01/10/2025
Written by: Ian Morley
Daily Currency Market Update – 27th May 2025
GBP/EUR
Summary: GBP/EUR continues to trade above 1.1900, supported by the delay in US tariffs on European imports and stronger-than-expected UK economic data. Traders remain focused on the upcoming Eurozone Consumer Confidence data, which could provide further direction for the pair. Meanwhile, optimism surrounding a potential EU-US trade deal has lent some support to the Euro.
Outlook: The focus will be on Eurozone sentiment indicators, including German Retail Sales later in the week. Any signs of slowing consumer confidence could weigh on the Euro, while Sterling remains supported by resilient UK inflation and retail data.
GBP/USD
Summary: GBP/USD briefly tested the 1.3600 barrier before correcting lower to 1.3550 as uncertainty around US trade policy persists. The Pound remains strong as traders push back Bank of England rate cut bets after the latest inflation and retail sales figures came in above expectations. Meanwhile, the US Dollar struggles with stagflation risks as Fed officials voice concerns over President Trump’s trade policies.
Outlook: The US Durable Goods Orders report later today will be key in determining USD direction. If the data disappoints, GBP/USD could retest recent highs.
EUR/USD
Summary: EUR/USD continues to gather strength near 1.1400 after President Trump extended the deadline for 50% tariffs on European imports. Optimism surrounding US-EU trade talks has supported the Euro, while the US Dollar remains pressured by fiscal deficit concerns.
Outlook: The market will closely monitor the upcoming Eurozone Consumer Confidence report. If sentiment improves, EUR/USD could maintain its upward momentum.
USD/AUD
Summary: AUD/USD edged higher past 0.6500 on Monday, hitting levels last seen in late November 2024 before retreating slightly. Strong Chinese industrial profits and improved risk sentiment have supported the Australian Dollar, while the US Dollar remains subdued amid fiscal policy concerns.
Outlook: The Reserve Bank of Australia’s Monthly CPI Indicator and Construction Work Done data on Wednesday will be key in determining the next move for AUD/USD.
USD/CAD
Summary: USD/CAD weakened to around 1.3735 as investor sentiment favoured the Canadian Dollar. The “Sell America” theme continues as concerns over the US fiscal outlook weigh on the Greenback. Meanwhile, expectations for a Bank of Canada rate cut remain unchanged despite positive Canadian retail data.
Outlook: Traders will focus on upcoming US economic releases and oil price movements, which could influence CAD performance.
USD/CHF
Summary: USD/CHF rebounded slightly to around 0.8220, but bearish sentiment remains in play. Traders remain cautious amid concerns over the mounting US fiscal deficit, while safe-haven demand for the Swiss Franc continues.
Outlook: The US Conference Board’s Consumer Confidence report later today will be a key driver for USD/CHF movement. If confidence weakens, the Dollar could struggle further.
Final Summary
Currency markets remain influenced by US trade policy developments and fiscal concerns, with the US Dollar struggling against its peers. The Pound remains supported by strong UK economic data, while the Euro benefits from optimism surrounding US-EU trade talks. Commodity-linked currencies, including the Australian and Canadian Dollars, react to risk sentiment and domestic economic indicators. Looking ahead, traders will focus on key consumer confidence readings and central bank commentary for fresh direction.