Currency news

EUR gains as ECB signals no more cuts

Head of FX Analysis
-
3
min read
Published:
July 25, 2025
  • The EUR continues its 2025 winning streak
  • GBP falls further on domestic concerns


Yesterday's currency recap

The EUR extended its upwards trajectory this week and continued to gain following yesterday's ECB meeting. The bank elected to hold rates at 2% and adopted a “waiting-for-trade clarity” stance. President Lagarde emphasised that inflation is at target and the bank is now data-dependent, ready to act but not pre-committing - a cautious pivot after eight rate cuts. Market pricing now only suggests a 67% chance of another rate cut this year. EU PMIs earlier in the day came in better than expected. GBPEUR traded back towards the April lows.

GBP wasn’t helped earlier in the day, with PMI numbers showing slower activity overall and signalling job cuts are accelerating, hinting at deeper economic pressures and reinforcing markets’ bets on an August BoE rate cut – markets now assign a 94% chance.

US Manufacturing PMI plunged to 49.5, the first contraction in seven months and a sharp downtick from June’s 52.9 flash print and forecasts of 52.7. That sub‑50 reading suggests shrinking manufacturing output, weighing on overall growth and reinforcing concerns that tariff‐related cost pressures are biting into factories. USD was marginally stronger on the day.

Today's GBP rates

Currency pair Daily move* Indicative rate**
GBPAUD -0.35% 2.0491
GBPCAD -0.10% 1.8447
GBPCHF -0.10% 1.0754
GBPDKK -0.39% 8.5784
GBPEUR -0.39% 1.1492
GBPJPY -0.15% 198.624
GBPNOK -0.40% 13.6688
GBPNZD -0.30% 2.2387
GBPSEK -0.23% 12.8784
GBPUSD -0.42% 1.3525


*Daily move - against
G10 rates at 7:00 am, 25.07.25

** Indicative rates - interbank rates at 7:00 am, 25.07.25

What we think

USD is firmer this morning following comments from Trump stating that firing Fed Chair Jerome Powell wasn’t necessary. GBP has taken another hit this morning after a smaller-than-expected rise in retail sales in June. The data caps off a weak quarter for consumer spending, amidst uncertainty in the global economy, the potential for future tax rises, along a cooler job market.  After attempting to recover earlier this week, it looks like GBP is set to have another losing week as domestic concerns continue to linger. GBPEUR is now trading at the lows seen in April and, in conjunction with the current support for EUR, there is a threat that we could see the pair trade towards the November 2023 lows.

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