27/10/2025
Written by: Ian Morley
Daily Currency Market Update – 27th October 2025
GBP/EUR
Summary: GBP/EUR edged lower to 1.1450 as traders weighed diverging BoE and ECB policy expectations. Sterling remains pressured by rising bets for a 25bps BoE rate cut in November, following steady September inflation and signs of labour market cooling. Meanwhile, ECB rate cut expectations have faded, with futures pricing only a 25bps move by end-2026. Political uncertainty in France, including threats to topple the government and Moody’s outlook downgrade, limited Euro gains.
Outlook: GBP/EUR may remain rangebound ahead of Thursday’s ECB decision. UK fiscal concerns and Eurozone political risks will shape sentiment.
GBP/USD
Summary: GBP/USD holds above 1.3300 after closing six consecutive sessions lower last week. The pair touched its weakest level since mid-October below 1.3290 on Friday, weighed by BoE rate cut expectations and fiscal uncertainty.
Outlook: Sterling may stabilise ahead of Wednesday’s Fed decision. US-China trade developments and UK budget commentary will guide direction.
EUR/USD
Summary: EUR/USD trades at 1.1625, pulling back from last week’s high near 1.1650. The pair remains supported by fading ECB easing bets and optimism around US-China trade talks. Investors await monetary policy decisions from both the Fed and ECB later this week.
Outlook: Euro may remain firm if ECB signals policy pause. US CPI and Fed commentary will be key for near-term direction.
AUD/USD
Summary: AUD/USD opened higher on Monday, supported by optimism over US-China trade progress. The pair gained as negotiators agreed on key issues ahead of Thursday’s Trump-Xi meeting. However, the AUD faces headwinds from rising RBA rate cut expectations, with markets pricing a 67% chance of a cut to 3.35% at the next meeting.
Outlook: AUD may remain volatile ahead of Q3 CPI and trade developments. RBA tone and China’s economic signals will be pivotal.
USD/CAD
Summary: USD/CAD slipped to 1.3980, pressured by softer US inflation data and Fed rate cut expectations. The pair faces additional uncertainty after President Trump announced a 10% tariff hike on Canada, following the termination of trade talks last week.
Outlook: CAD may remain under pressure ahead of Wednesday’s BoC decision. Oil prices and US-China trade sentiment will influence direction.
USD/CHF
Summary: USD/CHF trades around 0.7960, recovering from earlier losses on easing US-China trade tensions. The Dollar remains supported by expectations of a Fed rate cut, while the Franc is steady following SNB minutes that dismissed further easing.
Outlook: USD/CHF may consolidate ahead of central bank decisions. Trade optimism and inflation data will guide CHF sentiment.
Final Summary
Daily Currency Market Update – 27th October 2025
GBP/EUR
Summary: GBP/EUR edged lower to 1.1450 as traders weighed diverging BoE and ECB policy expectations. Sterling remains pressured by rising bets for a 25bps BoE rate cut in November, following steady September inflation and signs of labour market cooling. Meanwhile, ECB rate cut expectations have faded, with futures pricing only a 25bps move by end-2026. Political uncertainty in France, including threats to topple the government and Moody’s outlook downgrade, limited Euro gains.
Outlook: GBP/EUR may remain rangebound ahead of Thursday’s ECB decision. UK fiscal concerns and Eurozone political risks will shape sentiment.
GBP/USD
Summary: GBP/USD holds above 1.3300 after closing six consecutive sessions lower last week. The pair touched its weakest level since mid-October below 1.3290 on Friday, weighed by BoE rate cut expectations and fiscal uncertainty.
Outlook: Sterling may stabilise ahead of Wednesday’s Fed decision. US-China trade developments and UK budget commentary will guide direction.
EUR/USD
Summary: EUR/USD trades at 1.1625, pulling back from last week’s high near 1.1650. The pair remains supported by fading ECB easing bets and optimism around US-China trade talks. Investors await monetary policy decisions from both the Fed and ECB later this week.
Outlook: Euro may remain firm if ECB signals policy pause. US CPI and Fed commentary will be key for near-term direction.
AUD/USD
Summary: AUD/USD opened higher on Monday, supported by optimism over US-China trade progress. The pair gained as negotiators agreed on key issues ahead of Thursday’s Trump-Xi meeting. However, the AUD faces headwinds from rising RBA rate cut expectations, with markets pricing a 67% chance of a cut to 3.35% at the next meeting.
Outlook: AUD may remain volatile ahead of Q3 CPI and trade developments. RBA tone and China’s economic signals will be pivotal.
USD/CAD
Summary: USD/CAD slipped to 1.3980, pressured by softer US inflation data and Fed rate cut expectations. The pair faces additional uncertainty after President Trump announced a 10% tariff hike on Canada, following the termination of trade talks last week.
Outlook: CAD may remain under pressure ahead of Wednesday’s BoC decision. Oil prices and US-China trade sentiment will influence direction.
USD/CHF
Summary: USD/CHF trades around 0.7960, recovering from earlier losses on easing US-China trade tensions. The Dollar remains supported by expectations of a Fed rate cut, while the Franc is steady following SNB minutes that dismissed further easing.
Outlook: USD/CHF may consolidate ahead of central bank decisions. Trade optimism and inflation data will guide CHF sentiment.
Final Summary
Sterling remains soft amid BoE rate cut expectations and fiscal concerns, while the Euro holds firm on fading ECB easing bets despite French political risks. The US Dollar trades cautiously ahead of Wednesday’s Fed decision, with softer inflation data reinforcing rate cut expectations. Commodity currencies are mixed, with AUD supported by trade optimism and CAD weighed by tariff tensions. The Swiss Franc steadies as SNB signals no immediate policy change.