01/10/2025
Written by: Ian Morley
Daily Currency Market Update – 30th June 2025
GBP/EUR
Summary: GBP/EUR falls below 1.17 as both currencies remain supported by improved risk sentiment and falling gas prices. The Pound benefits from the UK–US trade deal coming into force, which reduces tariffs on key exports. However, expectations of narrowing yield spreads later this year and the Bank of England’s cautious tone may limit Sterling’s upside. Meanwhile, the Euro is steady despite softer confidence data and mixed inflation prints from France and Spain.
Outlook: German and Eurozone inflation data due early next week will be key. If inflation surprises to the upside, the Euro could gain ground. Otherwise, GBP/EUR may remain range-bound.
GBP/USD
Summary: GBP/USD trades above 1.3700, consolidating after last week’s rally. The Pound is supported by the BoE’s cautious stance on rate cuts and the UK–US trade agreement, while the Dollar remains under pressure amid rising expectations of a Fed rate cut in September. Political uncertainty surrounding Fed leadership and weak US personal income and spending data have further weighed on the Greenback.
Outlook: With US labour market data due later this week, GBP/USD could extend gains if job growth slows and unemployment ticks higher as forecast.
EUR/USD
Summary: EUR/USD holds above 1.1700, maintaining its positive tone after last week’s 2% rally. The Euro is supported by optimism around global trade normalisation and reduced geopolitical tensions. However, disappointing German retail sales and soft confidence indicators have capped further upside.
Outlook: German CPI data later today and ECB President Lagarde’s speech will be closely watched. If inflation surprises to the upside, EUR/USD could test 1.1750.
USD/AUD
Summary: AUD/USD trades near 0.6540, recovering from last week’s dip. The Aussie is supported by a modest rise in the TD-MI Inflation Gauge and stronger Chinese PMI data, which lifted risk sentiment. However, expectations of a July RBA rate cut and softer Australian credit growth may limit gains.
Outlook: The pair may remain range-bound ahead of key US employment data. A dovish Fed tone and stable Chinese growth could support AUD/USD in the near term.
USD/CAD
Summary: USD/CAD retreats below 1.3700 as Canada resumes trade talks with the US and risk appetite improves. The Loonie is also supported by optimism around a potential trade deal by late July, despite weak April GDP data and lower oil prices last week.
Outlook: Canadian GDP and US labour data later this week will be pivotal. If Canadian growth rebounds and US data disappoints, USD/CAD could extend its decline.
USD/CHF
Summary: USD/CHF trades near 0.7990, hovering around its lowest level since 2011. The Franc remains supported by safe-haven demand and the SNB’s cautious inflation outlook, despite a weaker KOF Leading Indicator. The Dollar continues to struggle amid Fed rate cut expectations and political pressure on central bank independence.
Outlook: If US data confirms a slowing economy and Fed speakers reinforce a dovish stance, USD/CHF could break below 0.7950.
Final Summary
The US Dollar remains under pressure as markets price in a September Fed rate cut and digest political uncertainty. Sterling is supported by the UK–US trade deal and cautious BoE rhetoric, while the Euro holds firm despite mixed data. Commodity-linked currencies like the Aussie and Loonie benefit from improved sentiment and trade optimism. The Swiss Franc continues to attract safe-haven flows, keeping USD/CHF near multi-year lows. Traders now turn to inflation data and US labour market figures for the next directional cues.