25/04/2025
Written by: Ian Morley
Daily Currency Update – 31st March 2025
GBPEUR
Summary: The pound hit a three-week high above 1.20 before retracing back to 1.1950, as investors digested the latest UK economic data. Mixed signals from the Eurozone kept the euro in check, with investors awaiting key inflation data later in the week.
Outlook: The focus will remain on upcoming Eurozone CPI figures and any Bank of England commentary regarding inflation. Any signs of persistent price pressures in the UK could support the pound, while weak Eurozone data may further weigh on the euro.
EURUSD
Summary: The euro weakened slightly against the dollar as strong US economic data reinforced expectations that the Federal Reserve will maintain a cautious approach to rate cuts. The euro also faced pressure amid lingering concerns about German economic performance.
Outlook: Key US data releases later this week, including non-farm payrolls and ISM manufacturing figures, will be critical in determining the dollar’s next moves. If the US economy continues to show resilience, the euro may struggle to gain ground.
GBPUSD
Summary: The pound held firm against the dollar, supported by expectations that the Bank of England will keep rates elevated for longer. However, the dollar remained well-bid amid strong economic indicators and a cautious Federal Reserve stance.
Outlook: UK economic data will be closely watched for any signs of slowing inflation, which could influence BoE policy expectations. In the US, upcoming employment and manufacturing reports will be key drivers of market sentiment.
USDAUD
Summary: The US dollar made gains against the Australian dollar as weaker commodity prices and risk-off sentiment weighed on the AUD. Strong US economic reports further bolstered demand for the greenback.
Outlook: The Australian dollar’s direction will likely hinge on upcoming Chinese economic data and Australian retail sales figures. If risk sentiment remains subdued, the US dollar could continue to outperform.
USDCAD
Summary: The Canadian dollar slipped against the US dollar as oil prices pulled back and strong US economic data lifted the greenback. The loonie struggled to find support despite recent positive Canadian GDP figures.
Outlook: Market attention will turn to the upcoming Canadian employment report and US jobs data. Any signs of labour market weakness in Canada could put further pressure on the CAD.
USDCHF
Summary: The Swiss franc remained under pressure against the US dollar as risk appetite favoured the greenback. The Swiss National Bank’s recent dovish tone has also weighed on the CHF.
Outlook: With key US data releases on the horizon, further strength in the dollar could push USDCHF higher. However, any geopolitical tensions could see renewed safe-haven demand for the franc.
Final Summary: Today’s currency markets will be largely driven by expectations surrounding central bank policy and economic data. The pound remains stable, while the euro struggles under weak sentiment. The dollar continues to be well-supported by strong US data. Looking ahead, key employment and inflation reports from the UK, US, and Eurozone will shape market movements in the coming days.