25/04/2025
Written by: Ian Morley
Daily Currency Update – 24th March 2025
GBPEUR
Summary: The Euro has found some support after Germany’s upper house of parliament approved a major debt-financed spending package for defence and infrastructure. Meanwhile, the Bank of England’s decision to hold interest rates at 4.5% has weighed on the Pound, though Governor Andrew Bailey’s cautious stance has helped prevent significant downside.
Outlook: The focus will be on upcoming UK inflation data, due on Wednesday, which could impact BoE rate expectations. A weaker-than-expected inflation reading may reinforce expectations of rate cuts, keeping pressure on GBP. Meanwhile, Eurozone PMI data will also play a role in determining near-term direction.
GBPUSD
Summary: Sterling held steady against the US Dollar, trading around 1.2940. The Pound was supported by a weaker USD, as market sentiment was dampened by concerns over US President Donald Trump’s planned tariffs, set to take effect on April 2. Market participants remain cautious ahead of key US economic data releases.
Outlook: The release of UK inflation figures on Wednesday will be a key driver for GBP/USD. Meanwhile, US PMI data and the broader impact of Trump’s tariff policies will influence the USD’s direction. Should market sentiment turn risk-averse, the USD could regain strength, pressuring GBP/USD lower.
EURUSD
Summary: The Euro regained ground against the US Dollar, climbing towards 1.0850. The USD struggled after the Federal Reserve signalled a cautious stance on policy easing, while optimism surrounding Germany’s spending package supported the Euro.
Outlook: The market will be watching the upcoming US PMI data, which could impact rate expectations. A weaker-than-expected reading may reinforce expectations of a Fed rate cut later this year, keeping pressure on the Dollar. Meanwhile, Eurozone PMI figures will also influence sentiment towards the Euro.
USDCAD
Summary: USD/CAD is trading below 1.4350, as the Canadian Dollar found support amid rising oil prices. However, political uncertainty following Canada’s snap election announcement and concerns over US trade policies have limited CAD gains.
Outlook: We will be closely watching oil price movements and political developments in Canada. US economic data releases, including PMI figures, will also impact USD/CAD’s direction.
AUDUSD
Summary: The Australian Dollar rebounded, trading near 0.6300, following stronger-than-expected Judo Bank PMI data. Improved risk sentiment and expectations of Chinese stimulus measures have also supported AUD.
Outlook: The AUD will remain sensitive to global risk appetite and developments surrounding US trade policy. Any deterioration in risk sentiment or hawkish Fed commentary could limit further gains.
USDCHF
Summary: USD/CHF remains steady near 0.8840, as the Swiss Franc weakened amid improving global sentiment. Rising US Treasury yields supported the US Dollar, but concerns over the US economy limited gains.
Outlook: The focus remains on US PMI data and any developments in global risk sentiment. If concerns over Trump’s tariffs escalate, the Swiss Franc may find renewed safe-haven demand, pressuring USD/CHF lower.
Final Summary:
The US Dollar is facing renewed pressure ahead of key economic data, while the Pound remains stable ahead of the UK inflation report. The Euro has strengthened following Germany’s spending package approval, and the Australian Dollar has found support on improved economic data. Market participants remain cautious as they assess the potential impact of Trump’s upcoming tariff measures.