25/04/2025
Written by: Ian Morley
Daily Currency Update – 25th March 2025
GBPEUR
Summary: The Pound is holding firm against the Euro, trading around 1.1950. The Bank of England’s hawkish stance continues to support Sterling, as the central bank remains cautious on rate cuts. Meanwhile, strong UK PMI data offset weaker manufacturing figures, further aiding GBP’s position. The Euro remains under pressure despite improving business activity in the Eurozone, as expectations of further rate cuts by the European Central Bank persist.
Outlook: The focus will be on upcoming UK CPI data, which could influence the BoE’s policy outlook. If inflation shows signs of easing, expectations for future rate cuts could rise, weighing on GBP. For the Euro, sentiment will be driven by business sentiment data from Germany and further guidance from ECB policymakers on their easing stance.
GBPUSD
Summary: The Pound struggled to hold onto gains against the US Dollar, with GBP/USD trading around 1.2900. The Dollar remained strong following upbeat US PMI data, which showed accelerating economic activity. President Trump’s tariff plans continue to add uncertainty, but the market reaction has been measured so far.
Outlook: UK inflation data and the Spring Statement from Chancellor Rachel Reeves will be key for Sterling’s direction. The Dollar’s next moves will depend on consumer confidence data and how the market interprets upcoming Fed comments regarding inflation and interest rates.
EURUSD
Summary: The Euro continues to struggle, with EUR/USD trading below 1.0800 as market sentiment remains cautious. Mixed PMI data from the Eurozone, with manufacturing still in contraction, added to concerns over economic growth. Meanwhile, US PMI data was better than expected, supporting the Dollar.
Outlook: Eurozone business sentiment data and further clarity on ECB rate cuts will drive the Euro’s direction. For the Dollar, consumer confidence data and upcoming inflation releases will be the main factors to watch.
USDCAD
Summary: USD/CAD is trading around 1.4320, recovering from recent losses. The Canadian Dollar found some support after Trump hinted that some countries could be exempt from new tariffs, easing trade concerns. However, the broader strength of the US Dollar and uncertainty around US economic policies continue to weigh on CAD.
Outlook: The focus will be on upcoming Canadian GDP data and the US tariff announcement on April 2. If Canada avoids major tariff measures, the CAD could gain some ground, but ongoing US economic strength may keep USD/CAD elevated.
AUDUSD
Summary: The Australian Dollar is holding steady after the Australian government presented its budget, which included new tax cuts aimed at supporting growth. However, the Aussie remains under pressure due to global risk sentiment and uncertainty surrounding Trump’s upcoming tariff announcement.
Outlook: The AUD may struggle to gain momentum if risk sentiment remains cautious. Investors will also be watching US data releases and any further developments regarding trade policy, particularly in relation to China, which could have a direct impact on AUD.
USDCHF
Summary: The US Dollar weakened slightly against the Swiss Franc, with USD/CHF trading near 0.8830. Geopolitical tensions in the Middle East have driven safe-haven demand for the Swiss Franc, while mixed US PMI data has kept the Dollar from making further gains.
Outlook: The Swiss Franc may continue to benefit from risk aversion if geopolitical tensions escalate. Meanwhile, US data releases, including consumer confidence and inflation figures, will determine whether the Dollar can regain momentum.
Final Summary: The Pound remains firm against the Euro but is struggling against the Dollar ahead of key UK economic data. The Euro is under pressure as the market eyes potential ECB rate cuts. The Dollar remains supported by strong PMI data, while the Canadian and Australian Dollars face external pressures from trade policy and risk sentiment. Safe-haven demand is boosting the Swiss Franc amid ongoing geopolitical concerns.