US Dollar (USD)
- Rangebound with opposing drivers: Fed cuts argue for weakness, strong US equities attract inflows.
-
Likely stays contained in near term, with weakness emerging later in Q4.
Euro (EUR)
-
Lack of investment appeal so far; equities and rates underperformed US.
-
German stimulus and Fed cuts vs ECB pause could support EUR/USD.
-
Risks both ways, but skew is mildly positive.
Japanese Yen (JPY)
-
RBC maintains bullish call; USD/JPY expected below 140 by year-end.
-
Recent weakness blamed on July-specific factors (elections, tariffs, carry).
-
Rate differentials moving in JPY’s favor, BOJ steady, Fed easing.
Sterling (GBP)
-
Undervalued vs EUR, SEK, CHF; GBP/CHF has strongest short-term upside.
-
BoE cautious on cuts; one more cut expected this year.
-
Attractive for carry, especially vs CHF; limited US tariff exposure helps.
Swiss Franc (CHF)
-
Weakness delayed as SNB cautious on negative rates.
-
Inflation weak but edging up; tariffs from US a big risk (39% on exports).
-
Vulnerable to bouts of weakness near term.
Canadian Dollar (CAD)
-
USD/CAD stuck in 1.3550–1.3900 range; RBC keeps 1.38 Q3 target.
-
Rallies above 1.38 seen as selling opportunities.
-
Only big Fed or BoC surprises could break the range.
Australian Dollar (AUD)
-
Forecasts revised higher; AUD/USD to 0.64 end-2025.
-
Supported by USD weakness, easing US-China trade tensions, and firm commodity prices.
New Zealand Dollar (NZD)
-
Underperforming; forecast revised to 0.58 end-2025.
-
Weak economy and rising unemployment weigh, despite high rates.
-
Agriculture sector benefits from weaker currency.
This article was written by Arno V Venter at investinglive.com.