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The dollar ends the day in a position of strength, second on the board, driven by the accumulation of hawkish comments (Warsh, Musalem, and earlier in the week Cook and Kashkari). ING highlighted this morning that despite a $15 drop in Brent over the week, Fed rate expectations remained nearly stable (14-17 bps priced for September), clear proof that the dollar narrative is currently driven by Fed communication far more than energy. The probability of a Fed hike before 2027 rises slightly to 83%. Looking ahead, everything hinges on tomorrow's NFP: ING anticipates a risk of slight disappointment (weak ISM Services employment sub-index and ADP converge in this direction), which could limit dollar downside without turning it around completely, short of a glaring negative surprise.

German industrial orders for June significantly beat expectations (+3.1% vs +0.5% expected). ING describes EUR/USD as "well supported" after a retest of 1.1550/1560 resistance, but lacks a clear fundamental catalyst for a clean breakout absent a US disappointment tomorrow. ING's FX Talking maintains a year-end target of 1.18, conditional on two soft US inflation prints before the September FOMC — a scenario ING itself calls a "close call." Moving forward, the euro should remain range-bound in 1.1530-1.1550 prior to NFP, lacking strong directional drive of its own.

No major UK data today. ING confirms in its FX Talking a structurally less favorable view for sterling over the medium term: despite a 6-3 BoE hold vote, key doves seem increasingly convinced that no hike is needed, with a risk that up to 45 bps of tightening currently priced in may be gradually erased. Andy Burnham's first budget on October 28 is identified as a major upcoming event risk (possible tax hikes). Looking ahead, ING forecasts UK inflation falling back below 3.5% by year-end, opening the door to rate cuts rather than hikes — a structurally bearish narrative for the pound.

No Japanese macro data today. ING publishes a relatively precise USD/JPY forecast in its FX Talking: 155-160 range anticipated before mid-September, with a move below 155 only longer-term (154 at 12 months) if the BoJ confirms faster tightening while the Fed stays paused. Key technical note: US Treasury reportedly sold EUR/JPY rather than USD/JPY directly during intervention, though its euro reserves are limited ($26B total), capping repeat capacity. Moving forward, ING seeks new Japanese policy initiatives (e.g., JGB inclusion in new NISA products) as the true catalyst for sustained yen support, rather than intervention alone.

CAD is the strongest currency of the day, lifted by late oil rebound on renewed Iranian tension. ING maintains a structurally unfavorable short-term CAD view in its FX Talking: Canadian labor market resilience allowed the curve to follow Fed expectations, but a generalized dovish Fed repricing in coming months has historically disadvantaged CAD vs G10 peers, despite broader USD weakness that could pull USD/CAD toward 1.38 by year-end. USMCA risk remains a dormant tail risk. Going forward, CAD remains the currency most directly exposed to weekend conflict confirmation.

Australian trade balance clearly beat expectations (1929M vs -1080M expected), led by surging exports (+9.6%). ING confirms in FX Talking a structurally positive AUD view: RBA heads for prolonged pause, but market prices only 12 bps additional tightening by year-end, limiting violent dovish repricing risk. Bullock continues to signal reluctance to close the door on further hikes. ING even anticipates AUD to be among top G10 performers by year-end on robust terms of trade. Going forward, your reading on potential weekend conflict resumption would weigh on AUD via risk sentiment correlation (SPX500) — a factor to watch despite solid structural fundamentals.

No new New Zealand data today, but narrative remains shaped by yesterday's disappointing unemployment. ING confirms explicitly that the market prices RBNZ too hawkishly (3.25% expected by March 2027 vs ING's measured 2.50% view after a final September hike), suspecting two of six committee members were not fully aligned with June's hike — Q2 unemployment rise gives them justification to soften tone in September. Moving forward, ING sees NZD/USD gains capped around 0.60-0.605, with more limited upside than AUD.