In August, the RBA cut the cash rate by 25 basis points, to 3.6%. RBA Governor Michele Bullock hinted at further policy easing during the press conference. She stating that the RBA’s 2025 forecasts are assuming a couple more cuts. Notably, the RBA didn’t dismiss the possibility of back-to-back cuts, indicating that board members will assess the data at each meeting.

When do economists expect the RBA to cut rates again?

AMP Head of Investment Strategy and Chief Economist Shane Oliver remarked on the RBA’s Meeting Minutes, stating:

“RBA minutes reiterated dovish guidance, noting the cash rate is ‘still somewhat restrictive’ & ‘some further reduction in the cash rate over the coming year’ is likely required, with reference to the pace being gradual and data determined. We expect cuts in Nov, Feb & May to 2.85%.”

Today’s inflation numbers would have to be significantly lower than in June to pressure the RBA into a September cut.

AUD/USD: Key Scenarios to Watch

• Bearish AUD/USD Scenario: Softer inflation or dovish RBA cues. These factors could drag AUD/USD below the 50-day EMA and bring the 200-day EMA and $0.6450 support level into play.
• Bullish AUD/USD Scenario: Hotter-than-expected inflation or hawkish RBA chatter. These factors could send AUD/USD toward the $0.6550 resistance level, paving the way toward the $0.66 level.

Explore our full AUD/USD analysis, including key trends and trade data, here.

AUD/USD Daily Outlook: Will Fed Speakers Narrow Rate Differentials?

While economists expect a November RBA rate cut, Fed Chair Powell’s hint of a near-term Fed rate cut sent AUD/USD to $0.65.

FOMC members’ support for a September rate cut and further policy easing in Q4 would narrow the US-Aussie rate differential in favor of the Aussie dollar. A narrowing rate differential may drive AUD/USD toward the $0.6550 level. A break above $0.6550 brings $0.66 into sight.

However, rising concerns about inflation over a cooling labor market could signal a less dovish Fed policy stance. Fewer rate cuts may widen the rate differential in favor of the US dollar. A wider differential could push AUD/USD below the 50-day EMA, exposing the 200-day EMA. If breached, $0.6400 would be the next support level.

– Written by


David Woodsmith

STORY LINK Euro to Dollar Forecast: Fed Turmoil Keeps EUR/USD at 1.1625 After Trump Fires Cook

The latest Euro to Dollar (EUR/USD) exchange rate forecast has been jolted by fresh political turmoil after President Trump moved to fire Fed Governor Lisa Cook, reviving concerns over Fed independence.

Despite Friday’s slide on Powell’s dovish Jackson Hole speech, the US Dollar has rebounded, keeping EUR/USD near 1.1625.

ING warns a break below 1.1580 could send the pair towards 1.15, though longer-term forecasts still point to gains back to 1.20.

EUR/USD Forecasts: Trump Fires Fed Governor Cook

After a slide on Friday following Fed Chair Powell’s speech, the dollar recovered ground on Monday.

The US currency dipped again in Asia on Tuesday as President Trump launched another assault on the Federal Reserve, but again bounced from lows with the Euro to Dollar (EUR/USD) exchange rate trading around 1.1625.

According to ING, the Euro is vulnerable to further near-term losses; “a break of support at 1.1580/90 could see follow-through to the 1.1500/1520 area – especially since investors probably added to EUR/USD longs on Friday’s dovish tilt from Powell.”

UoB is less bearish on the single currency; “The sharp decline appears to be running ahead of itself, and EUR is unlikely to weaken much further. Today, we expect EUR to trade in a range of 1.1600/1.1690.”

ING is still bearish on the dollar over the medium term with EUR/USD gains to 1.20.

A key issue will be whether there is durable damage to the dollar amid fears surrounding Fed independence.

Overnight, President Tump stated that he had dismissed Fed Governor Cook as a central bank governor.

