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

Live information checked on 24 August 2026. The main focus this week is US PCE inflation, Jackson Hole, Australian CPI, Japanese inflation and Canadian GDP.

What Matters Most

The US dollar remains under pressure, but this week should provide an important test of whether the weakness can continue.

Danske Bank describes the recent move as temporary USD weakness and still expects the dollar to recover over the medium term. Lloyds Bank is focused on uncertainty around Fed policy and the Treasury market, while Scotiabank warns that markets may be underestimating the risk of persistent US inflation.

That puts US PCE inflation and Fed Chair Kevin Warsh’s Jackson Hole speech firmly in focus. EURUSD, GBPUSD and AUDUSD remain supported, but all three have rallied strongly and would be vulnerable if Fed rate expectations move higher again.

Canada is another major focus after Canada-US trade talks collapsed over the weekend. The immediate news is negative for CAD, but Scotiabank argues that the broader economic impact remains manageable and expects Canadian growth to remain relatively strong.

USD

The US dollar remains under pressure as softer economic data and lower expectations for further Fed tightening weigh on the currency.

Danske Bank calls the move “temporary USD weakness.” It says softer US data have reduced Fed hike expectations, but it still expects another increase later this year. Danske believes relative US growth, monetary policy and elevated energy prices should eventually support a dollar recovery.

Lloyds Bank is focused on uncertainty around Fed policy and the Treasury market. The US Treasury’s decision to increase purchases of long-dated government bonds initially pushed yields and the dollar lower, helping EURUSD move above 1.17 and GBPUSD above 1.36.

Scotiabank warns that markets may have moved too far in reducing Fed tightening expectations. It expects core PCE inflation this week to remain firm and believes another strong inflation result could bring Fed hawks back into the discussion.

Bias: Mildly bearish. The short-term trend remains against the dollar, but PCE inflation and Jackson Hole create a meaningful risk of a sharp reversal.

EURUSD

EURUSD remains supported by broad US dollar weakness and a relatively firm European rate outlook.

Danske Bank notes that a September ECB increase is almost fully priced. European activity data have also improved, with the latest flash PMIs showing stronger momentum.

Commerzbank has highlighted the improvement in Eurozone manufacturing, adding to evidence that European activity may be recovering.

Danske Bank nevertheless remains bearish over the medium term and continues to target EURUSD at 1.12 over 12 months. It expects relative growth, monetary policy and elevated European energy costs eventually to favour the dollar again.

Scotiabank says French and Spanish inflation figures this week will provide an early indication of the wider Eurozone inflation picture. High oil and gas prices keep upside inflation risks in focus and support expectations for further ECB tightening.

Bias: Mildly bullish short term. The current trend remains positive, but the pair is increasingly sensitive to any rebound in US inflation or Fed expectations.

GBPUSD

Sterling remains supported by resilient UK economic activity and a Bank of England that has little reason to rush into a policy change.

Lloyds Bank notes that the August UK Composite PMI increased to 52.5, services activity reached a six-month high and consumer confidence improved. UK GDP also expanded 0.4% in the second quarter.

Headline inflation increased to 2.9% in July and Lloyds expects it to average above 3% during the second half of the year. However, core inflation remains more contained, wage growth is moderate and labour demand continues to soften.

Lloyds therefore believes the Bank of England can wait for more evidence before changing policy. That combination of resilient activity and patient monetary policy remains supportive for sterling.

Bias: Mildly bullish. GBPUSD remains supported while USD sentiment stays weak, although the strong recent rally leaves sterling vulnerable to a dollar rebound.

USDJPY

USDJPY remains caught between high US yields and growing expectations for tighter Japanese monetary policy.

Danske Bank notes that the yen staged a sharp intervention-driven recovery before giving back part of the move. Intervention alone has struggled to create lasting yen strength.

Scotiabank says Tokyo CPI this week will be closely watched ahead of the Bank of Japan’s September meeting. Markets already expect another BoJ rate increase, while higher import and producer prices suggest inflation pressure remains in the pipeline.

Commerzbank has also highlighted September as a key month for the yen. The difficulty is that high US long-term yields continue to make the carry trade attractive.

The 160 region remains particularly important because another sustained move higher could increase the risk of further official intervention.

Bias: Mildly bearish USDJPY. BoJ tightening expectations and intervention risk should limit upside, although high US yields remain supportive.

AUDUSD

AUD has been one of the stronger G10 currencies during the latest phase of US dollar weakness.

Danske Bank says AUD has been one of the main beneficiaries of the softer dollar alongside NOK. Positive risk sentiment and commodity prices have also helped.

The domestic picture is less clear. Westpac notes that Australian employment fell by 15,800 in July while unemployment rose to 4.5%. Wage growth is also gradually cooling, suggesting the labour market is beginning to develop more slack.

Westpac highlights CPI, the RBA minutes, private capital expenditure and construction data as the main Australian releases this week.

Scotiabank argues that after the softer labour report, the bar for another near-term RBA hike is now high. This makes the CPI release especially important. A hotter result would put tightening back into the discussion, while another soft print could trigger profit-taking in AUD.

Bias: Mildly bullish. Dollar weakness and positive global sentiment remain supportive, but domestic rate expectations are becoming less favourable.

NZDUSD

NZD has also benefited from the weaker US dollar, but its domestic monetary policy outlook is becoming less supportive.

Commerzbank expects the RBNZ to pause at its September meeting despite previously signalling that further rate increases were likely.

Commerzbank points to softer inflation, higher unemployment and limited evidence of second-round price pressure. It still expects another rate increase in October, but believes markets are currently pricing too much tightening.

Westpac highlights second-quarter retail sales and employment indicators this week. Weak consumer activity would strengthen the case for an RBNZ pause.

