Intro
Like the previous week, the forex market did not make spectacular moves. It’s almost the start of a new month, which means Nonfarm Payrolls time for USD followers. Another high-impact news event to consider is the Reserve Bank of Australia (RBA) ‘s interest rate decision.
Most of our sentiment biases remain the same for each currency. Nonetheless, revisit them for the finer details to help you trade smarter.
Market Overview
Here is a brief sentiment report for all major currencies.
US Dollar (DXY): Bearish
The U.S. dollar has been struggling because of uncertain trade policies and slowing economic growth. Inflation remains high, but the Federal Reserve is unlikely to raise interest rates further. Some investors are moving their money into riskier assets, which weakens the dollar.
Key news to watch: Initial Jobless Claims on Thursday and Unemployment Rate/Non Farm Payrolls on Friday.
Euro (EUR): Bullish
The Euro has hit excellent heights of late, supported mainly by Germany’s recent announcement of a €500 billion infrastructure fund, hopes of peace in Ukraine and a relaxation of borrowing limits.
Other bullish drivers for the euro include strong fiscal spending policies from Germany and France, economic resilience in the Eurozone, and a weakening dollar.
Key news to watch: Inflation Rate YoY Flash on Tuesday.
British Pound (GBP): Neutral
GBP has remained relatively stable in 2025. Inflation in the UK is slowing down, and the Bank of England is considering cutting interest rates a few times this year. However, strong wages and good consumer spending keep the pound in a good position.
Japanese Yen (JPY): Bullish
Japan’s inflation rally is fueling rate hike expectations from the Bank of Japan, making the yen more appealing. The safe-haven status of the yen is still drawing in funds amid global uncertainty. Finally, a weakening USD is helping JPY recover against major peers.
In the long term, we should also keep an eye on US Treasury yields – rising yields = lower JPY, while lower yields = higher JPY.
Australian dollar (AUD): Bearish
The Aussie has faced headwinds for several reasons. China’s economy is slowing (along with Australia’s own domestic economy) since China is Australia’s biggest trading partner. Falling commodity prices and concerns over global trade aren’t helping either.
The Reserve Bank of Australia hasn’t raised its interest rate since November 2023 – there is an 84% chance of a hold this Tuesday.
Key news to watch: RBA Interest Rate Decision on Tuesday.
New Zealand dollar (NZD): Bearish
The New Zealand dollar has been holding steady, but there are risks that it could weaken. The country’s central bank has been cutting interest rates since August 2024, which makes the NZD less attractive to investors. New Zealand’s economy is also sluggish, with weaker consumer spending and lower inflation.
Canadian dollar (CAD): Neutral
The CAD has found some stability after recent weakness, supported by oil prices stabilizing and a softer USD (though Trade tensions with the U.S. have created uncertainty).
However, the Bank of Canada (BoC) remains cautious about the economic outlook. They are expected to hold rates steady in the short term before cutting later.
Key news to watch: Unemployment Rate on Friday.
Swiss Franc (CHF): Neutral
The CHF remains a safe-haven currency of choice, holding its value against most major currencies amid global uncertainties. However, the Swiss National Bank (SNB) has eased its stance on monetary policy, which has limited the Swiss franc’s gains.
