August Exchange FX Market Outlook - 23/06/2025

We head into the final full week of June with plenty for currency markets to digest. As global money transfers remain sensitive to rate and risk expectations, upcoming data and central bank tone are likely to drive fresh moves across major and commodity currencies alike.

• Wednesday – CPI: Markets are watching closely for signs that UK inflation is returning to target. If not, it could delay the Bank of England's path to easing.

• Friday – Retail Sales: A real-time pulse check on the UK consumer. Weak figures here could add downside pressure to the pound.

📉 Impact on GBP: If inflation remains elevated and consumer demand slips, GBP pairs may struggle through the week. EUR/GBP and GBP/USD will be key ones to watch.

• Thursday – GDP (Final Q1): Market consensus expects a minor revision downwards. Traders will be sensitive to any deviation.

• Friday – Core PCE: The Fed's preferred inflation measure. With markets already pricing rate cuts into Q3, this data could make or break the timeline.

📈 Impact on USD: Strong inflation may strengthen the greenback short term, while softness could reignite rate cut chatter and weigh on USD.

• Thursday – German Ifo Business Climate: Markets will look to this to gauge whether confidence is picking up after the ECB’s rate cut.

• Friday – Eurozone Economic Sentiment: Broader regional mood could determine how resilient the euro remains against other majors.

📊 Impact on EUR: Without much hard data, investor sentiment and bond spreads may carry more weight this week.

• 🇨🇦 CAD: Canadian CPI on Tuesday could re-shape expectations for the Bank of Canada. Oil prices will also be key.

• 🇦🇺 AUD: Aussie CPI out Wednesday. Traders will be watching whether inflationary pressure justifies a shift in tone from the RBA.

• 🇯🇵 JPY: Japanese CPI lands Thursday. If inflation holds up, it could provide some respite to the yen, particularly against a firming dollar.

• Global political noise continues to play a role. Discussions between major powers are ongoing, with trade cooperation and defence funding back in the headlines.

• Market sensitivity to geopolitical events, from the Middle East to Asia-Pacific, remains high, supporting safe-haven currencies like USD and JPY during any risk-off moves.

FX volatility remains a defining theme of 2025, and forward-thinking currency planning continues to be essential for both individuals and corporates. At August Exchange, we help clients develop tailored strategies that not only protect against risk but also take advantage of favourable market conditions.

For example, a UK-based importer purchasing goods from the US might face significant cost increases if GBP/USD declines. By using a forward contract, they can lock in today’s rate for delivery in three months, providing clarity on cost and protecting margins.

Alternatively, a property buyer in Spain planning to complete in September might choose a market order strategy, allowing them to target an improved EUR/GBP rate over the coming weeks. If the market reaches their target, the transaction executes automatically, removing the need to monitor rates daily.

We also help e-commerce businesses receiving revenue in USD or EUR determine when to convert profits back to GBP. Through a combination of spot deals and scheduled monthly conversions, businesses can reduce exposure to market swings and improve predictability in cash flow forecasting.

Whether you’re hedging foreign receivables, planning an overseas purchase, or managing multi-currency payroll, we build currency exchange strategies that are data-driven and tailored to your timing, budget, and risk tolerance.

Speak to August Exchange today to take the guesswork out of your FX decisions.

Get in touch with our team today on 02046004888.

Around 90% of forex market transactions are speculative, meaning they're driven by bets on currency movements rather than actual trade needs