30/09/2025
Written by: Ian Morley
Daily Currency Market Update – 26th August 2025
GBP/EUR
Summary: GBP/EUR trades near 1.1570 as the Euro gains ground following the ECB’s signal to pause further rate cuts. The Pound remains capped despite upbeat UK PMI and July inflation data, with attention turning to BoE’s Mann speech later today.
Outlook: The ECB’s cautious tone may support the Euro near term. Sterling’s upside could be limited unless Mann signals hawkish intent. Cross likely to remain range-bound ahead of Eurozone consumer confidence data.
GBP/USD
Summary: GBP/USD retreats to the 1.3450 region, giving up late-week gains as markets reassess Fed rate cut expectations. With UK markets reopening after the long weekend, focus shifts to US consumer confidence and PCE inflation later this week.
Outlook: Cable may remain under pressure if US data supports a delayed Fed pivot. UK domestic data is light, leaving GBP/USD vulnerable to broader Dollar moves.
EUR/USD
Summary: EUR/USD trims gains to 1.1630 amid renewed Dollar strength and political tension over Fed independence. The Euro finds support from ECB’s pause stance and resilient labour market data, while Fed Governor Cook’s defiance adds uncertainty.
Outlook: Political risk and tariff threats may limit Dollar upside. Eurozone consumer confidence and US PCE inflation will be key for direction.
USD/AUD
Summary: AUD/USD weakens below 0.6500 as risk aversion intensifies following Trump’s tariff threats on China. RBA Minutes suggest further rate cuts may be needed, adding to downside pressure.
Outlook: AUD remains vulnerable to Chinese trade headlines and domestic rate expectations. A break below 0.6450 could open further losses.
USD/CAD
Summary: USD/CAD trades cautiously around 1.3850 as markets digest Fed Governor Cook’s dismissal and await US-Canada trade talks. The Loonie is steady despite soft oil prices and political noise.
Outlook: CAD may gain if trade negotiations show progress. US PCE inflation and Powell’s dovish tone remain central to near-term USD/CAD moves.
USD/CHF
Summary: USD/CHF holds near 0.8060, supported by Cook’s refusal to resign and Powell’s balanced Jackson Hole remarks. Swiss employment data and subdued inflation reinforce expectations for further SNB easing.
Outlook: CHF may attract safe-haven flows amid Fed uncertainty and trade tensions. SNB rate cut speculation and US inflation data will guide direction.
Final Summary
Markets remain focused on fallout from Powell’s Jackson Hole speech and political tension surrounding Fed independence. The Euro is buoyed by ECB’s pause stance, while Sterling struggles to build momentum despite firm UK data. Risk currencies like AUD and CAD face pressure from trade uncertainty and dovish central bank signals. The Swiss Franc may benefit from safe-haven demand, though SNB easing expectations persist. Key US data later this week will be pivotal for broader FX direction.