25/04/2025
Written by: Ian Morley
Daily Currency Update – 17th February 2025
GBPEUR
Summary:
The Pound remains steady against the Euro, trading near 1.2020. The Euro faces downward pressure due to expectations of further rate cuts from the European Central Bank (ECB). UK economic data continues to show resilience, with GDP growth exceeding expectations. However, upcoming UK employment and inflation data will be key drivers in the near term.
Outlook:
Traders will closely watch UK labour market data on Tuesday and inflation figures on Wednesday, which could impact expectations for the Bank of England’s (BoE) next rate move. Any further signs of economic strength may support the Pound, while dovish commentary from ECB officials could keep the Euro under pressure.
GBPUSD
Summary:
The Pound held onto recent gains, trading around 1.2600, after reaching its strongest level since December. The US Dollar remains under pressure following weaker-than-expected Retail Sales data and uncertainty around President Trump’s tariff policies.
Outlook:
Markets will focus on upcoming UK employment and inflation data, which could shape BoE rate expectations. Meanwhile, comments from Federal Reserve officials later today may influence Dollar sentiment. If Fed officials maintain a cautious stance on rate cuts, the Dollar could stabilise.
EURUSD
Summary:
EUR/USD has paused its recent winning streak, trading around 1.0490. The Euro has been supported by a softer US Dollar, but further gains have been capped by expectations of more ECB rate cuts. A weaker US Retail Sales report last week has increased speculation about Fed rate cuts later this year.
Outlook:
The pair could gain momentum if progress is made in Ukraine peace talks, as reports suggest US and Russian officials will meet in Saudi Arabia this week. However, dovish ECB expectations may limit further Euro strength.
USDCAD
Summary:
USD/CAD remains around 1.4175, with the Canadian Dollar benefitting from higher oil prices. The US Dollar is under pressure due to weak economic data and uncertainty around US tariff policies.
Outlook:
Markets will closely monitor Tuesday’s Canadian inflation data, which could influence expectations for future Bank of Canada rate moves. Additionally, any developments in US trade policy could impact the pair.
AUDUSD
Summary:
The Australian Dollar has extended its recent gains, trading above 0.6350. The risk-on sentiment following delays in Trump’s tariff plans has supported the AUD. However, expectations of an interest rate cut from the Reserve Bank of Australia (RBA) on Tuesday may weigh on the currency.
Outlook:
The RBA is widely expected to cut rates by 25 basis points to 4.10%, which could put pressure on the AUD. The market will also be watching for US data releases, including inflation figures, to determine the Dollar’s next moves.
USDCHF
Summary:
USD/CHF has edged lower to 0.8990 as the US Dollar weakened following disappointing Retail Sales data. The Swiss Franc continues to attract safe-haven flows amid geopolitical uncertainty.
Outlook:
Traders will watch geopolitical developments, particularly US-Russia talks on Ukraine, which could influence risk sentiment. Additionally, upcoming Swiss economic data may provide further direction for the Franc.
Final Summary:
The US Dollar remains under pressure after weak Retail Sales data, while expectations of further ECB rate cuts weigh on the Euro. The Pound remains steady ahead of key UK economic releases, and the Canadian Dollar is benefitting from firmer oil prices. The Australian Dollar is supported by risk-on sentiment but may weaken if the RBA cuts rates as expected. Safe-haven demand is supporting the Swiss Franc, while geopolitical events and Fed commentary will be key drivers for currency movements this week.