Bias: Neutral to mildly bearish. Broad USD weakness can support NZDUSD, but softer domestic rate expectations should limit the upside.

USDCAD

The Canadian dollar outlook changed materially over the weekend after Canada-US trade negotiations collapsed.

Scotiabank had expected a possible agreement to reduce the tariff burden and support Canadian growth. Instead, talks ended without a deal and new US tariffs of 50% on around $20 billion of Canadian imports came into effect.

Canada has said it will respond dollar for dollar, with retaliatory measures scheduled for September. That creates a clear short-term risk for CAD.

However, Scotiabank does not believe the dispute automatically becomes a major Canadian macro shock. Its modelling suggests the national growth impact remains manageable, particularly if government support offsets part of the tariff hit.

The underlying Canadian economy also remains relatively firm. Scotiabank expects a strong second-quarter GDP result this week and believes growth could come in well above the Bank of Canada’s previous forecast.

That leaves a mixed setup. Trade uncertainty favours a higher USDCAD in the short term, but strong growth, firm commodity prices and the possibility that negotiations restart should limit the move.

Bias: Mildly bullish USDCAD short term. Trade uncertainty weighs on CAD, but this is not yet a clean bearish Canadian macro story.

Other Pairs

Danske Bank remains relatively positive on NOK in the near term. Higher oil prices and the weaker US dollar have supported the currency, although Danske remains more cautious over the longer term.

CHF remains sensitive to risk sentiment and rate differentials. Danske Bank notes that widening rate differentials had made CHF one of the weaker G10 currencies over the previous month.

Several Asian central bank meetings also take place this week, while China’s industrial profits will provide another read on the regional growth picture. These developments are particularly relevant for AUD and broader risk-sensitive currencies.

Bias Table

Key Event Outlook

United States

US PCE inflation is one of the most important releases this week. Scotiabank expects underlying inflation to remain firm and warns that another strong result could bring expectations for additional Fed tightening back into the market.

The second estimate of second-quarter GDP, durable goods, personal income and spending are also due.

The biggest event is Fed Chair Kevin Warsh’s Jackson Hole speech on Friday. Lloyds Bank says markets will be looking for greater clarity on how the Fed is assessing inflation, growth and financial conditions under Warsh’s changing communication framework.

A hawkish Warsh combined with strong inflation could trigger a significant USD rebound. Soft inflation and a neutral message would reinforce the current bearish dollar trend.

Eurozone

French and Spanish inflation, German IFO, economic confidence and money-supply data are the main European releases.

Scotiabank says the French and Spanish CPI figures will provide an early indication of the broader Eurozone inflation picture. Higher energy costs continue to create upside inflation risk.

Danske Bank notes that a September ECB increase is already almost fully priced. Strong inflation would reinforce that view, while softer price data could remove some support for EURUSD.

United Kingdom

The UK calendar is relatively quiet following last week’s inflation, retail sales and PMI releases.

Lloyds Bank believes the latest numbers point to resilient growth but limited second-round inflation pressure, giving the Bank of England room to wait.

The CBI retail survey and Lloyds Business Barometer are the main scheduled releases. Global USD direction is likely to matter more for GBP this week.

Japan

Tokyo CPI and labour-market data are the key Japanese releases.

Scotiabank says the focus should be on underlying inflation momentum as markets assess the likelihood of another Bank of Japan increase in September.

A stronger inflation result would support the yen and make a sustained move in USDJPY above 160 increasingly difficult.

Australia

Australian CPI is the key local FX event, alongside RBA minutes, second-quarter private capital expenditure and construction work.

Westpac says the recent employment report showed early signs of increasing labour-market slack. Scotiabank argues this has raised the bar for another near-term RBA increase.

A stronger inflation result would put tightening expectations back into the market and support AUD. A soft result could trigger a pullback after AUDUSD’s recent gains.

New Zealand

New Zealand releases second-quarter retail sales and employment indicators.

The data matter because Commerzbank expects the RBNZ to pause in September. Softer activity would strengthen that argument and could pressure NZD.

Canada

Canada is one of the most important markets to watch following the collapse of Canada-US trade negotiations.

Scotiabank says the situation remains fluid and warns against assuming the worst-case outcome. Canada has delayed implementation of retaliatory tariffs until September, leaving time for negotiations to restart.

Canadian second-quarter GDP is the key scheduled release. Scotiabank expects a strong rebound and believes growth could come in well above the Bank of Canada’s previous forecast.

A strong GDP print combined with any sign that trade talks could restart would make chasing USDCAD higher increasingly risky.

Other / Geopolitics

Middle East tensions remain a major cross-market risk. Danske Bank notes that oil briefly approached $100 during the latest US-Iran escalation before falling back toward $90.

Elevated oil prices support currencies such as CAD and NOK but create a more difficult inflation and growth mix for Europe and Japan.

The US Treasury market is another major theme. Lloyds Bank notes that the government has increased purchases of long-dated Treasury securities after long-term yields reached multi-year highs.

If long-end yields continue rising despite those measures, fiscal concerns could create renewed volatility across the US dollar, equities and precious metals.

China’s industrial profits are also due and will be watched closely through the AUD and broader risk-sentiment channel.

Sources

• Danske Bank FX Forecast Update, Weekly Focus and Market Movers, 21 August 2026
• Lloyds Bank Market Insights Weekly, 21 August 2026
• Commerzbank FX and Economic Research, 19-24 August 2026
• Westpac Australia and NZ Weekly and Market Updates, 21-24 August 2026
• Scotiabank Global Week Ahead, 21 August 2026
• Scotiabank Scotia Flash: Canada-US Trade Talks, 23 August 2026
• Marc to Market Week Ahead, 22 August 2026
• Federal Reserve event calendar, August 2026