly reactive to shifting signals on US tariffs and global monetary policy.