Forex Today: Fed Rate Cut on Horizon as UK GDP Takes Center Stage

11 Sept 2025 19:30

The case for the Federal Reserve’s first interest rate cut since December 2024 has strengthened following the latest US inflation data from both producer and consumer sides. I’ve watched the US Dollar (USD) resume its downward spiral as we approach Friday’s University of Michigan Consumer Sentiment Index, which caps off an eventful week of economic releases.

Friday’s Market Focus: September 12

I’m seeing the Dollar Index (DXY) drop 0.26% to 97.54. Though some chart patterns hint at a potential bottom, the weak Initial Jobless Claims data exposes continued vulnerability in the labor market ahead of next week’s critical Fed meeting.

EUR/USD has gained ground after the ECB maintained current rates, with Christine Lagarde declaring the “disinflationary process over.” The euro pushed above 1.1700 as dollar weakness persists. My sources suggest the ECB will likely hold rates steady through year-end.

GBP/USD has broken above 1.3500 and seems ready to challenge 1.3600 as traders await Friday’s GDP figures. Analysts expect 0% month-over-month growth, while yearly growth is projected at 1.1%, up significantly from June’s anemic 0.2%.

USD/JPY turned negative following disappointing US data. Traders are eyeing the 147.00 level while awaiting Japanese Industrial Production and Capacity Utilization numbers that could reveal manufacturing sector health amid political turmoil following PM Ishiba’s resignation.

AUD/USD surged to fresh yearly highs of 0.6664, potentially testing 0.6700 soon. With empty economic calendars in both Australia and China, market sentiment will likely drive Aussie movements.

Gold prices struggle to find direction despite dollar weakness. XAU/USD appears stuck in the $3,630-$3,650 range as markets digest the latest US economic data.

US Dollar Performance This Week

The Dollar performed worst against the Australian Dollar, dropping 1.64%, while gaining marginally (0.05%) against the Canadian Dollar.

[Currency performance table omitted]

The heat map shows percentage changes between major currencies. Base currency appears in the left column, quote currency in the top row. For example, USD/JPY shows the percentage change with USD as base and JPY as quote.

Disclaimer: For information purposes only. Past performance doesn’t predict future results.

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Related Instrument [EUR/USD 1.16220 -0.00193 (-0.17%)]