01/10/2025
Written by: Ian Morley
Daily Currency Market Update – 17th July 2025
GBP/EUR
Summary: GBP/EUR trades near 1.1550, recovering modestly despite mixed UK labour market data. Unemployment rose to 4.7% and claimant counts increased, but the Pound found support from wage growth holding steady at 5% and a stronger-than-expected CPI print the day prior. The Euro remains steady ahead of final Eurozone inflation figures, though trade tensions linger as the EU prepares a €72 billion retaliatory tariff package.
Outlook: If Eurozone inflation confirms a 2% headline and 2.3% core, and UK fiscal concerns persist, GBP/EUR may struggle to extend gains. Trade headlines and ECB commentary will be key.
GBP/USD
Summary: GBP/USD slipped below 1.3400 after the UK employment report showed rising unemployment and slowing wage growth. The Dollar remains firm amid safe-haven demand and speculation around Fed Chair Powell’s future, though President Trump denied plans to dismiss him. US Retail Sales and Jobless Claims are in focus today, with markets watching for signs of tariff-driven inflation.
Outlook: If US consumption data surprises to the upside and Fed officials maintain a hawkish tone, GBP/USD could face renewed downside. A softer print may offer Sterling a reprieve.
EUR/USD
Summary: EUR/USD hovers near 1.1575, approaching three-week lows as the Dollar outperforms on risk aversion and geopolitical tensions. The Euro remains under pressure from trade uncertainty and cautious ECB rhetoric, despite a stronger Eurozone trade surplus and stable inflation expectations.
Outlook: Eurozone CPI and US Retail Sales will guide direction. If inflation holds firm and US data disappoints, EUR/USD may stabilise. Otherwise, downside risks persist.
USD/AUD
Summary: AUD/USD retreats to 0.6520 after disappointing Australian employment data. Job creation missed expectations at just 2K, while unemployment rose to 4.3%. The Aussie is further weighed down by expectations of an August RBA rate cut and softer Chinese retail sales.
Outlook: If US data remains firm and risk sentiment deteriorates, AUD/USD may extend losses. RBA commentary and Chinese growth signals will also be pivotal.
USD/CAD
Summary: USD/CAD climbs above 1.3700, supported by renewed Dollar strength and trade-related pressure on the Loonie. Canadian inflation surprised to the upside, but subdued oil prices and Trump’s 35% tariff threat on Canadian imports continue to weigh.
Outlook: US Retail Sales and Canadian trade headlines will be key. If US data impresses and oil remains soft, USD/CAD could test multi-week highs.
USD/CHF
Summary: USD/CHF trades around 0.8040, holding firm despite Switzerland’s trade surplus nearly doubling to CHF 4.3 billion. The Franc remains supported by safe-haven flows, while the Dollar benefits from reduced Fed rate cut expectations and geopolitical tensions.
Outlook: If US data confirms sticky inflation and Swiss CPI remains subdued, USD/CHF may stay range-bound. Any escalation in global risk could reinforce CHF strength.
Final Summary
Sterling remains under pressure following mixed labour market data, while the Dollar holds firm amid geopolitical uncertainty and inflation concerns. The Euro is steady ahead of final CPI figures, and commodity-linked currencies like the Aussie and Loonie are weighed down by soft domestic data and trade tensions. The Swiss Franc continues to attract safe-haven demand. Focus now turn to US Retail Sales, Jobless Claims, and Eurozone inflation for the next directional cues.