Market Analysis

USD/CHF remains supported by expectations that the SNB will keep rates at 0% while the Fed stays cautious on inflation, but a softer U.S. dollar and the franc’s safe-haven role are limiting the pair’s recovery.

EUR/JPY remains elevated after the ECB raised rates to fight energy-driven inflation, but the pair’s upside is becoming more fragile as the Bank of Japan is expected to lift rates to a 31-year high and signal further normalisation.

NZD/USD is trying to stabilise as the RBNZ signals possible rate hikes, but weaker New Zealand manufacturing, high unemployment pressure, and a still-supported U.S. dollar are limiting the kiwi’s recovery.

AUD/JPY remains supported by Australia’s high cash rate and yen weakness, but soft Australian growth, weaker consumer sentiment, BOJ rate-hike expectations, and Japan’s intervention risk are making the upside less straightforward.

EUR/GBP is under pressure as sterling strengthens on improved risk sentiment and Bank of England inflation concerns, but expectations for an ECB rate hike and sticky eurozone inflation are limiting the pair’s downside.

GBP/USD remains under pressure as strong U.S. jobs data and rising Fed hike expectations keep the dollar firm, while slower UK wage growth and softer inflation reduce the pound’s rate-support advantage.

USD/CAD remains elevated after strong U.S. payrolls boosted Fed rate-hike expectations, while Canada’s stronger-than-expected jobs report and higher oil prices helped limit Canadian dollar losses.

AUD/USD is under pressure as Australia’s soft GDP growth, weaker household spending, and slowing housing market reduce the strength of the RBA rate-support story, while Gulf tensions and U.S. jobs-data caution keep the dollar supported.

EUR/USD remains supported by expectations that the ECB will raise rates in June, but renewed Gulf tensions, higher oil prices, and sticky U.S. inflation risks are keeping the dollar firm and limiting euro upside.