Daily FX Outlook: 26-July-2025
- GordonGekko
- Jul 27
- 2 min read
26-July 2025. The U.S. dollar regained some ground on Friday as strong domestic data and optimism over trade negotiations reduced safe‑haven demand; however, the greenback was still headed for its biggest weekly drop in a month ahead of central‑bank meetings.
FX Highlights
Pair / Index | Latest level (25 Jul 2025) | Key move |
Dollar index (DXY) | 97.68 | Rose 0.23 % on Friday but remained down about 0.8 % for the week as earlier weakness persisted. |
EUR/USD | ≈$1.1741 | Down 0.11 % on the day; still up nearly 1 % on the week as a relatively upbeat European Central Bank assessment and hopes of a U.S.–EU trade deal supported the euro. |
USD/JPY | ≈¥147.6 | Up 0.44 % on Friday; soft Tokyo inflation data and U.S.–Japan trade optimism weakened the yen. |
GBP/USD | ≈$1.3434 | Fell 0.6 % as British retail sales and business‑activity data disappointed. The euro strengthened to about 87.4 pence (its highest since April). |
USD/CHF | ≈0.795 | Slightly lower; Swiss franc gained ~0.08 %. |
USD/CAD | ≈1.37 | Rose about 0.5 % with the Canadian dollar giving back some weekly gains amid fading trade‑deal optimism. |
AUD/USD | ≈0.6564 | Down 0.39 % on the day; traders watched commodity prices. |
NZD/USD | ≈0.6014 | Edge lower by 0.22 %. |
Dollar index (weekly) | On course for biggest weekly drop since late June. |
Drivers & Context
U.S. data & trade optimism: Strong U.S. economic data (e.g., capital‑goods shipments) bolstered expectations that the Federal Reserve could pause rate cuts. Reports of progress in U.S.–Japan and U.S.–EU trade negotiations lifted sentiment.
Central‑bank meetings ahead: Traders expect both the Federal Reserve and the Bank of Japan to hold rates steady next week; focus is on forward guidance and any hints of future moves.
Euro strength: The euro drew support from the European Central Bank’s steady policy stance and optimism that an EU–U.S. trade deal could reduce tariffs.
Sterling weakness: Sterling slipped as U.K. retail sales bounced less than expected and business‑activity data signalled soft growth.
Looking Ahead
Policy meetings: The Federal Reserve and the Bank of Japan announce interest‑rate decisions next week; investors will watch for any shift in tone.
Economic data: U.S. personal consumption expenditure (PCE) inflation and other macro indicators could influence the dollar.
Trade negotiations: The approaching Aug. 1 deadline for U.S. trade talks with major partners may add volatility.