Dollar

USD/CAD, DXY Outlook: The U.S. Dollar Index (DXY) is maintaining a bullish setup, while markets remain in a holding pattern amid developing geopolitical tensions, tariff negotiations, and upcoming key economic reports.

With Trump signaling no plans to fire Fed Chair Powell and showing openness to easing Chinese tariffs if a trade deal is reached, risk-on sentiment slightly returned to the markets. This sparked a more than 3% jump in US indices and a 200-point drop in both Gold and EURUSD. The key question: Are we recharging or reversing?

GBPUSD, USDJPY Outlook: With the US Dollar weakening near the 98-price zone, GBPUSD and USDJPY are trading close to their 2024 highs and lows, respectively. Both pairs are holding ground amid growing indecision—poised for either steep breakouts or sharp reversals. What are the key levels to watch?

The US dollar forecast remains modestly bearish following last week’s big drop, driven largely by the rallying EUR/USD pair on the back of the Germany’s big spending plans.

Friday's data showing strong wages growth and hot inflation expectations, and ongoing expectations of inflationary policies under Donald Trump, means the Fed is likely to remain on pause for a long time. Against this backdrop, the US dollar forecast remains bullish.

NFP leading indicators point to a potentially above-expectation reading in Friday's jobs report - see what it might mean for the US Dollar!

Recent bullish movements in gold have pushed its price up by more than 2% over the past three sessions, reaching a new all-time high zone at $2,800 per ounce.

While one can argue the greenback has made a short-term peak, the overall dollar forecast remains positive, especially against currencies subject to increased tariff risks from Trump’s administration.

The rationale behind the US stock market rally is that Trump is seen as business-friendly and will be able to pass on his tax cuts through easily without much resistance from the democrats who have lost control of the senate.

Meanwhile, most major foreign currencies remain week, further alleviating pressure on the US dollar. The sharp decline in Chinese markets over the last couple of sessions has put some pressure on commodity currencies. Additionally, the RBNZ cut rates by 50 basis points, sending the kiwi lower.

The greenback is likely to remain on the front-foot while geopolitical risks remain elevated and ahead of the US jobs report on Friday. The latter could then determine which direction the greenback will want to take in the near-term, before the focus turns to US presidential election.