August Exchange FX Market Outlook - 17/06/2025

As we move deeper into June, foreign exchange markets are poised for further volatility driven by critical economic data, monetary policy speculation, and geopolitical developments. This week’s calendar features key releases from the UK and US, with political events and global risk sentiment also shaping investor direction.

• Friday – Retail Sales
  UK retail sales figures are due Friday and will be closely watched for signs of consumer strength. Markets are expecting modest growth following recent softness in household spending. A surprise to the downside could weigh on the GBP, increasing the likelihood of future interest rate cuts.

• BoE Commentary Throughout the Week
  A handful of Monetary Policy Committee (MPC) members will speak this week. After holding rates in May, markets remain unsure whether the Bank of England will move to cut in the coming months. Dovish commentary could see GBP/USD dip toward recent support levels, while a firmer tone may trigger some recovery.

📉 Potential FX Market Impact: A weak print on Friday, alongside cautious MPC language, could drive a pullback in GBP across the board, particularly against the USD and EUR.

• Wednesday – CPI (Consumer Price Index)
  After last week's soft US jobless claims, all eyes are now on the June CPI report. Markets are split: a cool print could increase bets on a September Fed rate cut, whereas any upside surprise may halt the recent USD weakness.

• Thursday – PPI & Retail Sales
  Producer Price Index data and retail sales will deepen the inflation narrative. Strong retail figures could reignite expectations for a delayed Fed easing cycle.

• Friday – University of Michigan Sentiment
  Consumer confidence and inflation expectations may sway short-term USD sentiment heading into the weekend.

📈 Potential FX Market Impact: A dovish inflation signal may pressure the dollar, boosting EUR/USD and GBP/USD. Conversely, a sticky inflation outlook could revive recent USD strength.

While the economic calendar for the Eurozone is light, recent political instability is making waves:

• No Major Economic Data
  With no key data releases scheduled, markets will be guided by political headlines and central bank tone following last week’s ECB rate cut.

• French Political Turmoil
  Snap parliamentary elections in France have sparked volatility in French bonds and equity markets. Euro investors remain on edge about potential fiscal implications.

📊 Potential FX Market Impact: Political instability may weigh on the EUR, particularly if bond spreads widen or investor confidence drops.

• Japan – Trade Data & Yen Watching
  Japanese authorities are again watching USD/JPY closely as the pair flirts with levels that could trigger intervention. Traders are sensitive to trade balance figures due mid-week.

• Australia – Labour Market Print
  Australia releases unemployment and wage data on Thursday. With the RBA remaining cautious on inflation, a weak print could further dent the AUD.

• Canada – Inflation Ahead
  Canadian CPI on Tuesday will guide CAD. A hot read may pause BoC’s dovish lean, giving CAD some support.

• China – Industrial Output & Retail Sales
  Monday’s data was mixed: slightly stronger retail sales but ongoing manufacturing weakness. The Yuan remains under pressure amid concerns over growth and trade dynamics.

• Middle East Tensions
  The recent escalation between Iran and Israel caused a short-lived spike in oil prices and lifted safe-haven demand for the Japanese Yen and US Dollar. Any further developments could have an outsized effect on commodity-linked FX pairs and risk appetite.

• US-China Trade Relations
  The next round of US–China economic talks is scheduled for this week, with tariff rollbacks and tech access on the agenda. Positive news could support risk-sensitive currencies like AUD and NZD, while a breakdown could trigger broad risk-off sentiment.

With swings in foreign exchange markets continuing, clients should be proactive in managing exposure.
Whether you're a business importing from the US or Europe, or a high-net-worth individual with an upcoming overseas purchase, locking in a favourable rate could protect against sudden currency moves.

August Exchange can help you implement the right mix of spot, forward, and market orders tailored to your timeline and FX risk profile. Don’t let uncertainty derail your plans, speak to our experts today.

The Swiss Franc (CHF) is one of the few currencies still backed in part by gold reserves. Until 2000, it was legally required that at least 40% of the Franc's value be backed by gold, making it historically one of the world’s most trusted safe-haven currencies.