01/10/2025
Written by: Ian Morley
Daily Currency Market Update – 29th July 2025
GBP/EUR
Summary: GBP/EUR rallied to 1.1548, marking a 1.25% gain from Monday’s open, as Sterling rebounded sharply from 20-month lows. The Euro weakened following the US–EU trade deal, which imposed a blanket 15% tariff on European goods and drew criticism from France and Germany.
Outlook: With a light UK calendar and Eurozone sentiment data due, GBP/EUR may consolidate.
GBP/USD
Summary: GBP/USD trades below 1.3350 after losing 0.6% on Monday, pressured by broad Dollar strength and lingering UK economic concerns. The US–EU trade agreement boosted the Greenback, while UK retail sales and labour market softness continue to weigh on Sterling.
Outlook: Focus shifts to Wednesday’s Fed decision. If Powell signals caution on inflation and tariffs, GBP/USD may remain under pressure. UK mortgage lending data and political developments will also be watched.
EUR/USD
Summary: EUR/USD fell over 1% on Monday and remains below 1.1600, as the US–EU trade deal appeared to favour the US economy. The Euro faced additional pressure from France’s condemnation of the agreement and concerns over its impact on German exports.
Outlook: Eurozone HICP and GDP data will be key. If growth disappoints and US data remains firm, EUR/USD could extend losses.
USD/AUD
Summary: AUD/USD stabilised above 0.6500 after three days of declines, pressured by USD strength and cautious sentiment ahead of US–China trade talks. Traders await Australia’s Q2 CPI release, which will guide RBA policy expectations.
Outlook: If CPI softens and trade talks stall, AUD/USD may drift lower. A truce extension could offer support.
USD/CAD
Summary: USD/CAD trades near 1.3750, its highest in nearly two weeks, supported by Dollar strength and weaker oil prices. Canadian PM Carney warned that US offers may include reactionary tariffs, casting doubt on a near-term deal.
Outlook: Fed policy signals and Canadian GDP data will be pivotal. If trade tensions escalate, USD/CAD could push higher.
USD/CHF
Summary: USD/CHF extended gains to 0.8034, marking its strongest daily rise in over a week. The Swiss Franc weakened as safe-haven demand faded following the US–EU trade deal, while the SNB’s dovish stance widened policy divergence.
Outlook: If Fed holds rates and signals future cuts, USD/CHF may consolidate. Any geopolitical flare-up could revive CHF demand.
Final Summary
Sterling rebounded sharply against the Euro but remains soft versus the Dollar, as UK economic concerns persist. The Euro weakened on trade deal fallout, while the Dollar held firm ahead of Wednesday’s Fed decision. Commodity-linked currencies like the Aussie and Loonie are mixed, with CPI and trade talks in focus. The Swiss Franc eased as risk sentiment improved. Traders now turn to US data and central bank guidance for fresh momentum.