Currency news / September 16, 2025

Markets prepare for Fed rate cut

3 min read Thanim Islam

Thanim IslamSeptember 16, 2025

Market snapshot:

USD weakened as markets increased expect 0.25% rate cut tomorrow
UK average earnings data in line with expectations
Canadian CPI before interest rate decision tomorrow

Yesterday's currency recap

There was little data of consequence yesterday. USD weakened slightly across the day as markets continue to firm up their opinion that the Fed will cut interest rates by 0.25% tomorrow.

AUD continued its momentum yesterday, assisted by the weakening USD, solid commodity prices, and continued momentum in Chinese equity markets.

EUR weakened modestly yesterday after Fitch opted to downgrade France’s credit rating on Friday, amid growing uncertainty over the country’s political situation. Although the FX movement was relatively muted, concerns about the 2026 budget could continue to weigh on the euro.

GBP net benefitted, climbing to a new high since July against USD.

Today's GBP rates

Currency pair	Daily move*	Indicative rate**
GBPAUD	0.04%	2.0398
GBPCAD	0.05%	1.8774
GBPCHF	0.11%	1.0802
GBPDKK	0.01%	8.6292
GBPEUR	-0.01%	1.1559
GBPJPY	0.42%	200.39
GBPNOK	-0.12%	13.3806
GBPNZD	0.22%	2.2788
GBPSEK	-0.25%	12.6103
GBPUSD	0.36%	1.3606

*Daily move - against G10 rates on 16.09.25
** Indicative rates - interbank rates on 16.09.25

Key data points

Currency	Event	Period	Consensus	Previous
GBP	Average Weekly Earnings 3M/YoY	Jul	4.70%	4.60%
GBP	ILO Unemployment Rate 3Mths	Jul	4.70%	4.70%
GBP	Claimant Count Rate	Aug	--	4.40%
GBP	Jobless Claims Change	Aug	--	-6.2k
EUR	ZEW Survey Expectations	Sep	27.50	34.70
EUR	ZEW Survey Current Situation	Sep	-66.50	-68.60
CAD	Housing Starts	Aug	273.2k	294.1k
USD	Retail Sales Advance MoM	Aug	0.20%	0.50%
CAD	CPI NSA MoM	Aug	0.10%	0.30%
USD	Retail Sales Ex Auto MoM	Aug	0.40%	0.30%
CAD	CPI YoY	Aug	2.00%	1.70%
USD	Retail Sales Ex Auto and Gas	Aug	0.50%	0.20%
USD	Import Price Index MoM	Aug	-0.30%	0.40%
USD	Export Price Index MoM	Aug	0.10%	0.10%
USD	Industrial Production MoM	Aug	0.00%	-0.10%

What we think

Yesterday was very data light, and as expected the markets were relatively muted. The dollar edged off, as markets continue to anticipate an interest rate cut of 0.25% by the Fed tomorrow. Due to the proximity, markets may be more sensitive to retail sales data this afternoon, and it is one to keep an eye on. The same applies to the Canadian CPI this afternoon.

This morning the UK’s average earnings index came out in line with expectations at 4.7%, and has had a muted impact on the FX markets. It is key to remember wage rises continue to outpace price rises. For the UK, eyes will be on tomorrow’s CPI reading before Thursday’s interest rate decision.

The headlines will be dominated by Trump’s state visit, with new technology partnerships expected to be announced following Trump and Starmer’s day at Chequers on Thursday, as they host several technology CEOs.

Read more about upcoming events here:

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