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

USD

The US dollar starts the week firm as higher oil prices, rising geopolitical risk, and a cautious Federal Reserve keep demand for safe-haven assets elevated. Barclays, Lloyds Bank, and Marc to Market all highlight that the Middle East conflict has pushed markets to reprice inflation risk higher, while the US still looks relatively insulated versus Europe and parts of Asia.

Westpac notes that the dollar has been supported by both risk-off flows and a higher US yield backdrop. CBA makes a similar point, arguing that tighter financial conditions and elevated energy prices are helping the USD hold its ground even as parts of the US growth story soften. For traders, the message is simple: unless oil falls sharply or risk appetite improves, dips in the dollar may stay shallow.

EURUSD

EURUSD remains under pressure because the euro area is one of the clearest losers from another energy shock. Danske Bank expects the ECB to leave rates unchanged, but says President Lagarde is likely to stress upside inflation risks while also acknowledging weaker growth and high uncertainty. The bank still expects no ECB rate change in its base case, though it admits the risk of a hawkish shift has risen.

Lloyds Bank also expects the ECB to hold, with the focus on how it frames the oil shock and whether it signals readiness to react if inflation expectations start to drift. Barclays and Marc to Market both note that the euro is being hit by the mix of expensive energy, weaker growth momentum, and stronger dollar demand. For traders, this keeps the near-term bias lower unless tensions ease or the ECB turns materially more hawkish than expected.

GBPUSD

Sterling faces the same broad problem as the euro, but with a slightly more mixed domestic story. Danske Bank expects the Bank of England to keep Bank Rate at 3.75% and argues the current repricing toward hikes may be too aggressive. It still expects the BoE to cut later in the cycle once there is more clarity on how persistent the energy shock really is.

Lloyds Bank also expects a BoE hold and says policymakers are likely to stay in wait-and-see mode while inflation risk rises and labour market conditions continue to cool. Westpac points out that sterling has already started to weaken with the broader USD move. For traders, GBPUSD looks vulnerable if UK data stays soft and the BoE refuses to validate the market’s more hawkish pricing.

USDJPY

USDJPY remains one of the key pairs this week because it sits at the centre of both rate differentials and intervention risk. Marc to Market notes that dollar-yen is back near levels that previously triggered official concern, while the broader move is still being driven by higher US yields and safe-haven demand for dollars. Danske Bank says yen weakness has been amplified by Japan’s exposure to imported energy costs.

The InvestingLive article adds an important layer, highlighting warnings from Japan and South Korea on excessive FX volatility and the risk of coordinated pushback if moves become disorderly. That means the upside in USDJPY may continue, but it is less clean than in other USD pairs. For traders, the bias is still up, but intervention headlines now matter much more.

AUDUSD

AUDUSD is being pulled in two directions. On one hand, higher commodity prices and the prospect of another RBA hike should be supportive. Westpac expects the RBA to raise rates by 25bp and says the Bank remains concerned about inflation persistence and limited spare capacity. BNZ also notes that Australia is the only major G10 central bank widely expected to tighten this week.

On the other hand, risk aversion and a stronger USD are offsetting much of that support. Westpac’s Morning Report shows the Aussie dropped sharply late last week even with rate hike expectations still firm. CBA also flags China and broader global risk sentiment as key swing factors. For traders, AUDUSD may outperform other risk currencies on relative policy support, but it still struggles to break higher while the USD remains bid.

NZDUSD

NZDUSD looks more fragile than AUDUSD because New Zealand is more exposed to the downside from a global growth hit and has less policy support in the near term. BNZ says the New Zealand economy is entering this shock from a weak starting point, with growth still soft and inflation already uncomfortable. It warns that each day the Strait of Hormuz remains closed deepens the downside risk for the NZD.

Westpac expects the RBNZ to stay on hold for now, even as inflation rises, because tighter policy would worsen the growth slowdown once the oil shock fades. That leaves NZD vulnerable to both risk-off sentiment and a widening policy gap with Australia. For traders, NZDUSD remains one of the clearest downside expressions if geopolitical stress persists.

USDCAD

USDCAD is more balanced than most USD pairs because Canada benefits from higher oil prices, even as the US dollar gains from safe-haven demand. Marc to Market argues the Canadian dollar should be understood more through its relationship with the broader USD cycle than as a pure petrocurrency, which helps explain why it has been relatively stable compared with other G10 currencies.

Westpac and Lloyds Bank both note that higher crude prices offer some support to CAD, but they do not fully offset tighter financial conditions and broader USD demand. That leaves USDCAD trading more as a range pair than a trend pair for now. For traders, oil remains the key stabiliser, but the bias still leans mildly higher while the dollar stays strong.

Other Pairs

Outside the core pairs, banks continue to flag weakness in energy-importing currencies and rising sensitivity in Asian FX. Danske Bank points to euro and yen vulnerability as the cleanest reflection of the oil shock. The intervention story in Japan and South Korea is also becoming more relevant for regional FX sentiment.

Crosses such as EUR/GBP may become more active if the BoE repricing reverses faster than ECB pricing. Danske Bank explicitly says it sees scope for EUR/GBP to move higher if the market walks back aggressive BoE expectations. That cross is worth watching if UK data stays soft.

Bias Table

Key Event Outlook

United States

The FOMC meeting on Wednesday is the main event. Banks broadly expect no change in rates, but the message matters more than the decision. Traders will focus on how Chair Powell frames the oil shock, inflation risk, and whether the Fed still sees room to cut later this year. US PPI and industrial production will also help shape the rates and USD reaction.

Eurozone

The ECB is expected to hold on Thursday. The key issue is whether Lagarde leans harder into upside inflation risks or keeps the focus on uncertainty and weaker growth. Final CPI, trade data, and the tone around energy scenarios will be important for EUR and European yields.

United Kingdom

The UK labour market report and the BoE decision both land on Thursday. Softer wage growth and a higher unemployment rate would reinforce the view that the UK economy remains fragile. That matters because GBP needs either better growth or a clearly hawkish BoE to resist broad USD strength.

Japan

The BoJ is expected to hold, but USDJPY is the real story. Traders will watch for any hint that policymakers are more worried about inflation from imported energy, or more worried about growth. At the same time, intervention rhetoric remains a major risk if dollar-yen pushes further into sensitive territory.

Australia

The RBA decision is likely to be the only major G10 move this week. A hike and firm guidance would support AUD on the crosses, especially against NZD. Australian jobs data later in the week will then test whether the labour market remains tight enough to justify that view.

New Zealand

New Zealand GDP, the current account, and monthly price indicators all matter, but banks agree these releases are now being viewed through the lens of the Middle East shock. The key question is how weak the starting point was before oil and transport costs rose further. That matters for the NZD and for April RBNZ expectations.

Canada

Canada’s CPI and the Bank of Canada decision are the main events. Markets expect the BoC to hold. Oil remains the biggest CAD driver, but inflation data can still move local yields and shape the balance between domestic support and broader USD pressure.

Other / Geopolitics

The Middle East remains the dominant macro driver. Oil, shipping disruption, and any change in the status of the Strait of Hormuz will keep driving FX, rates, and risk sentiment. For now, the market is trading a simple script: firmer oil, firmer USD, weaker growth-sensitive currencies, and higher volatility around central bank events.