01/10/2025
Written by: Ian Morley
Daily Currency Market Update – 16th June 2025
GBP/EUR
Summary: GBP/EUR remains under pressure, trading near 1.1730 as geopolitical tensions escalate following Israel’s continued strikes on Iran. The Pound weakened as risk appetite deteriorated, with investors seeking safe-haven assets. Meanwhile, the Euro remains vulnerable to rising oil prices, which could weigh on the European economy.
Outlook: The market will monitor further developments in the Middle East and upcoming UK inflation data. If risk sentiment worsens, GBP/EUR could see additional downside.
GBP/USD
Summary: GBP/USD hovers around 1.3580 as markets brace for key central bank decisions this week. The Federal Reserve and Bank of England are both expected to hold rates steady, but guidance on future policy moves will be crucial. The Pound remains fragile amid geopolitical uncertainty, while the US Dollar struggles with trade policy concerns.
Outlook: The market will focus on Fed and BoE statements for rate guidance. If the Fed signals a dovish stance, GBP/USD could find support.
EUR/USD
Summary: EUR/USD edges higher toward 1.1600 as market sentiment improves slightly. The Euro remains supported by expectations that the European Central Bank will maintain a neutral stance, while the US Dollar faces pressure from trade uncertainty.
Outlook: The market will watch Eurozone inflation data and Fed policy signals for further direction.
USD/AUD
Summary: AUD/USD holds above 0.6500 as risk sentiment stabilises following China’s stronger-than-expected Retail Sales data. However, ongoing Middle East tensions and uncertainty surrounding US-China trade relations continue to weigh on the Aussie.
Outlook: The Australian Dollar’s movement will depend on global risk sentiment and upcoming domestic economic indicators.
USD/CAD
Summary: USD/CAD trades near 1.3600 as oil prices retreat from recent highs. The Canadian Dollar remains sensitive to crude oil price fluctuations, while investors await the G7 summit for potential trade policy updates.
Outlook: Crude oil price trends and US economic indicators will shape USD/CAD direction.
USD/CHF
Summary: USD/CHF strengthens above 0.8100 as safe-haven demand for the Swiss Franc remains elevated. Investors remain cautious amid escalating Middle East tensions, while the US Dollar finds support from stronger-than-expected consumer sentiment data.
Outlook: The market will monitor geopolitical developments and Fed policy signals for further USD/CHF movement.
Final Summary
Currency markets remain highly reactive to geopolitical tensions, central bank policy expectations, and trade developments. The Pound struggles amid risk aversion, while the Euro finds support from ECB policy signals. The US Dollar faces pressure from trade uncertainty, while commodity-linked currencies like the Australian and Canadian Dollars react to economic indicators and oil price trends. The Swiss Franc strengthens as safe-haven flows increase. The market will closely watch central bank statements and geopolitical developments for further market direction.