The U.S. dollar is regaining strength across the board as markets reprice expectations around the Federal Reserve’s policy path. Despite earlier hopes for aggressive easing, recent U.S. data including stronger labor market prints and resilient core inflation are pushing back the timing and magnitude of Fed rate cuts.

This renewed USD momentum comes as the euro faces growing headwinds. Euro area data remains soft, particularly in Germany and France, where manufacturing and services PMIs continue to underwhelm. Meanwhile, the ECB appears increasingly constrained, with inflation easing faster than in the U.S. and growth risks skewed to the downside. Markets are still pricing in rate cuts by the ECB as early as June.

This growing divergence in economic performance and monetary policy outlooks is reinforcing downside pressure on EUR/USD. Real yield differentials are widening in favor of the dollar, and safe haven flows are also lending support to the greenback in an uncertain macro environment.

Technically, EUR/USD has broken below key support levels, with momentum favoring continuation lower.

Short EURUSD

The latest CPI figures out for Australia surprised to the upside, reinforcing sticky inflation pressures in the domestic economy. Headline inflation remains well above the RBA’s 2–3% target band, and more importantly, core inflation continues to trend higher, signaling underlying demand remains firm.

This reduces the likelihood of a near-term rate cut from the Reserve Bank of Australia. In fact, if price pressures persist, the RBA may be forced to maintain a hawkish bias, or even re-open the door to further tightening. Markets, which had been pricing in cuts later this year, are now re-evaluating that path.

In contrast, the U.S. dollar is under pressure as softer U.S. data and rising expectations for Fed easing weigh on yields. The growing divergence in central bank outlooks RBA staying on hold vs. Fed likely to cut creates a supportive environment for AUD/USD upside

LONG AUDUSD

Description: EUR/CAD may rise amid lower Canadian growth expectations and firm European data.

Buy EURCAD

Description: GBP/NZD strength driven by diverging monetary policy expectations between the UK and New Zealand.

Buy GBPNZD

Description: CAD/JPY may rally as oil prices stabilize, supporting CAD strength versus JPY.

Buy CADJPY

Description: EUR/NZD faces downside risk as New Zealand’s data outperforms European releases.

Sell EURNZD

Description: GBP/CHF upside favored amid reduced global risk aversion and UK policy resilience.

Buy GBPCHF

Description: CHF/JPY may decline as Swiss safe-haven demand fades faster than yen flows.

Sell CHFJPY

Description: AUD/NZD looks vulnerable as New Zealand’s growth outlook stabilizes while Australia faces headwinds.

Sell AUDNZD

Description: EUR/AUD could strengthen on diverging economic momentum between Europe and Australia.

Buy EURAUD

Description: EUR/JPY may decline as Japan benefits from improved trade sentiment and safe-haven inflows.

Sell EURJPY

Description: GBP/AUD faces downside risk amid stronger Australian fundamentals and weaker UK consumer sentiment.

Luca Santos

Luca Santos

May 02 2025

Short EURUSD

Luca Santos

May 02 2025

LONG AUDUSD

Luca Santos

Apr 29 2025

Buy EURCAD

Luca Santos

Apr 29 2025

Buy GBPNZD

Luca Santos

Apr 29 2025

Buy CADJPY

Luca Santos

Apr 29 2025

Sell EURNZD

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Luca Santos

Apr 29 2025

Buy GBPCHF

Luca Santos

Apr 29 2025

Sell CHFJPY

Luca Santos

Apr 29 2025

Sell AUDNZD

Luca Santos

Apr 29 2025

Buy EURAUD

Luca Santos

Apr 29 2025

Sell EURJPY

Luca Santos

Apr 29 2025

Sell GBPAUD