Daily Market Update: 17 October 2025
Key Currency Pair Movements
GBP/EUR
- Summary: The GBP/EUR pair trades on negative ground below 1.1470 early Friday.
- Outlook: Pound Sterling (GBP) is under pressure as the Euro (EUR) benefits from an easing of political instability. The French government successfully survived a no-confidence vote in Parliament on Thursday, which eased uncertainty and provided underlying support for the Euro. Meanwhile, the UK economic outlook remains subdued, offering little domestic support for the Pound.
GBP/USD
- Summary: Pound Sterling (GBP) holds steady, benefiting from the selling pressure around the US Dollar (USD).
- Outlook: The pair remains in a consolidation phase near 1.3450 after climbing to a fresh 10-day high on Thursday. The upside is primarily driven by the extended weakness in the USD, which is being hammered by fears of a prolonged US government shutdown and escalating US-China trade tensions. Investors will focus on speeches later in the day from Bank of England (BoE) Chief Economist Huw Pill and policymaker Megan Greene.
EUR/USD
- Summary: The pair trades modestly higher above 1.1700 early Friday, extending its recovery.
- Outlook: The Euro (EUR) is finding renewed strength as the French government survived two votes of no confidence, allowing Prime Minister Sébastien Lecornu to focus on the budget. This reduction in political risk, combined with the US Dollar’s ongoing slide, is supporting the pair. Later in the session, the Eurostat will publish revisions to the September Harmonized Index of Consumer Price (HICP) data, which is the next domestic catalyst.
AUD/USD
- Summary: The Australian Dollar is trading flat, consolidating near recent levels.
- Outlook: The risk-sensitive Australian Dollar (AUD) remains cautious despite the US Dollar’s continuous depreciation. The primary drag is the continued uncertainty and fears surrounding an intensifying Sino-US trade war, which limits the currency’s ability to rally given China’s importance as a trade partner.
USD/CAD
- Summary: The USD/CAD pair trades with a bearish tone, losing ground against the Canadian Dollar.
- Outlook: The outlook remains bearish for the pair due to the combination of US Dollar weakness—driven by trade tensions and the government shutdown—and firming prices for crude oil, Canada’s main export commodity. The rise in energy prices provides underlying support for the Canadian Dollar (CAD).
USD/CHF
- Summary: The pair extends its slide, hitting fresh monthly lows sub-0.7900 amid a risk-off mood.
- Outlook: The pair has breached the 0.7900 level and is on track for a significant weekly sell-off. The safe-haven Swiss Franc (CHF) is rallying, underpinned by the extreme risk-off market sentiment stemming from fears of a protracted US government shutdown and an escalating US-China trade war. This risk aversion is hammering the US Dollar, despite downbeat Swiss economic forecasts, which predicted below-average GDP growth for 2025.
Final Summary
The US Dollar (USD) continues its extended slide, pressured by a combination of factors: fears of a full-blown Sino-US trade war, a prolonged US government shutdown, and growing expectations that the Federal Reserve (Fed) may be forced to accelerate its easing cycle. The USD Index is trading around fresh one-month lows.
On the policy front, comments on Thursday by Fed governors Christopher Waller and Stephen Miran cemented market bets for further rate cuts, especially after the Fed’s Beige Book warned of a slight decline in consumer spending and a stalled labour market. Investors now look to US Industrial Production data for September, due later today, for the next domestic economic release.
Written by: Ian Morley