FX Daily: Dollar caught between many fronts
中文标题
外汇日报：美元在多重因素之间左右为难
Core conclusion · Tlines extraction
The dollar starts the week firm, supported by the bond market, but faces downside risks from escalating US-Canada trade tensions and potential US-China trade conflict. EUR/USD is likely to stabilize rather than rally above 1.170, with fair value just below 1.160. EUR/GBP is expected to return to tracking rate differentials, with a preference for higher levels and a move to 0.870. AUD/USD remains constructive, aiming for above 0.7260 by year-end, while USD/CAD can extend beyond 1.390. Australian inflation data is not expected to change RBA policy stance.
- Institution
- ING THINK
- Published
- 08/25/2026
- Research topic
- Dollar outlook · DXY · USD/CAD
- Time horizon
- short-term · not specified · coming months · year · near-term · year-end
Key arguments
- Dollar supported by bond market, but risks skewed to downside due to trade tensions.
- EUR/USD fair value just below 1.160, more likely to stabilize than rally above 1.170.
- EUR/GBP expected to track rate differentials; preference for higher levels, target 0.870.
- AUD/USD constructive, targeting a move above May highs 0.7260-70 before year-end.
- USD/CAD rebound can extend beyond 1.390 due to escalating US-Canada trade tensions.
Key numbers
- EUR/USD fair value
- just below 1.160
- EUR/USD resistance
- 1.170
- EUR/GBP target
- 0.870
- AUD/USD target (end-3Q)
- 0.72
- AUD/USD May highs
- 0.7260-70
- USD/CAD extension
- beyond 1.390
- Australia CPI forecast
- 3.3% from 3.8%
- Australia trimmed mean forecast
- 3.5% from 3.6%
Main risks
- US-China trade spat could revive and be negative for the dollar.
- US consumer confidence data could surprise to the downside.
- Bond market volatility could disrupt currency stabilization.
- Canada tariffs could escalate further, supporting USD/CAD.
- Australian inflation could surprise, affecting AUD.
Corresponding source evidence
The balance of risks for the dollar remains skewed to the downside, but our baseline is for further consolidation into the Jackson Hole risk event later this week.
· short-termWe think the rebound in USD/CAD can extend beyond 1.390.
· not specifiedAny serious revival of the US-China trade spat would be negative for the dollar in our view, mirroring last year’s USD correlation with the issue.
· not specified
Conditions / invalidation
- If US-China trade tensions revive seriously
- If calm is restored in the bond market
- If trimmed mean eases from 3.6% to 3.5% as expected
- If inflation surprises upwards
Context: the conclusion is Tlines' automated extraction, not the institution's wording. Quoted evidence is publisher wording. Scope and date must travel with the conclusion.
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AI analysis
How this page was produced
Tlines extracted the conclusion, arguments, numbers and risks above from the report published by ING THINK on 08/25/2026, then structured them for comparison. The publisher's own wording is reachable through the source link on this page and is displayed in full above. Last updated 10/17/2026. Methodology · Source policy · AI usage · Request a correction