Daily Market Update: 26 September 2025
Key Currency Pair Movements
GBP/EUR
- Summary: The GBP/EUR cross weakened to around 1.1430 in Friday’s early European session.
- Outlook: The Euro (EUR) is strengthening against Pound Sterling (GBP) as traders anticipate the European Central Bank (ECB) is likely to keep interest rates steady until at least December 2025. The Pound is being weighed down by UK fiscal concerns, including a loss of business momentum and confidence ahead of possible new tax hikes. Bank of England (BoE) policymaker Megan Greene has also urged caution on rate cuts, citing growing risks that UK inflation will be stronger than forecast.
GBP/USD
- Summary: The pair lost nearly 0.8% on Thursday, touching its lowest level since the first week of August below 1.3330. It is now rebounding slightly, trading around 1.3350.
- Outlook: The pair faced challenges as the US Dollar advanced following stronger-than-expected US economic data, including a revised Q2 GDP growth of 3.8% and lower Initial Jobless Claims. Robust US data may prompt the Federal Reserve (Fed) to adopt a more cautious approach to cutting interest rates. However, the Pound Sterling’s downside may be restrained by UK inflation risks and an uncertain Bank of England policy stance.
EUR/USD
- Summary: The pair was forced under bearish pressure on Thursday, dropping to its weakest level in three weeks below 1.1650. It is correcting higher to the 1.1675 area but remains on track for a weekly decline.
- Outlook: The pair remains vulnerable due to a firm US Dollar, which was boosted by a batch of upbeat US macroeconomic figures that eased concerns about an economic downturn. Adding to market pressure, US President Donald Trump announced a new round of tariffs. Investors are now focused on the US Personal Consumption Expenditures (PCE) Price Index report for more clues about the Fed’s forward guidance.
AUD/USD
- Summary: The AUD/USD pair retreated for the third consecutive day, retesting the 0.6540 zone, which is near multi-week lows.
- Outlook: The pair is under pressure from the strong US Dollar, which has been boosted by a batch of upbeat US economic data and rising US yields. The upcoming US PCE inflation data and Fed speakers will be key for the pair’s direction.
USD/CAD
- Summary: The USD/CAD pair is trading around 1.3940, consolidating its recent strong gains against the Canadian Dollar.
- Outlook: The pair’s upside momentum is supported by the US Dollar’s strength due to robust US economic data (revised Q2 GDP and Jobless Claims). The Canadian Dollar remains sensitive to the cautious global market mood, which favours the safe-haven US Dollar.
USD/CHF
- Summary: The USD/CHF pair is trading around 0.7990, consolidating its position after the Swiss National Bank (SNB) meeting.
- Outlook: The SNB held its policy rate steady at 0% and maintained a dovish stance, citing risks to economic growth from US tariffs. The pair’s strength is currently driven by the robust US Dollar, and traders will watch US inflation data for further movement.
Final Summary
The US Dollar’s two-day rally is consolidating, driven by upbeat US macroeconomic data, including revised Q2 GDP growth of 3.8% and lower Initial Jobless Claims. This strong data may lead the Federal Reserve (Fed) to be cautious about future interest rate cuts. In Europe, the Euro is showing strength against Pound Sterling, as markets anticipate the European Central Bank (ECB) has concluded its rate-cutting cycle. Meanwhile, Pound Sterling is under pressure due to domestic fiscal concerns and a cautious stance from the Bank of England (BoE) on further monetary easing. The Australian, Canadian, and Swiss currencies are all feeling pressure from the strong US Dollar. Markets are now focused on the upcoming US Personal Consumption Expenditures (PCE) Price Index report for further directional cues.
Written by: Ian Morley