Currency pair of the week

With both the BoE and FOMC rate decisions to come, the GBP/USD forecast is subject to increased volatility, making the cable the currency pair of the week for us.

It has been a decidedly subdued open to Monday’s session, but things will pick up as the week unfolds. US‑China envoys are meeting in London for the first time since the two sides stopped all trade talks.

We maintain a bearish USD/JPY outlook and reckon an eventual break below the 140.00 is likely. A mix of risk aversion amid trade war uncertainty and fiscal concerns creates an ideal environment for the yen to prosper.

The US dollar has had a decent day so far today, especially against the Japanese yen. But it was higher event against the commodity dollars despite a sharp improvement in risk appetite.

EUR/USD forecast boosted as Moody’s downgrade rekindles the 'Sell America' theme. Dollar come under pressure despite rising yields, as the EUR/USD attempts to breakout from a bullish continuation pattern.

It will be a busy week for the cable with key data from both sides of the pond to come. For the GBP/USD forecast to turn decisively negative, US dollar will now have to improve markedly to prevent the Fed from cutting rates meaningfully this year.

While the EUR/USD forecast is far from bearish, the loss of strong bullish momentum points to a period of consolidation or a bit of retracement ahead of a busy week.

The EUR/USD forecast is turning bearish amid investor fears and market realisation that tariffs may be here to stay as Trump digs in, telling reporters that "sometimes you have to take medicine to fix something.

The US dollar was on the back foot in the first half of Wednesday’s session as the trade war enters a critical phase. Trump’s reciprocal tariffs day finally arrives later on, with risk sentiment remaining fragile following a bruising few weeks for global markets, especially Wall Street.

Despite a weaker start to the new week, the EUR/USD forecast remains bullish in our view in light for Germany’s historic spending shift that was approved last week.

In the US, weakening data and trade uncertainty has undermined the dollar, while over in Europe, attention has been on fiscal stimulus measures and defence spending commitments from Germany. Against this backdrop, it is difficult to be bearish on the EUR/USD forecast.