01/10/2025
Daily Currency Market Update – 28th May 2025
GBP/EUR
Summary: GBP/EUR holds firm above 1.1900 as traders await Germany’s April Unemployment Rate data later today. The Euro gained modest support following ECB policymaker Robert Holzmann’s call to pause rate cuts until September, citing ongoing trade tensions with the US. Meanwhile, Sterling sentiment remains underpinned by rising bets that the Bank of England will delay its easing cycle after stronger-than-expected April inflation figures.
Outlook: If German employment data disappoints, the Euro could weaken, supporting GBP/EUR. Market participants will also be watching further ECB commentary for clues on future rate moves.
GBP/USD
Summary: GBP/USD remains under pressure below 1.3500 after snapping a six-day winning streak. The US Dollar extended gains on Tuesday, driven by improving sentiment around the US economy ahead of the Federal Open Market Committee (FOMC) minutes release later today. US President Donald Trump’s decision to delay 50% tariffs on European imports until July 9 also contributed to risk appetite.
Outlook: Traders will be monitoring the FOMC minutes for insights into the Fed’s rate-cut trajectory. Any dovish signals could weaken the Dollar, supporting a recovery in GBP/USD.
EUR/USD
Summary: EUR/USD continues to decline towards 1.1300 as the US Dollar remains resilient. While the tariff delay between the US and the EU provided some relief for the Euro, bond market sentiment favoured the Greenback following indications of potential reductions in Japanese government debt issuance.
Outlook: The market will focus on today’s FOMC minutes and German employment data. A weaker Eurozone employment print could weigh further on EUR/USD.
USD/AUD
Summary: AUD/USD remains on the back foot near 0.5950 as the US Dollar extends its gains. The Reserve Bank of New Zealand cut its policy rate by 25 bps to 3.25%, reinforcing broader expectations of monetary easing across the region. Meanwhile, Australia’s Monthly CPI held steady at 2.4% year-on-year, slightly exceeding forecasts.
Outlook: Traders will watch how US bond yields and global risk sentiment evolve following the FOMC minutes release, as well as developments in Australia-China trade relations.
USD/CAD
Summary: USD/CAD climbs towards 1.3840, marking a fresh weekly top amid modest US Dollar strength. While upbeat US economic data provided support, concerns over the US fiscal deficit and bets on Fed rate cuts could limit further gains for the Greenback. Meanwhile, Canadian inflation figures released earlier this week reduced expectations for a Bank of Canada rate cut in June.
Outlook: Traders will be watching upcoming US Q1 GDP data and Canada’s Crude Oil price trends for further direction.
USD/CHF
Summary: USD/CHF has gained traction above 0.8250, supported by a modest rebound in the US Dollar and improving consumer confidence figures. Safe-haven flows into the Swiss Franc remain persistent due to ongoing geopolitical tensions and concerns over the US fiscal outlook.
Outlook: The Swiss ZEW Survey results and FOMC minutes later today could provide additional guidance. If Fed officials lean towards a cautious stance, the Dollar could face renewed pressure.
Final Summary
Currency markets remain focused on the upcoming FOMC minutes release, with the US Dollar maintaining its resilience ahead of key policy signals. Sterling is supported by expectations that the Bank of England will delay rate cuts, while the Euro struggles amid ongoing US-EU trade tensions and German economic concerns. Commodity-linked currencies, including the Australian and Canadian Dollars, remain pressured by policy shifts and global risk sentiment. We will be watching central bank commentary and economic releases for further market direction.