According to Trump there was “sufficient reason” to believe Cook had made false statements on mortgage agreements, and cited constitutional powers which he said allowed him to remove her.

The allegations surround declarations of primary property residence.

Cook fought back aggressively; “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so.”

She added; “I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022.”

Mizuho chief strategist Shoki Omori commented; “Powell as of now seems to be fighting back but whoever comes next may just listen to whatever the White House wants. Not looking good.”

According to Vasu Menon, managing director of investment strategy at OCBC; “Trump’s move to fire Lisa Cook will cast a pall on Fed independence and could weigh on the dollar and U.S. Treasuries.”

He added; “However, don’t expect major market moves as Trump’s action is somewhat unprecedented and may be challenged in U.S. courts.”

Charu Chanana, chief investment strategist at Saxo noted; “Markets aren’t panicking, but they are recalibrating, earlier rate cuts look more likely after Cook’s removal.”

She also looked at the wider perspective; “But this isn’t just about rate cuts, it’s about Fed independence and the growing institutional risks in the U.S.”

The Euro has also been hampered by the French government’s decision to call a confidence vote on September 8th.

ING commented; “The numbers don’t look good in that his centrist party has 210 seats in parliament, while the far left and the far right have a combined 330 seats and have already said they will vote no.”

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TAGS: Euro Dollar Forecasts

– Written by


David Woodsmith

STORY LINK Pound-to-Euro Week Ahead Forecast: GBP Set for EUR Drop to 1.12

1. Live rates update:
2. GBP/EUR 1.15767 (-0.06%)
3. GBP/USD 1.34587 (+0.03%)

The Pound to Euro exchange rate (GBP/EUR) outlook has turned increasingly negative after the single currency surged on Powell’s dovish Jackson Hole speech, pushing Sterling back under 1.1550.

Foreign exchange analysts warn the Pound Sterling forecast vs Euro looks increasingly fragile, with some institutions, such as Danske Bank, projecting GBP/EUR could slide to 1.1235 within 12 months.

Mixed UK data, stubborn 3.8% inflation, and doubts over Bank of England policy are keeping Sterling under pressure, while Euro resilience underscores the risk of deeper losses in the GBP/EUR outlook.

GBP/EUR Forecast: UK stagflation Fears

Danske Bank forecasts that the Pound to Euro (GBP/EUR) exchange rate will weaken to 1.1235 on a 6-12-month view.

Wells Fargo expects little GBP/EUR change by the end of 2025.

The Euro surged on Friday after Fed Chair Powell indicated that a September rate cut was likely and the Pound to Euro (GBP/EUR) exchange rate retreated to just below 1.1550.

The latest UK data recorded a better-than-expected figure for government borrowing with an increased tax take following the National Insurance changes.

PMI business confidence data was mixed but did represent a slight positive as stronger growth in the services sector offset another weak performance by the manufacturing sector.

The headline and core inflation rates both increased to 3.8% for July which will cause further difficulties in setting monetary policy.

The Bank of England (BoE) policy debate remains a very live and key issue.

Deutsche Bank commented; “For the hawks a more resilient economy will only raise the bar for further rate cuts this year, until there’s more evidence that underlying inflation is slowing further, and wage settlement data is receding towards more target-consistent levels.”

ING is more confident that the bank will cut again this year; “UK inflation’s up, and markets are becoming increasingly sceptical that the Bank of England will cut rates again this year. But we’re sticking with our view that they will cut again in November by 25 basis points.”

It added; “Although prices are rising strongly, we reckon some of the concerns are overblown. And the BoE will be looking at the deteriorating jobs situation, and that could well influence their decision.”

Danske Bank remains wary over the UK fundamentals; “We increasingly see domestic factors and the relative growth outlook between the UK and the euro area as becoming GBP negatives. This is further amplified by divergence in the fiscal policy outlook with UK fiscal policy set to be tightened in the Autumn.”

