# Forex Major Currencies Outlook (Aug 31 – Sep 4, 2026) Source: https://www.tradersway.com/resources/market-info/forex-major-currencies-outlook-aug-31-sep-4-2026/ Language: en Updated: 2026-08-31 Description: Forex major currencies outlook, Aug 31 – Sep 4, 2026: USD, EUR, GBP and JPY analysis, key economic events and weekly trade levels from Trader's Way. ## Week Ahead Summary RBNZ and BoC meetings, NFP, inflation data from the Eurozone and Switzerland coupled with employment data from Canada, Q2 GDP data from Australia and Switzerland and official PMI data from China will highlight very busy week ahead of us. ![Forex Major Currencies Outlook (Aug 31 – Sep 4, 2026)] ## USD — US Dollar US – Canada trade negotiations did not manage to produce any kind of deal and they led to 50% tariffs on $20bn of Canadian goods. In response to the collapse in negotiations, Canadian Prime Minister Mark Carney announced dollar-for-dollar retaliation starting September 8 stating that they are now in a state of “economic war”. There was a lot of bad blood between sides with each blaming the other for failed negotiations. US Treasury Secretary Scott Bessent announced new set of economic sanctions on Iran. However, they were much softer than feared and are described as a “warning shot”. He added that government can use TGA to buyback Treasuries which is not fundamentally different from using bills to fund buybacks. Stanley Druckenmiller, legendary investor, criticized buyback program stating that “The long-term Treasury yield is the most important price in the world.” He also added that there were no genuine market dysfunctions calling for this move and that when government is defending the level it never works as markets keep testing government’s resolve to defend it. July PCE data saw both headline and core readings unchanged at 3.7% y/y and 3.3% y/y respectively. Monthly figures were for 0.2% for both headline and for core, Second estimate of Q2 GDP was unchanged from advanced reading and showed economy grow by 1.5% annualized. Contribution of personal consumption was increased to 2.31pp while other three components were drag on GDP with net exports deducting 1.14pp from the GDP as imports surged on the back of high demand for foreign AI infrastructure products. Fed Chairman Warsh stated in his speech in Jackson Hole that inflation numbers are “more concerning” and that if there are no signs that underlying inflation is moving towards objective they will have more work to do. He added that he cannot describe financial conditions as restrictive. Warsh clarified that even though CPI and PCE readings were better than expected they are still not pointing to meaningful improvement in underlying inflation trends. Such hawkish words from Fed Chairman pushed USD and a chance of 25bp rate hike in September higher and pulled stocks and gold down. The yield on a 10y Treasury started the week at 4.74%, rose to 4.74% and finished the week at around 4.73%. The yield on 2y Treasury started the week at 4.24%, rose to 4.36% and finished the week at around 4.34%. Spread between 2y and 10y Treasuries started the week at 50bp and finished the week at 39bp. FedWatchTool sees the probability of a no change at a September meeting at around 42% while probability of a 25bp rate hike is at around 58%. This week we will have ISM PMI data and NFP on Friday. Headline number is expected to come around 50k while the unemployment rate is seen ticking up to 4.2%. Important news for USD: *Tuesday*:​ - ISM Manufacturing PMI​ *Thursday*:​ - ISM Services PMI​ *Friday*:​ - NFP - Unemployment Rate ## EUR — Euro Final Q2 GDP from Germany was revised up to 0.3% q/q and 1% y/y from 0.2% q/q and 0.9% y/y as preliminary reported. The report shows that the biggest contributor to grow was external demand as exports rose 2% q/q. Household consumption rose 0.1% while gross fixed capital investment declined 0.2%. French final Q2 GDP was revised down and it now shows no growth q/q vs 0.2% q/q as preliminary reported, thus making France barely avoid technical recession as Q1 print was also revised down and now shows a decline of 0.2% q/q, and 0.5% y/y vs 0.7% y/y as preliminary reported. ECB policymaker and member of the Governing Council Isabel Schnabel stated that bank will need to act and raise rates in order to prevent any possible second-round effects as inflation is expected to stay above the 2% target for an extended period. She also pointed out that economic growth is picking up which could could keep inflation higher. There is a chance that at September meeting there will be talks about upside risks to growth. Schnabel is a well-known hawk so her comments carry the usual hawkish tone. Preliminary August inflation print from France saw headline CPI rise to 2.4% y/y as expected from 2.1% y/y in July on the back of rising energy prices. Spanish reading surged to 4.3% y/y from 3.6% y/y the previous month, higher than 4.2% y/y as expected. The increase was led by rise in energy and food prices while core CPI ticked down to 2.9% y/y. This week we will have preliminary August inflation data expected to climb back over 3% on the back of higher energy prices. Important