Forex news

AUD/USD and the ASX 200 have flourished this week thanks to renewed bets of Fed cuts, even though softer employment and wages data for Australia rekindled hopes of a lower RBA cash rate.

The USD/CAD was back at the point of origin of Wednesday’s breakdown at 1.3630-1.3650 area. Could we see the Loonie head lower from here? This week’s disappointing US data certainly point to a dimmer USD/CAD outlook.

Despite the slow start to today’s session, the recent price action and improving eurozone sentiment suggests the EUR/USD outlook remains positive, with the exchange rate on course to potentially head towards the 1.10 handle.

The US dollar suffered its worst day of the year and Fed fund futures now imply with near certainty that the Fed will cut by September. And that saw AUD/USD breakout in style and USD/JPY roll over, breaking below two handles on Wednesday.

The 1-2 combination of soft CPI and retail sales has driven EUR/USD higher and sent the DAX to fresh record highs.

The US dollar continued to weaken ahead of today's US CPI report, helping EUR/USD and AUD/USD move towards key resistance levels. Yet traders will require a soft set of inflation figures for the pairs to stand any chance of breaking resistance.

The USD was weaker despite higher producer prices, as traders placed greater emphasis on last month's figures being revised lower. And that now sees a 51% chance of a September Fed cut, according to Fed Fund futures.

With asset managers and large speculators trimming long and short exposure to yen futures, their appetite to speculate on the currency appears to be waning after BOJ interventions.

GBP/USD slipped last week on a moderately dovish BOE – what should traders be watching this week?

Investors will be looking forward to the release of Consumer Price Index (CPI) on Wednesday, which is going to be the next big catalyst for the dollar and markets in general. The USD/JPY outlook could change dramatically should Japan intervene again.

Welcome to another edition of Forex Friday, a weekly report in which we highlight selected currency themes. In this week’s report, we will discuss the British pound, US dollar and look ahead to the next week.

The US dollar snapped its 3-day winning streak and formed a bearish outside day, helping gold reach our upside target. EUR/USD and AUD/USD are now eyeing a move towards key resistance levels.

EUR/USD is consolidating, but optimism about falling interest rates and solid corporate performance has boosted the DAX to record highs above 18,600.

The big question for today is if the BOE will satisfy bearish market positioning with enough dovish talk to prevent shorts from covering, and inadvertently sending GBP/USD higher.

The US dollar may have risen for a third day, yet bulls lack the conviction that bears displayed last week. And that suggests this bounce could be corrective.

GBP/USD forecast: All eyes on BoE policy decision, before attention turns to UoM consumer sentiment and inflation expectations data on Friday, before CPI data next week.