Currency news / August 1, 2025

Tariffs, CPI & NFP in focus

3 min read Thanim Islam

Thanim IslamAugust 1, 2025

Market snapshot:

Dollar riding high into job numbers
Tariff news sees risk-off to end the week

Yesterday's currency recap

The greenback extended its run, clocking its best weekly stretch in nearly three years as Trump’s new tariffs, hitting Canada, India, and Taiwan, forced a sharp rethink on global trade risk. GBPUSD slid to new 2-month lows with markets now pricing almost a 90% chance of a BoE cut next week, while EURUSD traded near prior support levels amid broader risk‑off. USDJPY pushed through to its strongest since April, with the BoJ’s muted inflation outlook offering little relief. Equities chopped around as investors weighed strong US earnings against tariff fears.

Today's GBP rates

Currency pair	Daily move*	Indicative rate**
GBPAUD	0.05%	2.0581
GBPCAD	0.07%	1.8319
GBPCHF	-0.33%	1.0751
GBPDKK	-0.24%	8.6413
GBPEUR	-0.24%	1.1579
GBPJPY	0.80%	199.478
GBPNOK	-0.12%	13.6502
GBPNZD	0.00%	2.2452
GBPSEK	-0.20%	12.9409
GBPUSD	-0.05%	1.3231

*Daily move - against G10 rates at 7:00 am, 01.08.25
** Indicative rates - interbank rates at 7:00 am, 01.08.25

Key data points

Currency	Event	Period	Consensus	Previous
EUR	EU CPI MoM	Jul	-0.10%	0.30%
EUR	EU CPI YoY	Jul	1.90%	2.00%
EUR	EU Core CPI YoY	Jun	2.30%	2.30%
USD	Nonfarm Payrolls	Jul	104,000	147,000
USD	Unemployment Rate	Jul	4.20%	4.10%
USD	Average Hourly Earnings MoM	Jul	0.30%	0.20%
USD	Average Hourly Earnings YoY	Jul	0.30%	3.70%

What we think

Today's nonfarm payrolls are expected to show a sharp slowdown to around 104,000 jobs (from June’s +147,000), with unemployment edging up to 4.2%, reinforcing signs of a cooling labour market. A softer print would likely weigh on the USD, drag US yields lower, and support risk assets, while a stronger‑than‑expected number would likely sustain the USD's strength and push yields higher as markets reassess Fed policy timing. Beyond the headline, traders will closely watch average hourly earnings and any revisions, with volatility set to spike whichever way the data lands. Any gains on GBPUSD on a soft print will likely be short lived ahead of next week's Bank of England meeting.

At 10am we have EU CPI numbers. These are expected to show a decline, which would back the recent sentiment suggesting the ECB could be done cutting interest rates – markets are only pricing a 50% chance of one more cut this year.

Markets have started the day in a very risk-off tone following last night's tariff announcements – so safe-haven plays will be the call of the day.

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

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