FX markets open the second half of 2025 with a busy calendar of economic data, interest rate speculation, and ongoing political uncertainty in key regions. This week’s releases could provide fresh insights into central bank policy paths and influence FX market direction for Q3.
UK: GDP Growth & Housing Market in Focus
Following last week’s softer inflation print, market attention turns to signs of economic resilience:
- Monday: Nationwide House Price Index. Any unexpected decline could weigh on consumer confidence and pressure GBP.
- Tuesday: Final Q1 GDP results. Upward revisions might support sterling, while weaker numbers would heighten concerns about UK growth prospects.
- Thursday: BoE Consumer Credit and Mortgage Approvals data, offering further clues on domestic demand.
📉 GBP Impact: The pound may face cautious trading this week. A dovish GDP or weak housing data could add pressure on sterling.
US: ISM, Jobs, and FOMC Minutes
Dollar traders face a full slate of data:
- Monday: ISM Manufacturing PMI.
- Wednesday: FOMC Meeting Minutes from June’s policy meeting.
- Thursday: ISM Services PMI.
- Friday: Non-Farm Payrolls headline release, with expectations now at approximately +110k, indicating a potentially cooling US labor market. Wage growth and labor force participation will be closely monitored.
📈 USD Impact: Softer payroll growth may ease expectations for further Fed tightening or accelerate rate cut speculation, weighing on the dollar. However, robust ISM readings could offer some support.
Eurozone: Inflation & Political Risks in Focus
Key inflation data and political developments keep traders on alert:
- Monday: German CPI flash estimate.
- Tuesday: Eurozone CPI flash estimate.
- Wednesday: Eurozone Unemployment Rate.
- Thursday: ECB Monetary Policy Meeting Minutes release.
📊 EUR Impact: Weaker-than-expected CPI could fuel expectations of further ECB easing, especially if inflation continues trending below target. Meanwhile, political instability in France adds another layer of risk, one that may deter euro strength and heighten volatility across EUR crosses.
Other G10 Currencies & Global Themes
- Japan: Q2 Tankan Manufacturing Index on Monday, followed by household spending and labor data later in the week to gauge domestic momentum.
- Australia: No major data releases after last week’s steady interest rate decision; AUD likely to remain sensitive to risk sentiment and commodity prices.
- Canada: May Building Permits and Trade Balance releases due this week; oil price trends remain key for the CAD.
- China: Caixin Manufacturing PMI on Monday, offering a private-sector gauge after softer official PMI figures last week, potentially influencing CNY crosses.
Geopolitical Watch
- US political landscape: President Trump’s administration is under close watch for tax reform and trade policy developments, with markets assessing potential impacts on USD and Fed policy.
- Middle East tensions persist, disrupting shipping lanes and influencing commodity-linked currencies.
- French politics: The recent legislative vote has stirred bond market jitters, affecting euro sentiment.
Currency Exchange Strategy
Managing FX risk is crucial amid this uncertainty:
- A UK-based tech firm expecting EUR payments might consider setting up rolling forward contracts to hedge against euro volatility.
- A US importer could benefit from spot purchases earlier in the week, before Friday’s payroll release adds market risk.
- An expat sending funds from Japan to the UK may split transactions around the Tankan index and UK data releases to reduce exposure to sudden moves.
At August Exchange, we assist you in planning currency exchanges with precision, balancing risk and flexibility to optimise your outcomes.
Did You Know?
The world’s smallest currency in physical size was the Vietnamese đồng coin, once so light it could float in water.
