25/04/2025
Written by: Ian Morley
Daily Currency Update – 25th February 2025
GBPEUR
Summary: The Pound held steady against the Euro on Monday, hovering around 1.2050 as a lack of major domestic data kept movement limited. The UK’s latest PMI data signalled economic stagnation, with weak demand and rising costs weighing on the outlook. Meanwhile, the Euro showed some early gains following German election results but retraced as the day progressed.
Outlook: The focus now shifts to the European Central Bank’s Negotiated Wage Rates data, which could provide further insight into inflation pressures within the Eurozone. The UK labour market remains a concern, particularly with rising employer costs, which could limit further Sterling gains.
GBPUSD
Summary: The Pound remained stable against the US Dollar, trading near 1.2635, as investors balanced Trump’s renewed tariff threats with Bank of England policy expectations. The BoE remains under pressure to cut rates, while US markets remain focused on inflation data and Federal Reserve policy signals.
Outlook: Attention now turns to upcoming US economic data, including Durable Goods Orders and the PCE inflation report later this week. Any signs of persistent inflation could delay Fed rate cuts and provide support for the USD.
EURUSD
Summary: The Euro struggled to hold onto early gains, fluctuating around 1.0450. German election results initially provided some support but concerns over further ECB rate cuts and weak Eurozone growth capped upside potential.
Outlook: With Eurozone inflation remaining elevated and ECB rate cuts anticipated, the Euro may struggle for sustained upside. The US PCE inflation report on Friday will be a key driver for the next major move in EUR/USD.
USDCAD
Summary: USD/CAD traded lower on Monday, dipping below 1.4250 as recovering oil prices supported the Canadian Dollar. The US Dollar also struggled due to weaker economic data, while the Bank of Canada’s outlook remains uncertain after its latest policy moves.
Outlook: Customers should be watching upcoming US economic releases and oil price trends for direction. Trump’s planned tariffs on Canada could also play a role in CAD movements in the coming weeks.
AUDUSD
Summary: The Australian Dollar remained stable, but upside was limited due to risk aversion and renewed concerns over US-China trade tensions. The People’s Bank of China injected additional liquidity into the market, but the impact on AUD was muted.
Outlook: Customers should focus on Australia’s upcoming inflation report, which could influence Reserve Bank of Australia policy expectations. A softer-than-expected print may increase the chances of further RBA rate cuts.
USDCHF
Summary: The US Dollar weakened against the Swiss Franc, trading around 0.8970 as softer US economic data and falling Treasury yields weighed on USD sentiment. The Swiss Franc also found some support from rising bond yields.
Outlook: With the Federal Reserve expected to hold rates steady in the near term, the USD could remain under pressure. However, any signs of economic weakness in Switzerland may shift expectations for further Swiss National Bank rate cuts.
Final Summary:
The currency market remains choppy, with traders focused on upcoming economic data and central bank policy expectations. Trump’s tariff plans continue to add uncertainty, while key inflation data later in the week will be a major driver for the US Dollar. The Pound remains steady but faces headwinds from a weak UK economy, while the Euro struggles amid expectations of further ECB rate cuts.