What moved
The week came down to one currency going the wrong way for everyone holding it. Four of the six biggest moves among the 28 pairs were the euro falling, against the franc, the dollar, sterling and the yen.
| Pair | Monday to Monday |
|---|---|
| EUR/CHF | -1.76% |
| EUR/USD | -1.59% |
| NZD/CHF | -1.44% |
| EUR/JPY | -1.32% |
| EUR/GBP | -1.30% |
| NZD/USD | -1.26% |
Against the basket of the other seven, the order was a surprise at the top. The Swiss franc started the week as the weakest of the eight and finished it as the strongest. The euro went the other way and ended last.
| Currency | Against the basket |
|---|---|
| Swiss franc | +0.79% |
| US dollar | +0.62% |
| Japanese yen | +0.35% |
| British pound | +0.33% |
| Canadian dollar | -0.12% |
| Australian dollar | -0.32% |
| New Zealand dollar | -0.65% |
| Euro | -0.98% |
Risk sentiment: from mildly on to mildly off
Our risk sentiment reading, the heaviest of the four pillars at 40, opened the week at +13 on Monday, still on the positive side. It fell to -27 by Tuesday morning as credit and the balance between defensive and cyclical shares weighed on it. On Wednesday it stood at -28 and the mood turned to risk off. It eased to -20 on Thursday and -19 on Friday.
That shape hurt the currencies that need confidence. The New Zealand dollar lost -0.65% and the Australian dollar -0.32%, even with a fresh rate hike in Sydney. The haven side was less tidy. The yen gained, but the franc did nothing defensive for three days and then caught up all at once, which is the part of the week we read worst.
The central banks
One decision and a long list of speeches, most of them about the same question: whether more hikes are needed.
- The RBA raised its cash rate by 25 basis points to 4.60 percent on Tuesday, unanimously, as the market had priced. The price reaction was small and the Australian dollar still finished the week in the bottom three.
- The Fed spoke with several voices. Cook said further steps depend on data, Barr said further adjustments are likely to be needed, Williams saw no urgency, and Kashkari kept an October hike open.
- Lagarde told the European Parliament on Monday that a measured response remains appropriate, with energy as the main driver of inflation. Schnabel gave no explicit guidance on Wednesday.
- Ramsden of the Bank of England said he is ready to raise rates if upside inflation pressure persists.
- Schlegel of the SNB said over the weekend that the bank is in a comfortable position on inflation.
Every rate and every next meeting is on the central banks page.
Geopolitics and the data
The week opened on the Strait of Hormuz. Trump rejected an Iranian proposal over the weekend, oil climbed to around 94 dollars on Monday, and gold slid below 4,200 dollars as the dollar firmed. By Wednesday oil was back near 90 dollars after a release from American reserves.
For the dollar, the data pulled in two directions. Core PCE inflation came in at 3.0% against 3.3% expected on Wednesday, and the odds of an October hike fell from about 70 to about 47 percent. A few hours later the third estimate of second quarter growth was revised up to 2.2% from 1.5%. Then on Friday the jobs report showed 29,000 new payrolls against about 90,000 expected, with unemployment at 4.2%.
In Europe, eurozone inflation beat expectations at 3.8% against 3.6%, after German inflation of 3.3% against 3.1% on Wednesday. Energy was up 18.8% on the year. In Japan, Tokyo core inflation jumped to 2.7% against 2.4% expected, while the finance ministry kept warning about the weak yen. Australian inflation of 4.0%, Swiss inflation of 1.0% and Canadian July growth of 0.0% all matched expectations.
What we recommended, and how it went
The three setups and what they came to are in the table at the top of this page: nine calls, 6 of 9 the expected way, +0.94% together. That is better than the week before, when the setups with our mark came to 6 of 11 and +0.33%. The setups in the list without our mark came to 4 of 6 and +0.05%. The running record is on the track record.
The euro was read right. Short EUR/USD was in the list on two mornings and gained on both: +0.37% from Wednesday to Thursday, the day American growth was revised up and the euro hit its lowest level against the dollar since May 2025, and +0.54% from Friday to Monday. The second one held through a jobs report that missed badly, because the euro fell harder than the dollar did. Higher inflation driven by energy did not help the euro this time.
The franc was read wrong. Long USD/CHF gained +0.35% from Monday to Tuesday and +0.02% the day after, on a franc that had shown no haven demand for weeks. Then from Thursday to Friday it lost -0.82%. Swiss inflation came in exactly as expected that day, and we found no news behind the move. The franc simply turned, and by Friday it was the strongest of the eight. Over the whole week USD/CHF moved just -0.17%, so the call won small twice and lost big once.
Long USD/CAD sat in the middle at 2 of 4 and +0.48%. Canada had flat July growth and an American import ban to deal with, and the dollar mostly did the rest. On the ranking itself, the first currency beat the last on 3 of 5 mornings.
This week
- Tuesday: Swiss unemployment at 07:45 Amsterdam.
- Friday: the Canada jobs report at 14:30 Amsterdam.
A thin week for releases after a crowded one. The Canadian jobs report is the main one, for a currency that has spent the week near the bottom of our ladder. The franc goes into its own labour figures after a late turn that no release explained. Every date and time is on the calendar.