Published: 9/24/2025

Overall Market Sentiment: Cautious. Traders lean toward an October Fed cut while waiting for Friday’s U.S. Core PCE. Equities softened in Asia and U.S. futures are heavy. The dollar index is range-bound as Treasury yields hold steady into data.

Currency Outlooks

🔺 USD: Fed funds futures imply a very high chance of a cut on Oct 28-29, and markets watch Core PCE on Fri Sep 26 for confirmation. Consensus for core is about 0.2% m-m and ~2.9% y-y. The curve is modestly positive, with 2-year around 3.6% and 10-year near 4.1-4.2, which trims the carry edge versus low yielders. Tactical setup: a 0.3% core print, paired with firm durables on Thu, likely lifts USD. Technical context: DXY 97.2-97.8 range, first breakout zone above ~97.9.

🔺 EUR: Flash PMIs are mixed, with Germany back in expansion and France deeper in contraction. The ECB held in September and kept DF 2.00%, MRO 2.15%, MLF 2.40, so policy divergence versus the Fed narrows if the U.S. eases again. Watch today’s Ifo for Germany’s pulse. EURUSD support 1.1760-1.1780, resistance 1.1840-1.1900, with upside favored on soft U.S. data.

⚖️ GBP: The BoE held at 4.0% with a 7-2 vote and slowed QT to £70bn over the next 12 months, modestly easing gilt supply pressure. UK CPI was 3.8% y-y in August. Cable is sensitive to U.S. data this week. Range 1.3450-1.3650 unless PCE surprises hot.

🔻 CAD: The BoC cut 25 bp to 2.50% on Sep 17 and kept an easing bias. Oil has rebounded toward the high-$60s, but spreads still lean against CAD. Near-term focus 1.3735 support and 1.3850 resistance as crude hovers near $68. Next BoC is Oct 29.

🔻 JPY: The BoJ held the policy rate at 0.5% and will sell ETFs at ~¥330bn per year and J-REITs at ~¥5bn per year, a measured step toward balance-sheet normalization. USDJPY remains heavy near 149 where intervention risk rises. Range 146.0-149.5 into U.S. data.

⚖️ AUD: Australia’s monthly CPI rose to 3.0% y-y in August, while trimmed mean eased to 2.6% y-y. Markets pared November cut odds, and the RBA on Sep 30 is seen on hold. AUDUSD trades near 0.66, with 0.6580 support and 0.6660 resistance, tracking global risk and the U.S. data path.

Day and Week Ahead

• Thu Sep 25: U.S. Durable Goods for August and Q2 GDP third estimate. A firm capex signal would challenge the easing narrative.
• Fri Sep 26: U.S. Personal Income and Outlays with Core PCE. Consensus ~0.2% m-m, ~2.9% y-y. A downside miss would extend USD softness.
• Thu Sep 25: SNB policy decision. Markets lean to hold at 0.00%.

🪙 Gold: Near record highs around $3,750-$3,760 as cut expectations persist and real-yield support fades, which tempers broad USD upside on soft-data days.

🛢 Oil: Brent ~$67-$68 and WTI ~$63-$64 after inventory draws and export disruptions. Sustained firmer crude is a mild CAD tailwind.

📈 Stocks: U.S. indices slipped ahead of data. Leadership remains narrow and sensitive to yields, so a strong PCE would pressure growth stocks and lift USD tactically.