UBS pointed to the stagflation risks; “we also note that the UK is already (and has been for some time) in a stagflationary situation. While the latest GDP data was stronger, it’s still well below potential and the labor market has been deteriorating subsequently.”

Danske added; “The key risk to seeing EUR/GBP trade substantially higher than our forecast is a sharp sell-off in global risk and/or renewed focus on the UK’s fragile fiscal position.”

SocGen expects Pound selling on rallies; “As the UK Government prepares to increase taxes, inflation remains persistently higher than in the rest of Europe and growth remains anaemic, short GBP against the rest of Europe is an attractive long, medium and short-term trade.”

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TAGS: Pound Euro Forecasts

• GBP/USD trades below 1.3500 in the European session following Monday’s decline.
• The technical outlook doesn’t yet point to a buildup of bearish momentum.
• A key support level seems to have formed at 1.3430.

GBP/USD lose more than 0.5% on Monday and erased a large portion of the gains it recorded on Friday. After finding support near 1.3430, the pair staged a rebound and was last seen trading above 1.3450.

Safe-haven flows dominated the action in financial markets late Monday and early Tuesday after United States (US) President Donald Trump renewed his threats of imposing tariffs on countries that discriminate against US technology firms. Additionally, Trump said that they will have to charge China “200% tariff or something” if they don’t give them more magnets, referencing to rare earth metals.

In the second half of the day, July Durable Goods Orders and August Consumer Confidence Index data, published by the Conference Board, will be featured in the US economic calendar. The market reaction to these releases are likely to be straightforward and remain short-lived, with positive surprises supporting the USD and vice versa.

Meanwhile, investors will keep a close eye on fresh developments surrounding US President Trump’s feud with Federal Reserve (Fed) Governor Lisa Cook.

Trump announced on Truth Social late Monday that he has fired Fed Governor Cook. In response, Cook released a statement via her attorneys, noting that Trump has no authority to fire her and that she will carry out her duties. If markets grow increasingly concerned over the Fed losing its independence, the USD could come under renewed selling pressure and open the door for a leg higher in GBP/USD.

GBP/USD Technical Analysis

The Relative Strength Index (RSI) indicator stays slightly above 50 and GBP/USD trades above the 100-period and the 200-period Simple Moving Averages (SMAs), reflecting sellers’ hesitancy.

On the upside, 1.3500 (static level, round level, 50-period SMA) aligns as the immediate resistance level before 1.3540 (Fibonacci 61.8% retracement of the latest downtrend) and 1.3600 (static level, round level).

Looking south, support levels could be seen at 1.3460 (Fibonacci 50% retracement, 100-period SMA), 1.3430 (200-period SMA) and 1.3400-1.3390 (static level, Fibonacci 38.2% retracement).

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USD/JPY Technical Analysis

The US dollar initially fell during the trading session on Tuesday, but it has bounced enough to see the 50 day EMA provide support. And it also is now threatening the 200 day EMA. I think we’re in an area here where we’re just killing time. And I think a lot of retail traders are probably stuck because they expected the US dollar to get eviscerated and we basically haven’t seen it fall apart. This is the old adage, the market has already priced it in.

So, with an interest rate cut in September and possibly December, you still have an interest rate differential that favors the US dollar against the Japanese yen, thereby, I believe, putting a bit of a floor in it.

AUD/USD Technical Analysis

The Australian dollar has been slightly positive against the US dollar, but really, this is still a “fade the rally” type of situation. It’s very underwhelming and the 0.6550 level continues to be a major barrier. The 200 day EMA sits just below the 50 day EMA sits right here. We formed a shooting star during the trading session on Monday.

I think you continue to see a lot of lackluster sideways action here, especially this time of year, because most assets are going to be missing volume, and therefore, you have to be very cautious expecting big moves. Short-term back and forth range bound trading is probably where you’re going to be seeing the Australian dollar move.

For a look at all of today’s economic events, check out our economic calendar.