The negative trend followed comments from President Donald Trump, who stated that Federal Reserve Chair Jerome Powell is incompetent and is damaging the national economy and the housing market in particular. Meanwhile, investors are trying to anticipate the outcome of Wednesday’s 20:00 (GMT+2) Fed meeting and the central bank’s policy path through the end of 2026. The baseline forecast points to a 125-basis-point rate cut across four to five adjustments. Should officials hint at only a minor reduction, the dollar could hit fresh yearly lows this week. Tomorrow at 14:30 (GMT+2), retail sales data will be released. Analysts expect a slowdown from 0.5% to 0.2%, which would add further pressure on the currency.

Eurozone

The euro is strengthening against the U.S. dollar but falling in pairs with the pound and the yen.

Fitch Ratings downgraded France’s credit rating from “AA–” to “A+” with a stable outlook, citing rising political uncertainty and the country’s swelling debt, projected to reach 121.0% of GDP by 2027. However, S&P Global Ratings maintained its “AA–” rating with a negative outlook, while Moody’s kept its “Aa3” rating with a stable outlook. On the other hand, net speculative positions in EUR/USD surged last week to a two-year high of $18.4 billion

United Kingdom

The pound is gaining against the U.S. dollar, the euro, and the yen.

In Q2, the services sector grew 0.4%, with 10 of 14 industries showing expansion. Healthcare (+1.5%) and social services (+1.2%) led the gains, while wholesale and retail trade posted the steepest decline (–1.3%). In July, the figure eased from 0.3% to 0.1%. That month, 7 of 14 industries expanded, led by logistics (+1.4%) and healthcare (+0.4%), while the sharpest contraction came in information and communications (–0.7%).

Japan

The yen is weakening against the pound but strengthening versus the euro and the U.S. dollar.

Amid weak macroeconomic data and pressure from U.S. trade sanctions, the Bank of Japan is expected to delay monetary tightening until late this year or early next. The only supportive factor for the yen could be a Fed rate cut, which would narrow the borrowing cost gap between the two economies. Traders are also anticipating the BoJ’s sale of ETF assets held on its balance sheet, with an official announcement at the next meeting potentially drawing in fresh investors.

Australia

The Australian dollar is rising against the U.S. dollar but weakening against the yen, pound, and euro.

The currency is under pressure from weak economic data in China, Australia’s key trading partner. In August, the unemployment rate edged up from 5.2% to 5.3%, retail sales slowed from 3.7% to 3.4% versus a 3.8% forecast, and industrial production decelerated from 5.7% to 5.2%.

Oil

Oil prices are gradually rising, approaching the key monthly level of 67.00.

U.S. President Donald Trump released a letter addressed to NATO allies, stating that Washington is ready to impose restrictive sanctions on Russia if other member states commit to halting imports of Russian energy. The rhetoric mainly targets Turkey and Hungary, which continue to import large volumes, while most other alliance members have sharply reduced or halted purchases. Meanwhile, responding to Trump’s proposal for the G7 to impose tariffs of 50–100% on India and China if they refuse to comply, Beijing warned it may implement “mirror” countermeasures against the bloc.