01/10/2025
Written by: Ian Morley
Daily Currency Market Update – 21st July 2025
GBP/EUR
Summary: GBP/EUR trades near 1.1550 as trade tensions between the US and EU weigh on the Euro. President Trump is pushing for a minimum 15–20% tariff on EU goods, prompting the bloc to prepare a €72 billion retaliation package. Sterling remains under pressure from weak UK labour data and expectations of a BoE rate cut in August, but finds modest support from pared September cut bets following stronger CPI and revised payroll figures.
Outlook: If trade talks stall and UK fiscal concerns persist, GBP/EUR may remain range-bound. Eurozone current account data and ECB commentary will be closely watched.
GBP/USD
Summary: GBP/USD consolidates near 1.3440 after three weeks of losses, supported by reduced BoE rate cut expectations and stable US Dollar performance. Investors await fresh tariff headlines, with the US having announced deals with the UK, Vietnam, and Indonesia, while negotiations with India and the EU continue.
Outlook: With the Fed in blackout ahead of next week’s meeting, GBP/USD may remain steady. UK Retail Sales and PMI data later this week could provide fresh direction.
EUR/USD
Summary: EUR/USD holds near 1.1630, recovering slightly despite lingering trade uncertainty. The Euro remains capped by Trump’s tariff demands and technical resistance at 1.1655–1.1665. Investors await Thursday’s ECB decision, with Lagarde’s comments expected to shape near-term sentiment.
Outlook: If no deal is reached before the August 1 deadline, EUR/USD could face renewed downside. ECB tone and US earnings data may also influence direction.
USD/AUD
Summary: AUD/USD trades just above 0.6500, subdued after the PBoC left rates unchanged and amid ongoing US–China trade tensions. The Aussie is pressured by expectations of RBA easing and cautious sentiment ahead of Governor Bullock’s speech and meeting minutes.
Outlook: If RBA signals further rate cuts and Chinese data remains mixed, AUD/USD may drift lower. US Dollar softness could offer limited support.
USD/CAD
Summary: USD/CAD rises to 1.3730 as trade tensions with the US persist. Trump’s 35% tariff threat on Canadian goods looms, though PM Carney’s envoy to Washington offers hope for a last-minute deal. Stable oil prices provide some support to the Loonie.
Outlook: BoC’s Business Outlook Survey and trade headlines will be key. If talks progress and oil firms, USD/CAD could retreat from recent highs.
USD/CHF
Summary: USD/CHF softens to 0.8010 as safe-haven demand for the Swiss Franc intensifies. The pair remains below key technical levels, with bearish momentum reinforced by tariff concerns and Fed uncertainty.
Outlook: Powell’s speech on Tuesday and geopolitical developments will guide movement. If risk aversion deepens, USD/CHF could test support near 0.7947.
Final Summary
Currency markets begin the week cautiously as global trade tensions dominate sentiment. Sterling steadies amid mixed UK data and reduced BoE cut expectations, while the Euro remains pressured by tariff uncertainty. The US Dollar holds firm ahead of key Fed commentary, and commodity-linked currencies like the Aussie and Loonie are mixed on domestic and external factors. The Swiss Franc continues to attract safe-haven flows. Focus now turns to central bank speeches and midweek data releases for fresh momentum.