The Xe Global Currency Outlook - September 2025

The USD’s soft patch looks set to continue into mid-September as markets lean toward a Fed rate cut on Sept 17. EUR holds firm on improving Eurozone momentum and the late-July EU–US trade deal that reduced uncertainty. GBP underperforms on sticky inflation and slower growth. PBoC intervention keeps USD/CNY aligned with the broader USD trend. AUD (and to a lesser extent NZD and CAD) show modest outperformance as recession fears fade.

What changed this month (macro)

• The US “de minimis” exemption (duty-free shipments under US$800) ended Aug 29 via Executive Order—potentially lifting import prices and adding friction to some supply chains.

• An appeals court ruled “reciprocal” tariffs illegal (potential SCOTUS appeal); too early for a market move but headline risk remains.

• At Jackson Hole, Chair Powell flagged rising risks to employment; markets price elevated odds of a Sept 17 Fed cut.

Key takeaways

USD: Resumed its downtrend in August on softer labor signals; medium-term dollar index seen modestly lower over 6–12 months (with uncertainty).

• EUR: Supported by better growth data and reduced policy uncertainty.

• GBP: A laggard as high inflation meets slow growth; Bank of England cautious after the August cut.

• CNY: PBoC’s active daily operations reduce USD/CNY volatility and keep the pair near the USD’s broad trend.

• AUD/NZD/CAD: Modest outperformance as worst-case global slowdown fears fade.

• JPY: Range-bound now; modest strengthening bias if USD softens and BoJ nudges rates higher later.

Top pairs & pathfinders (levels from 1 Sept; 1–6M projections)

• EUR/USD 1.1705 → 1.18 (1M) → 1.19 (6M). Consolidation likely gives way to a re-test of 1.1829 if the Fed cuts.

• GBP/USD 1.3510 → 1.35 (1M) → 1.38 (6M). Upside relies on a softer USD; UK macro still a headwind.

• USD/JPY 146.79 → 145.00 (3M) → 140.00 (6M). Low near-term BoJ hike odds keep USD as the main driver.

• USD/CNY 7.1308 → 7.11 (3M) → 7.05 (6M), with PBoC dampening volatility; a Fed cut would help the drift lower.

• AUD/USD 0.6543 → 0.6650 (3M) → 0.6700 (6M). Supported by improving domestic data and a softer USD.

• USD/CAD 1.3733 → 1.35 (3M) → 1.34 (6M). Modest CAD outperformance in a soft-landing narrative.

• USD/MXN 18.64 with risks to 18.50 near-term and 18.00 on a 6M view as fundamentals improve.

Dates to watch (September)

• ECB – Sept 11 (cut odds negligible).

• Fed – Sept 17 (markets price a cut; labor-market risks in focus).

• BoE – Sept 18 (no cut firmly priced; UK inflation still elevated).

• BoJ – Sept 19 (low hike odds).

What this means for senders & businesses

• USD weakness bias: Consider timing USD-sell flows around the Sept 17 Fed decision if a cut is delivered as priced.

• EUR resilience: Dips may find support amid improved Eurozone momentum.

• Operational watch-outs: The end of US “de minimis” could add landed-cost friction for small parcels; review pricing and thresholds with logistics partners.

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The content within this blog post is not intended for use as financial advice. This content is for informational purposes only.