Currency news / August 5, 2025

Fed cut bets lift risk currencies

3 min read Thanim Islam

Thanim IslamAugust 5, 2025

Market snapshot:

Rate cut prospects buoy risk appetite
CHF lags

Yesterday's currency recap

USD losses were capped after Friday’s soft US payrolls report, with USD moves consolidating in a tight range yesterday.

GBP finished in the green ahead of Thursday's BoE meeting.

CHF underperformed despite surprise upside on CPI numbers as markets continued to focus on the 39% export tariff on Switzerland. The Swiss government announced yesterday it is ready present a new attractive offer to the US.

Read more about the Bank of England's interest rate decision here:

Today's GBP rates

Currency pair	Daily move*	Indicative rate**
GBPAUD	0.20%	2.055
GBPCAD	0.02%	1.8305
GBPCHF	0.62%	1.0741
GBPDKK	0.24%	8.5708
GBPEUR	0.24%	1.1485
GBPJPY	-0.12%	195.469
GBPNOK	0.32%	13.6391
GBPNZD	0.23%	2.2497
GBPSEK	0.25%	12.8454
GBPUSD	0.06%	1.3289

*Daily move - against G10 rates at 7:00 am, 05.08.25
** Indicative rates - interbank rates at 7:00 am, 05.08.25

Key data points

Currency	Event	Period	Consensus	Previous
EUR	PPI MoM	Jun	0.90%	-0.60%
EUR	PPI YoY	Jun	0.50%	0.30%
USD	ISM Services PMI	Jul	51.50	50.80
USD	ISM Prices Paid	Jul	67.50	67.50
USD	ISM New Orders	Jul	51.30	51.30
USD	ISM Employment	Jul	47.20	47.20

What we think

Today brings potentially directional movement with the release of the US ISM Services PMI, which could see demand for USD pick up, given expectations are for further expansion in the sector in July.

For the EUR, EU PPI numbers are due for release at 10am, indicating higher price pressures which would support recent argument that the ECB could well be done with cutting interest rates.

General risk appetite seems to have renewed with stocks attempting to recoup last week's losses as markets continue to digest Friday’s job numbers and the increased odds of a rate cut in September by the Fed. Fed member Mary Daly commented last night that the time for a rate cut is nearing and that two more rate cuts will be needed.

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