The Weekly Wrap: Bracing for the Central Bank Superweek
The financial landscape shifted gears last week as fresh cracks appeared in the US labor market, sending the US Dollar into a retreat and giving major currencies like the Australian Dollar and British Pound a much-needed boost. We are now entering a critical five-day window where four of the world’s major central banks will announce interest rate decisions. This is the Superweek that will define the tone for currency markets as we head into the new year.
This Week’s Calendar
Market Recap: The US Labor Shift
The primary driver of movement over the last seven days was the cooling of US employment data. The surprise negative reading in the ADP private payrolls report suggests that the high interest rate environment in the US is finally biting into the job market. This has increased the probability of the Federal Reserve cutting rates this Thursday, causing the US Dollar Index to weaken as investors look for better yields elsewhere.
Key Currency Pair Breakdown
AUD/USD: The Top Performer
The Australian Dollar was the standout performer last week, gaining nearly 1.4 percent against the greenback. While internal Australian data was mixed, the broad weakness of the US Dollar provided a massive tailwind.
Technical Levels: Watch for resistance at 0.6650. If the pair breaks above this, the next target is 0.6720. Support sits firm at 0.6550.
AUD/USD Daily Chart
GBP/USD: Steady Gains
Sterling capitalized on the dollar's slide, ending the week up roughly 0.8 percent. The market is currently viewing the UK economy as relatively more resilient than its peers, which is supporting the Pound.
Technical Levels: Resistance is currently clustered at 1.3380. A clean break targets 1.3450. Strong support remains at 1.3230.
GBP/USD - Daily Chart
USD/JPY: High Volatility
The Yen remains a rollercoaster. Bank of Japan Governor Ueda is back in focus this week, and the market is highly sensitive to any hint of a rate hike in Japan.
Technical Levels: The pair is hovering near 155.37. Watch 154.50 as the critical support level. If it holds, a push back to 157.00 is likely.
USD/JPY - Daily Chart
Why This Matters
For our clients, the pivot in US data is the most important development. A weaker US Dollar means that those purchasing property in the US or businesses paying US-based suppliers are finally seeing some relief. However, for our professional athletes paid in USD, the purchasing power of your income has dropped slightly when converted back to local spending in the UK or Australia.
Strategy is key in weeks like this. With the Reserve Bank of Australia, Bank of Canada, Swiss National Bank, and the Fed all meeting this week, volatility is guaranteed.
Client Impact
Athletes: If you are holding USD, we need to watch the 1.3380 level on GBP. This is a critical trigger for converting to Sterling before the Fed meeting.
Property Buyers: If you are buying in the US, the current dip in the dollar is an opportunity to execute. Waiting for the Fed announcement is a gamble that could erase these recent gains.
Businesses: Forward contracts remain your best defence. We are using these current levels to lock in certainty for Q1 2026.
The Calendar Ahead
Tuesday: RBA Cash Rate (Expect hold at 3.60 percent)
Wednesday: Bank of Canada Rate Decision
Thursday: FOMC (Fed) Rate Decision (Expect 25bps cut)
Thursday: SNB Policy Rate
Friday: UK GDP Monthly data
Protect your capital by staying ahead of the trigger levels.
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