Weekly FX Report Summary

Bank FX views in one page, covering the key drivers, clear bias by pair, and the week’s events that move markets.

USD

Banks are split on the dollar. Near term, softer risk appetite, tariffs, and sticky core inflation keep USD supported, with Fed speakers leaning to a 25 bp cut in September rather than 50 bp. Medium term, most expect the USD to slip as policy eases and institutional uncertainty lingers. Positioning and options skew still lean to USD downside. Tactically, the dollar may hold a bid into payrolls, but softer data risks a renewed down-leg.

EURUSD

EUR is range bound despite French political noise. ECB inflation expectations are steady, while 2-year spreads vs the US tilt mildly in Europe’s favor. Some desks caution that higher real yields in Europe reflect debt concerns rather than stronger growth. Others see improving EU-US trade tone as a modest tailwind. Overall tone is constructive medium term, but political risk tempers near-term upside.

GBPUSD

GBP underperforms on fiscal worries and chatter about revenue-raising measures. Services inflation is sticky, which limits how fast the BoE can ease, even as the labor market cools. Consensus bias is for GBP to lag peers into the autumn budget cycle. Expect choppy trading around policy headlines and the November BoE meeting.

USDJPY

Spot is steady, but banks are turning more bullish JPY. Tokyo CPI remains firm and BoJ confidence in wage gains is improving, keeping an October hike in view. With US-Japan spreads narrowing on expected Fed cuts, risk is for USDJPY to grind lower if US data underwhelms.

AUDUSD

AUD holds up better than peers. Private credit strength and resilient commodities help offset China softness. Banks flag sensitivity to China PMIs and any stimulus hints. Base case is neutral to mildly bullish with a contained range near term.

NZDUSD

NZD shows relative resilience as fair value improves and terms of trade stay supportive. RBNZ remains cautious given sticky inflation. Positioning is light, so squeezes are possible on positive risk tone.

USDCAD

CAD outperformed last week even after weak Q2 GDP. Narrower US-Canada spreads and modest commodity gains lifted CAD fair value. Banks prefer fading USD rallies above 1.38, with a 1.36–1.39 week-ahead range and risks skewed to CAD strength if US payrolls disappoint. Canadian jobs data on Friday is the key local catalyst.

Other Pairs

CHF was not a major focus. NOK and SEK were steadier but capped by softer oil. MXN traded defensively within its range as EM FX contends with tariff and growth headlines.

Bias Table

Key Event Outlook

United States

• Nonfarm payrolls, unemployment rate, wages: Soft prints would cement a 25 bp cut in September and could revive talk of a larger first move. USD and yields sensitive.
• ISM Manufacturing and Services, JOLTS, ADP, Beige Book: Additional signs of slowing momentum would support USD downside into FOMC.
• Policy backdrop: Tariff moves and the Fed independence debate remain key market risks.

Eurozone

• Flash HICP: In-line prints keep ECB steady. Upside surprises lift EUR only modestly while OAT spreads remain the swing factor.
• France confidence vote risk: Wider spreads would limit EUR upside even if data stabilizes.

United Kingdom

• Fiscal policy watch: Headlines on taxation and the autumn budget path dominate GBP. BoE easing remains gradual with services inflation sticky.

Japan

• Inflation and wages: Tokyo CPI firm and wage momentum keep October hike in view. USDJPY sensitive to US yield direction.

Australia

• China PMIs and stimulus chatter: Primary drivers for AUD. RBA minutes unlikely to shift the near-term path.

New Zealand

• Inflation and trade updates: Feed the RBNZ view. Neutral near-term stance keeps NZD tied to global risk tone.

Canada

• Employment report: The week’s domestic swing factor for CAD. Trade data is the warm-up.

Other and Geopolitics

• Oil supply and OPEC: Survey-based increases point to a looser H2 balance, limiting energy-linked FX upside.
• US-China trade and broader geopolitical risk: Headline risk remains high across EM FX.

Bank Desk Weekly FX Report

What the banks are saying, the fundamental bias, and key events.

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