20/06/2025
Written by: Ian Morley
GBPEUR
Summary:
The pound is struggling against the euro this morning after disappointing UK GDP and industrial production data for November. UK GDP grew by just 0.1% versus the expected 0.2%, while industrial production contracted by 0.4%. Meanwhile, the euro found moderate support as Germany’s core inflation rose to 3.3%, up from 3.0% the previous month, though concerns about stagflation in the Eurozone persist.
Outlook:
The pound may face continued headwinds as markets increase expectations of a Bank of England rate cut at its February meeting. For the euro, further movement could be influenced by ECB policy meeting accounts, though dovish sentiment remains a limiting factor for upside potential.
GBPUSD
Summary:
The pound has weakened to near 1.2200 against the dollar, reflecting poor UK economic data. Meanwhile, the US dollar remains subdued as markets anticipate dovish Fed policy, with two potential rate cuts expected this year.
Outlook:
The pound’s direction will likely hinge on upcoming UK data, while the dollar’s performance depends on high-impact US releases today, including retail sales and jobless claims figures. A dovish Fed could weigh further on the dollar, but any positive surprises in US data could provide temporary strength.
EURUSD
Summary:
The euro traded below 1.0300 against the dollar as expectations of ECB policy easing weighed on the currency. On the other hand, softer-than-expected US inflation data kept the dollar under pressure, with investors anticipating Fed rate cuts in 2025.
Outlook:
US retail sales data and jobless claims will likely shape short-term sentiment. The euro could remain constrained by dovish ECB expectations, while the dollar’s trajectory depends on confirmation of softer US economic conditions.
AUDUSD
Summary:
The Australian dollar dipped below 0.6200 after an initially positive reaction to robust employment data was overshadowed by a rise in the unemployment rate to 4.0%. Meanwhile, the US dollar stabilised ahead of key economic data releases.
Outlook:
The Australian dollar may face further pressure as markets factor in expectations of a February rate cut by the Reserve Bank of Australia. The dollar’s strength or weakness will depend on today’s US economic data, particularly retail sales figures.
USDCAD
Summary:
The US dollar strengthened against the Canadian dollar, with the pair trading above 1.4385. Declining oil prices undermined the Canadian dollar, while USD dip-buying resumed as markets reassessed the Fed’s potential rate cut trajectory.
Outlook:
Oil prices will continue to play a key role in CAD movement, while the dollar’s outlook will depend on US retail sales and jobless claims data. A stronger dollar could push the pair higher, particularly if oil prices remain subdued.
CHFUSD
Summary:
The Swiss franc remained firm against the dollar, with the pair trading around 1.0980. The franc continues to benefit from its safe-haven appeal amid global economic uncertainty, while the dollar remains subdued ahead of US economic data.
Outlook:
The Swiss franc may retain its strength if risk-off sentiment persists globally. However, US economic data releases today, including retail sales and jobless claims, could impact the dollar’s trajectory and influence the pair’s direction.
Final Summary
The pound is struggling amid weak UK data, while the euro and US dollar faced mixed fortunes due to dovish central bank expectations. The Swiss franc held firm on safe-haven demand, the Australian dollar weakened on rising unemployment, and the Canadian dollar remained under pressure from declining oil prices. Markets now turn their attention to key US economic data, which will likely dictate short-term movements across major currency pairs.