US Dollar Monthly Exchange Rates Forecast - September 2025

The US dollar weakened as markets priced in a near-certain Federal Reserve rate cut, with speculation that further easing could follow later in the year. Softer August employment data and a higher unemployment rate reinforced this view, while political uncertainty and concerns over Fed independence weighed further on sentiment.

US Dollar (USD) Outlook: Dollar weakness is likely to persist through the month as Fed easing expectations dominate. If economic data continues to underperform, the greenback could see further downside, especially against higher-yielding and commodity-linked currencies.

The Canadian dollar drifted lower as expectations grew for additional Bank of Canada easing. Softer services activity, slowing consumer demand, and weaker labor data added to the cautious outlook. Firm oil prices helped cushion the decline but failed to trigger a sustained rebound.

Canadian Dollar (CAD) Outlook: The loonie may stay under modest pressure unless energy prices rally further. Policy divergence with the Fed could create short-term volatility, but US dollar softness may offer CAD opportunities to recover later in the month.

USD/CAD Monthly Trading Range: 1.35 – 1.39 (USD/CAD) (↔ neutral / slight ↑ CAD bias)

The euro stayed resilient, buoyed by steady Eurozone growth and sticky inflation that kept the European Central Bank from signaling near-term easing. Trade momentum and its strengthening role as a reserve currency reinforced investor confidence.

Euro (EUR) Outlook: The euro is expected to hold firm as long as ECB policy remains steady and US dollar sentiment stays weak. Upside potential could be tested if Eurozone data surprises to the upside, especially in industrial production and exports.

EUR/USD Monthly Trading Range: 1.16 – 1.20 (EUR/USD) (↑ bullish bias)

The pound held firm, supported by inflation that remains above the Bank of England’s target. While U.K. growth remains sluggish, the BoE’s reluctance to ease quickly has given sterling relative strength against peers.

British Pound (GBP) Outlook: Sterling may trade sideways with a mild upward bias, supported by sticky inflation. However, persistent growth concerns could limit gains, leaving GBP vulnerable to shifts in global risk appetite.

GBP/USD Monthly Trading Range: 1.35 – 1.39 (GBP/USD) (↔ stable / mild ↑ bias)

The yen gained ground as safe-haven demand returned amid global uncertainty. The Bank of Japan’s gradual departure from ultra-loose policy added credibility, while the prospect of US rate cuts narrowed yield differentials.

Japanese Yen (JPY) Outlook: The yen may continue to benefit from safe-haven flows, especially if geopolitical or financial risks escalate. Gains could extend if the BoJ signals further normalization, though domestic growth constraints remain a limiting factor.

USD/JPY Monthly Trading Range: 144 – 149 (USD/JPY) (↑ JPY bullish bias / USD weaker).

The yuan traded steadily, anchored by the People’s Bank of China’s strong daily fixings and liquidity measures. Stabilization in manufacturing and targeted policy support improved sentiment, while foreign inflows helped bolster confidence.

Chinese Yuan (CNY) Outlook: The yuan is expected to remain range-bound as the PBoC continues to manage volatility. Further policy support and signs of recovery in domestic demand could tilt sentiment more positively, though trade tensions remain a risk.

USD/CNY Monthly Trading Range: 7.05 – 7.20 (USD/CNY) (↔ neutral bias)

The rupee found stability after recent volatility, supported by equity inflows and Reserve Bank of India interventions. Resilient services exports provided a buffer against elevated import costs, keeping the currency within a narrow range.

Indian Rupee (INR) Outlook: The rupee will likely remain stable if foreign inflows continue and oil prices stay contained. However, any flare-up in trade deficits or external financing needs could renew pressure.

USD/INR Monthly Trading Range: 85.0 – 88.5 (USD/INR) (↔ neutral bias)

The Australian dollar strengthened modestly on improved global risk sentiment and steady demand from Asia. Firmer commodity prices added to its momentum, though domestic growth challenges capped the upside.

Australian Dollar (AUD) Outlook: The AUD could see further gains if global markets remain supportive and China’s recovery gains traction. Domestic headwinds, however, may keep rallies in check, making the currency sensitive to shifts in external demand.

AUD/USD Monthly Trading Range: 0.64 – 0.67 (AUD/USD) (↑ bullish bias)

The New Zealand dollar traded steadily, underpinned by dairy exports and cautious Reserve Bank of New Zealand guidance. Despite uneven domestic growth, the NZD held firm alongside broader market resilience.

New Zealand Dollar (NZD) Outlook: The NZD may continue to shadow the AUD, benefiting from US dollar weakness and stable commodity demand. Risks stem from soft domestic growth, which could cap upside momentum.

NZD/USD Monthly Trading Range: 0.59 – 0.62 (NZD/USD) (↔ stable / mild ↑ bias).

The peso held firm, supported by remittance inflows and investor demand for higher-yielding assets. Stable fundamentals and US dollar weakness gave the currency additional resilience.

Mexican Peso (MXN) Outlook: The peso is likely to remain one of the stronger emerging market currencies, though external risks such as global risk aversion or trade shocks could trigger volatility. Carry appeal will continue to attract investor flows.

USD/MXN Monthly Trading Range: 18.40 – 19.00 (USD/MXN) (↑ MXN bullish bias / USD weaker)