28/10/2025
Written by: Ian Morley
Daily Currency Market Update – 16th September 2025
GBP/EUR
Summary: GBP/EUR dips below 1.1550 despite upbeat UK employment data. The UK economy added 232K jobs in the three months to July, while the unemployment rate held steady at 4.7%. Wage growth moderated to 4.8% y/y, in line with expectations. The Euro found support following Fitch’s downgrade of France’s credit rating, which prompted caution but failed to trigger further selling.
Outlook: Sterling may remain firm ahead of Wednesday’s UK CPI release and Thursday’s BoE decision. Euro sentiment hinges on ECB commentary and political developments in France.
GBP/USD
Summary: GBP/USD climbs to 1.3640, its highest in two months, supported by steady UK employment data and broad USD weakness. Traders now price a 96% chance of a 25bps Fed rate cut on Wednesday, with growing speculation of further easing.
Outlook: GBP/USD may remain supported if UK inflation surprises to the upside. Fed commentary and dot plot projections will guide USD direction.
EUR/USD
Summary: EUR/USD rises toward 1.1800, buoyed by USD softness and improved German and Eurozone ZEW Economic Sentiment. The Euro shrugged off Fitch’s downgrade of France’s debt rating, with investors focusing on Wednesday’s Fed decision.
Outlook: Euro may test 1.1830 if Fed signals dovish forward guidance. ECB commentary and Eurozone industrial data will provide additional cues.
AUD/USD
Summary: AUD/USD retreats from a 10-month high of 0.6676, despite upbeat sentiment and US-China trade progress. RBA Assistant Governor Hunter noted inflation is nearing target and risks are balanced. Traders await US Retail Sales and Australian employment data.
Outlook: AUD may remain firm if US data disappoints and Australian jobs data confirms labour market resilience. RBA rate cut expectations have eased.
USD/CAD
Summary: USD/CAD trades near 1.3770, pressured by firmer oil prices and Fed rate cut bets. Canadian CPI due later today may influence BoC expectations ahead of Wednesday’s policy decision.
Outlook: CAD may gain if inflation surprises to the upside. US Retail Sales and BoC commentary will guide near-term direction.
USD/CHF
Summary: USD/CHF slumps to 0.7915, weighed by Fed dovish bets and weak US Dollar sentiment. Swiss producer inflation fell 0.6% m/m in August, raising concerns about demand and SNB policy direction.
Outlook: USD/CHF may remain under pressure if Fed signals aggressive easing. SNB may consider negative rates if inflation remains subdued.
Final Summary
Sterling rallies on steady employment data, while the Euro gains despite France’s credit downgrade. The US Dollar remains weak ahead of Wednesday’s Fed decision, with markets pricing in a 25bps cut and watching for dovish guidance. Commodity currencies are mixed, with AUD supported by trade optimism and CAD steady ahead of CPI and BoC. The Swiss Franc strengthens as inflation data fuels safe-haven demand and SNB policy speculation.