news for EUR: *Tuesday*:​ - CPI​ ## GBP — British Pound Pound had a quiet week as there were no news from the UK. Currency was left to market’s devices and it lost ground against the majors with biggest drops seen against AUD. That pair was pushed down on the back of higher than expected inflation in Australia. ## AUD — Australian Dollar Minutes from the RBA August meeting showed board unanimous in their decision to keep rates unchanged at 4.35%. There was a discussion about pre-emptive rate hike as members see inflation risks skewed to the upside. July CPI saw inflation easing to 3.5% y/y from 3.8% y/y in June but markets were bracing for a 3.2% y/y print and were negatively surprised that prices grew by 1% m/m, more than 0.8% m/m expected increase. This unexpected inflation print raises the chances that RBA will act in September. Household spending for the month of July rose 1.1% m/m, smashing expectations of a 0.4% m/m growth and it now sits at 7% y/y. This adds to the probability of a September hike but it is toned down with unexpected drop of 3.6% q/q in CAPEX for Q2. This is a big miss as expectations were for it to come flat and a huge drop from 6.5% q/q growth seen in the first quarter of the year. This week we will have Q2 GDP data from Australia and official August PMI data from China. Important news for AUD: *Monday*:​ - Manufacturing PMI (China)​ - Non-Manufacturing PMI (China)​ - Composite PMI (China)​ *Wednesday*:​ - GDP​ ## NZD — New Zealand Dollar Retail sales for Q2 showed a drop of 0.5% q/q while an increase of 0.1% q/q was expected. This comes after the Q1 print was revised up to show a 1% q/q growth. The report shows that biggest declines were seen in fuel, accommodation as well as food and beverage services while biggest increase was seen in sales of electrical and electronic goods. Retail sales rose 3.3% y/y, down from 4.5% y/y as expected. This week we will have RBNZ meeting. Reuters poll shows 90% of economists expecting a rate hike. Given that elections are on November 7 it will be interesting to see whether the bank will keep their hawkishness or they will tone down their rhetoric and signal pause. The reason for change in tone would be that Labour party, leading in polls, is actively advocating for bringing back full employment as a part of RBNZ’s dual mandate. Since the unemployment rate is trending higher that will make it hard for bank to remain hawkish. Important news for NZD: *Wednesday*:​ - RBNZ Interest Rate Decision​ ## CAD — Canadian Dollar Q2 GDP saw economy rebound from very weak Q1 at 0.8% q/q, as expected and 3.3% annualised vs 3.4% annualised as expected. The economy grew by 0.3% m/m in June, same as in May and it helped quarterly reading come in line with expectations. July projections sees economy coming in flat. This week we will have BoC meeting and employment data. Given the escalation in tariffs with USA we cannot see BoC making any changes to the rate. Important news for CAD: *Wednesday*:​ - BoC Interest Rate Decision​ *Friday*: - Employment Change - Unemployment Rate ## JPY — Japanese Yen BoJ Deputy Governor Himino, most hawkish member, stated that rate hikes now are necessary in order to avoid sudden and bigger moves in the future as inflation stays above the 2% target. He warned that inflation above the 2% target would have negative impact on the economy. Himino added that weaker yen is contributing to higher imported inflation which makes overall inflation move higher faster. His talk puts greater probability of a 25bp rate hike in September although he declined to commit to it. August inflation data for Tokyo area saw increases across all three measures. Headline CPI ticked up to 1.9% y/y from 1.8% y/y in July. Ex fresh food category, core CPI, ticked up to 1.8% y/y from 1.7% y/y the previous month while ex fresh food, energy, “core-core” CPI, rose to targeted 2% y/y from 1.8% y/y in July. Most notably wholesale inflation surged 7.2% y/y which reflects cost pressures caused by US – Iran war. Analysts warn that increases in wholesale prices slowly feed into inflation prints so this sharp rise puts upward pressure on inflation. This is another data point pushing odds up for a September hike. ## CHF — Swiss Franc SNB total sight deposits for the week ending August 21 came in at CHF463.7bn vs CHF458.8bn the previous week. After unscheduled announcement of Treasury buybacks SNB pumped more liquidity into the markets through raising sight deposits. This week we will have inflation and Q2 GDP data. Important news for CHF: *Thursday*:​ - CPI​ - GDP You can follow all economic events on the [Economic Calendar](https://www.tradersway.com/resources/economic_calendar) page on our Website. MT server time is set to GMT+3 and if you need assistance converting MT server time to your local time you can use some of the online time converters such as [WorldTimeBuddy](https://www.worldtimebuddy.com/). Please note that this analysis should not be used as investing advice as it is only an overview of the economic events influencing the markets. Please remember that our accounts have Market Execution. 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