Weekly Forex News & Market Pulse

The US dollar showed strong momentum and traded at a one-month high against major currencies. Safe-haven currencies like the yen and Swiss franc gained as risk sentiment stayed cautious. Gold prices remained strong, while oil price volatility influenced commodity currencies. Overall, the week showed controlled buying in the forex market with moderate volatility and clear trends.

ISM Manufacturing PMI Signals US Economic Slowdown, Dollar Weakens

The US ISM Manufacturing PMI showed continued contraction, highlighting slowing factory activity and weaker economic momentum. The data raised concerns about US growth outlook and increased expectations of a more cautious Federal Reserve policy stance.

Impact: USD strong, gold prices found support, and forex markets turned cautious early in the week.

ISM Services PMI Shows Strength in US Economy, Limits Dollar Losses

US ISM Services PMI surprised to the upside, showing strength in the services sector despite weak manufacturing data. This suggests parts of the US economy remain resilient, helping stabilise market sentiment ahead of key labour market releases.

Impact: USD losses were limited, volatility eased temporarily, and traders waited for stronger signals from jobs data.

US Nonfarm Payrolls Miss Expectations, Raise Fed Rate Cut Hopes

US Nonfarm Payrolls came in below expectations, signalling a cooling labour market and slowing job growth. This strengthened bets on future Fed rate cuts and shifted focus toward economic slowdown risks.

Impact: USD dropped sharply, gold surged, and major forex pairs saw strong volatility.

Geopolitical Tensions Boost Safe Haven Demand for Gold and Yen

Rising geopolitical tension linked to US actions in Venezuela increased global uncertainty. Investors reduced risk exposure and moved toward safe-haven assets amid concerns over oil supply and global stability.

Impact: Gold and JPY gained strength, risk currencies weakened, and overall market sentiment turned risk-off.

German CPI Data Misses Forecasts, Euro Remains Under Pressure

German CPI data showed softer inflation, raising doubts about strong price pressures in the Eurozone. This reduced expectations of aggressive ECB tightening and limited euro strength despite strong USD.

Impact: EUR remained under pressure, with muted movement in EUR/USD.

ADP Jobs Report Mixed Ahead of Key US Employment Data

ADP employment data showed moderate and uneven job growth, offering no clear signal ahead of the official US Nonfarm Payrolls report. Traders stayed cautious and avoided large positions.

Impact: USD traded in a narrow range, and forex markets remained sideways before NFP.

Elon Musk’s xAI Raises $20 Billion in Major AI Funding Round

Elon Musk’s AI company xAI raised $20 billion in a large funding round, higher than expected. The money will be used to build new AI models and expand computing power with support from major global investors.

Impact: Positive for AI stocks, boosted tech market sentiment, and increased interest in artificial intelligence investments.

Trump Plans to Ban Wall Street From Buying Single-Family Homes

US President Donald Trump said his government may ban big investment firms from buying single-family homes. The goal is to reduce housing prices and improve affordability for local buyers.

Impact: Hurt real estate and homebuilder stocks, increased regulation concerns, and created uncertainty for institutional property investors.

Trump Pressures US Defence Companies to Stop Dividends and Buybacks

Donald Trump said US defence companies should not pay dividends or buy back shares until they improve military equipment production and delivery. He wants companies to invest more in factories and research instead of payouts.

Impact: Pressured defence stocks, reduced dividend expectations, and increased government oversight risk for the defence sector.

Global Markets Remain Cautious Ahead of US Jobs Data

Global markets stayed calm this week as traders waited for the US Nonfarm Payrolls report. Uncertainty around US trade and tariff policies also kept investors cautious and reduced aggressive trading.

Impact: Forex markets traded in a narrow range, the US dollar stayed stable, risk assets slowed, and volatility remained low before key US jobs data.

Major Currency Pair Movements

• EUR/USD: Fell during the week as strong US dollar momentum kept sustained pressure on the euro.
• GBP/USD: Moved lower overall as broad US dollar strength outweighed any short term buying interest.
• USD/JPY: Moved higher as strong US dollar demand combined with continued weakness in the Japanese yen.
• USD/CAD: Remained volatile but trended higher overall, supported by strong US dollar strength despite oil price swings.
• USD/CHF: Moved higher as the US dollar strength dominated price action through the week.
• AUD/USD: Moved lower as persistent US dollar strength capped upside attempts.
• NZD/USD: Ended the week lower, pressured by a stronger US dollar environment.

Trader’s Takeaway

The US dollar remained extremely strong throughout the week and climbed to a one-month high.

The Japanese yen weakened due to uncertainty over the timing of the next Bank of Japan rate cut and rising China-Japan tensions.

Oil-related moves kept CAD and other commodity currencies volatile.

Gold stayed firm during the week, supporting overall market sentiment.

Strong US dollar momentum kept pressure on most major forex pairs throughout the week.

What to Watch Next Week

The US dollar will remain in focus as traders assess whether recent weakness continues or stabilises.

Any follow-up developments around geopolitical tensions may keep safe-haven demand active.

Gold price strength will be closely watched to gauge overall risk sentiment.

Oil prices may stay volatile, impacting CAD and other commodity currencies.

Markets will look ahead to upcoming US economic data for fresh clues on growth and interest rate expectations.

Overall volatility may remain elevated as traders position for the next major data releases.

Weekly Summary

The forex market stayed active this week with the US dollar climbing to a one-month high. The US dollar remained weak, and the Japanese yen weakened as uncertainty around Bank of Japan policy increased. Oil price changes influenced commodity currencies, and gold stayed strong. Overall market sentiment remained cautious, but buyers controlled most price action during the week.

Disclaimer

This newsletter provides market insights and weekly summaries. These are expectations, not guarantees. Markets can change due to unexpected events. Always trade responsibly and use proper risk management.