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

The Fed is set to cut rates this week, with most banks expecting 25bp but some flagging risk of 50bp given soft labour data and downward revisions. Inflation is sticky but secondary to employment and tariffs. Trump’s political pressure on the Fed is noted as a risk to independence. Tactically, USD is prone to short squeezes on hawkish dots, but structurally softer growth and easing should cap rallies.

EURUSD

The ECB held steady, striking a neutral stance. Growth remains weak but not collapsing, inflation forecasts drift near target, and France’s downgrade adds political noise but no market shock. Correlations show EURUSD remains tied to US yields. Banks see scope to push toward 1.18 if Fed easing deepens.

GBPUSD

The BoE is expected to hold at 4.0%. UK activity is sluggish, wages are easing, but inflation expectations remain high near 3.8%. The BoE is not in a hurry to cut. GBP trades mostly as a USD proxy with risk skewed to guidance tone at Thursday’s meeting.

USDJPY

JPY remains weak, hit by wide rate spreads and political instability after PM Ishiba’s resignation. BoJ is seen on hold, with a hike delayed into 2026 unless yen depreciation accelerates. Positioning is heavily short JPY; intervention risk lingers if USDJPY breaks higher. Banks advise buying dips while spreads remain wide.

AUDUSD

AUD has stalled near highs. Domestic data is mixed; unemployment steady but RBA still leaning to further easing later this year. AUD remains highly inverse to the USD and sensitive to US 2-year yields. China data and commodities provide balance. Best framed as range-trading with support near 0.6590–0.6600.

NZDUSD

NZD benefits from record terms of trade, dairy strength, and a narrowing external deficit. However, Q2 GDP is likely negative due to seasonality. RBNZ is easing gradually toward neutral. NZDUSD likely follows USD path; banks favour dip buys toward 0.59 with topside capped near 0.6050 in the short run.

USDCAD

CAD is weak after poor jobs data, with BoC expected to cut alongside Fed. CPI remains sticky near 3%, creating two-way risk. USDCAD trades rich relative to fair value, capped near 1.3940–1.40 with support around 1.3780. Oil at $62 provides little relief. Tactical range trade remains favoured.

Other Pairs

• NOK/SEK: Norges Bank likely cuts 25bp. Sweden showing tentative recovery signs.
• CHF: Quiet, EURCHF steady despite French downgrade.
• EM FX: MXN and BRL supported by softer USD and high carry, though positioning crowded. TRY and ZAR volatile with politics.

Bias Table

Key Event Outlook

United States

FOMC expected to cut 25bp; risk of 50bp. Watch dots, Powell’s tone, and QT discussion. Retail sales, IP, jobless claims add colour. USD trades first whipsaw then trend after press conference.

Eurozone

Final HICP and Lagarde speeches after steady ECB. France downgrade noted but contained. Industrial output soft. EUR follows US yield path.

United Kingdom

BoE meeting (18 Sept) expected unchanged at 4.0%. Ahead: labour, CPI, and retail sales. GBP impact tied to guidance tone.

Japan

BoJ meeting (19 Sept) expected on hold. CPI slowing but above 3%. Ueda’s tone on wages/inflation watched. Intervention chatter if USDJPY extends higher.

Australia

Employment data (18 Sept) likely steady to soft. RBA easing later, not now. AUD path dictated by USD yields and China data.

New Zealand

Q2 GDP (18 Sept) likely contracts due to seasonal effects. Current account (17 Sept) narrower. RBNZ cuts priced for Oct/Nov.

Canada

BoC meeting (17 Sept) expected to cut 25bp to 2.5%. CPI steady near 3%. Retail sales (19 Sept) add direction. USDCAD capped 1.39–1.40.

Other / Geopolitics

Norges Bank seen cutting. China releases August retail sales, IP, FAI. Global tariff risks remain. Middle East ceasefire and Ukraine peace talks fragile.