01/10/2025
Written by: Ian Morley
Daily Currency Market Update – 25th July 2025
GBP/EUR
Summary: GBP/EUR slipped to 1.1460 after UK Retail Sales rose just 0.9% MoM in June, missing expectations of a 1.2% rebound. The Pound remains under pressure from soft consumer data and lingering fiscal concerns. Meanwhile, the Euro held firm following the ECB’s decision to keep rates on hold at 2.0%, with President Lagarde reiterating downside risks to growth but maintaining a “wait and watch” stance amid trade uncertainty.
Outlook: If German IFO sentiment improves and UK data continues to underwhelm, GBP/EUR may drift lower. ECB commentary and progress on EU–US trade talks will be key.
GBP/USD
Summary: GBP/USD fell below 1.3500 as Sterling weakened on disappointing UK Retail Sales and the Dollar rebounded on strong US labour market data. Initial Jobless Claims dropped to 217K, while Composite PMI rose to 54.6, signalling robust private sector activity. Trump’s visit to the Fed and renewed calls for lower rates added political pressure, though Fed officials remain divided.
Outlook: Durable Goods Orders and next week’s Fed decision will guide direction. If US data stays firm and Fed rhetoric remains cautious, GBP/USD could remain under pressure.
EUR/USD
Summary: EUR/USD eased to 1.1740, retreating from recent highs as trade uncertainty and Dollar strength weighed. Despite the ECB holding rates steady, Lagarde’s cautious tone and speculation around a US–EU tariff deal kept the Euro in consolidation mode.
Outlook: German IFO data and US inflation signals will be pivotal. If trade talks stall and US data surprises to the upside, EUR/USD may face renewed downside.
USD/AUD
Summary: AUD/USD pulled back to 0.6600 after reaching an eight-month high on Thursday. The Aussie was weighed down by cautious sentiment ahead of US–China trade talks and RBA Governor Bullock’s commitment to keeping inflation low. Strong US PMI data and Fed rate uncertainty also pressured the pair.
Outlook: If US data remains firm and RBA signals further easing, AUD/USD may struggle to hold recent gains. Chinese trade developments will also be key.
USD/CAD
Summary: USD/CAD rose to 1.3670 as the Dollar gained on trade optimism and Canadian Retail Sales fell 1.1% in May, in line with expectations. Investors are increasingly confident that Trump’s tariff policy may have limited economic impact, supporting the Greenback.
Outlook: If US–EU trade talks progress and Canadian data remains soft, USD/CAD could extend gains. Oil price trends and Fed commentary will also influence direction.
USD/CHF
Summary: USD/CHF edged up to 0.7965, supported by modest Dollar strength and easing safe-haven demand. Trump’s pivot toward dealmaking with China and speculation around Fed leadership changes have added uncertainty, though markets remain cautious ahead of next week’s Fed decision.
Outlook: If geopolitical tensions ease and US data stays firm, USD/CHF may remain supported. Any surprise escalation could revive demand for the Swiss Franc.
Final Summary
Sterling weakened on softer-than-expected Retail Sales, while the Euro held steady following the ECB’s cautious policy hold. The US Dollar rebounded on strong labour and PMI data, with trade optimism offering further support. Commodity-linked currencies like the Aussie and Loonie saw mixed performance amid domestic softness and global uncertainty. The Swiss Franc eased slightly as risk sentiment improved. Focus now turns to US Durable Goods Orders and next week’s Fed decision for fresh direction.