29/10/2025
Written by: Ian Morley
Daily Currency Market Update – 20th August 2025
GBP/EUR
Summary: GBP/EUR trades near 1.1580, steady after Monday’s modest gains. Sterling remains supported by last week’s robust UK GDP and factory data, while the Euro is buoyed by cautious optimism following Trump’s proposal for a direct Putin–Zelenskyy summit. The prospect of a ceasefire agreement continues to underpin Euro sentiment, though German PPI fell 0.2% MoM in July, extending the deflationary trend.
Outlook: If UK CPI surprises to the upside and Eurozone inflation remains subdued, GBP/EUR may attempt a move higher. ECB commentary and peace developments will guide direction.
GBP/USD
Summary: GBP/USD holds firm above 1.3550, consolidating after a strong two-week rally. Sterling remains supported by resilient UK macro data and tempered BoE easing expectations. The Dollar is range-bound ahead of Powell’s Jackson Hole speech, with markets pricing a 78% chance of a September Fed cut.
Outlook: UK inflation and US Retail Sales will be pivotal. If UK CPI remains sticky and Fed rhetoric turns dovish, GBP/USD may retest 1.3600.
EUR/USD
Summary: EUR/USD trades near 1.1700, supported by geopolitical optimism and subdued US Dollar performance. The Euro shrugged off weak German PPI data, while traders await Eurozone inflation figures and further updates on the proposed Putin–Zelenskyy summit.
Outlook: If peace talks progress and Fed signals easing, EUR/USD may attempt a break above 1.1730. Otherwise, consolidation is likely.
USD/AUD
Summary: AUD/USD trades above 0.6500, supported by stable risk sentiment and reduced urgency for further RBA easing. The Aussie continues to benefit from strong domestic employment data and China’s tariff truce extension.
Outlook: If US data underwhelms and global sentiment holds, AUD/USD may attempt further gains. RBA commentary and Chinese growth signals remain influential.
USD/CAD
Summary: USD/CAD holds near 1.3780, steady ahead of Canadian CPI data due today. The Loonie remains supported by stable oil prices and cautious BoC commentary, while the Dollar is subdued on Fed rate cut expectations.
Outlook: If Canadian inflation remains elevated and Fed dovishness persists, USD/CAD may drift lower. Oil trends and US data will also influence movement.
USD/CHF
Summary: USD/CHF trades around 0.8050, consolidating ahead of key US data and geopolitical headlines. The Swiss Franc remains firm amid safe-haven demand and subdued domestic inflation, while the Dollar is pressured by rising Fed cut expectations.
Outlook: If peace talks stall and Fed signals easing, USD/CHF may remain range-bound. SNB commentary and Jackson Hole developments will guide direction.
Final Summary
Sterling remains supported by strong UK fundamentals, while the Euro and Swiss Franc benefit from geopolitical optimism and safe-haven flows. The US Dollar is subdued ahead of key data and Fed commentary, with rate cut expectations still elevated. Commodity-linked currencies like the Aussie and Loonie are steady, supported by domestic resilience and stable risk sentiment. Focus now turns to UK CPI, Canadian inflation, and Jackson Hole for fresh momentum.