30/09/2025
Written by: Ian Morley
Daily Currency Market Update – 27th August 2025
GBP/EUR
Summary: GBP/EUR climbs to 1.1590, supported by hawkish BoE commentary and political uncertainty in France. BoE’s Catherine Mann signalled a “persistent hold” on rates, citing inflation risks. Meanwhile, the Euro faces headwinds from a deteriorating German GfK Consumer Confidence reading and fears that French PM Bayrou may lose a confidence vote over austerity measures.
Outlook: Sterling may remain supported if BoE rate cut expectations continue to fade. Euro sentiment hinges on political developments in France and broader EU fiscal concerns.
GBP/USD
Summary: GBP/USD trades near 1.3450, retracing recent gains. The Pound finds modest support from reduced BoE rate cut bets, while the Dollar steadies amid rising concerns over Fed independence following President Trump’s dismissal of Governor Lisa Cook.
Outlook: GBP/USD may regain ground if BoE hawkishness persists. However, Fed-related uncertainty and upcoming US inflation data could limit upside.
EUR/USD
Summary: EUR/USD dips toward 1.1600 despite brief strength earlier in the week. The Euro struggles amid French political instability and weaker German sentiment, while the Dollar remains resilient despite Trump’s escalating feud with the Fed.
Outlook: Euro upside appears limited unless US data disappoints or Fed commentary turns decisively dovish. Political risks in France and tariff threats from the US remain key headwinds.
USD/AUD
Summary: AUD/USD trades around 0.6480, pressured by risk aversion and US Dollar strength. Australian CPI surprised to the upside at 2.8% y/y, but the Aussie failed to hold gains amid Trump’s tariff threats and cautious RBA commentary.
Outlook: AUD may remain under pressure if US-China tensions escalate. Domestic data strength could offer temporary support, but global risk sentiment dominates.
USD/CAD
Summary: USD/CAD edges up to 1.3850, with the Loonie subdued ahead of Canadian GDP data and trade talks with the US. BoC maintains its 2% inflation target, while Fed-related uncertainty weighs on broader sentiment.
Outlook: CAD may remain range-bound until Friday’s GDP release. US-Canada trade developments and Fed credibility concerns will guide near-term direction.
USD/CHF
Summary: USD/CHF consolidates around 0.8050, with the Franc steady amid legal challenges to Fed Governor Cook’s dismissal. The Dollar holds firm, supported by cautious Fed commentary and stable macro data.
Outlook: Swiss GDP and US PCE inflation data will be key. If Fed cut expectations rise further, USD/CHF may extend gains.
Final Summary
Sterling finds support from hawkish BoE remarks, while the Euro struggles under political and consumer sentiment pressures. The Dollar remains resilient despite unprecedented Fed-related drama. Commodity-linked currencies face mixed domestic data and global risk headwinds. Swiss Franc trades cautiously ahead of key inflation and growth figures. Market focus now shifts to upcoming GDP and PCE releases, alongside political developments in France and the US.