Weekly Forex Forecast: US Dollar Weakens as Risk Flows Boost Major Currency Pairs
April 10, 2026 | FXStreet | By Agustin Wazne
The US Dollar (USD) faced downward pressure this week, with the US Dollar Index (DXY) retreating toward the 98.60 level. Market participants reacted to the recent US Consumer Price Index (CPI) report that highlighted persistently elevated inflation, predominantly fueled by rising energy prices amid ongoing geopolitical tensions in the Middle East. Meanwhile, uncertainties surrounding Iran, the Strait of Hormuz, and fragile ceasefire conditions continue to stir volatility in oil markets, bolstering demand for safe-haven assets.
US Dollar’s Performance Against Major Currencies
Despite the broader weakness, the USD maintained relative strength against the New Zealand Dollar (NZD), though it softened against other major currencies. The accompanying heat map of percentage changes illustrates the relative performance, with the USD sliding 0.30% versus the Euro (EUR), 0.26% against the British Pound (GBP), but gaining modestly against the Japanese Yen (JPY).
| Currency Pair | % Change Today |
|---|---|
| USD/EUR | -0.30% |
| USD/GBP | -0.26% |
| USD/JPY | +0.16% |
| USD/CAD | +0.05% |
| USD/AUD | +0.03% |
| USD/NZD | +0.21% |
Major Currency Pairs React to Softer USD and Risk Sentiment
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EUR/USD: The Euro rallied strongly toward the 1.1730 level, sustaining bullish momentum for five consecutive days. The pair’s advance was supported by a softer USD as traders looked beyond the initial CPI reaction, aided by expectations of a gradual easing cycle from the Federal Reserve (Fed).
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GBP/USD: The British Pound climbed near 1.3470, extending gains due to a weaker USD backdrop. Despite lingering domestic economic concerns, GBP/USD benefited chiefly from USD dynamics, allowing the Pound some breathing room.
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USD/JPY: The pair remained elevated near 159.30, buoyed by rising US Treasury yields and a relatively softer USD. However, geopolitical uncertainty related to the Middle East limited significant support for the Japanese Yen.
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AUD/USD: Trading neutrally close to 0.7080, the Australian Dollar strove for a fifth day of gains. The pair’s upside was fragile amid fluctuating risk appetite tied to Middle East developments.
Commodities: Oil and Gold Firm Amid Geopolitical Risks
West Texas Intermediate (WTI) crude oil remained volatile yet firmly below the $100 per barrel threshold, hovering around $96.40. Supply concerns persist due to tensions around the Strait of Hormuz and broader Middle East instability which continue to drive oil price fluctuations. Elevated oil prices are feeding into global inflation expectations, contributing to market nervousness.
Gold prices advanced, trading near $1,770 per ounce, benefiting from the softer USD and persistent geopolitical tensions. Investors continued to seek gold as a safe-haven amidst falling yields, though any stabilization in risk sentiment could cap upside potential.
Upcoming Economic Events and Central Bank Speeches
Market watchers will closely monitor an array of central bank speeches and economic data releases next week, which are expected to shape monetary policy expectations and currency dynamics:
- Saturday, April 11: RBNZ’s Breman speech
- Monday, April 13: ECB’s De Guindos and Fed’s Miran speeches
- Tuesday, April 14: ECB’s Lane, Cipollone speeches; BoE Governor Andrew Bailey speech; multiple Fed speeches (Goolsbee, Barr, Paulson); BoE’s Greene speech; ECB President Christine Lagarde speech
- Wednesday, April 15: Key Fed and ECB speeches including ECB President Lagarde and BoE Governor Bailey
- Thursday, April 16: ECB’s Lane, Nagel speeches; multiple Fed speeches; BoE’s Taylor speech
- Friday, April 17: Fed’s Waller speech; US jobless claims and industrial production data
In addition, essential economic data from the US, Eurozone, UK, Australia, and China are set to be released throughout the week, including CPI readings, employment figures, GDP growth, trade balances, and manufacturing indexes, all of which will influence market sentiment.
Understanding WTI Oil’s Influence on Markets
West Texas Intermediate (WTI) Oil, a benchmark crude traded primarily in the US, remains a focal point amid rising geopolitical tensions. Its price trajectory is shaped by the delicate interplay of supply and demand, geopolitical disruptions, OPEC production decisions, and the strength of the USD. Weekly inventory reports from the American Petroleum Institute (API) and the Energy Information Agency (EIA) also provide insight into supply-demand fundamentals, influencing short-term price movements.
Conclusion
The coming week is expected to feature continued US Dollar weakness amid supportive risk-on flows that have lifted major currency pairs, particularly EUR/USD and GBP/USD. Geopolitical tensions in the Middle East remain a key driver behind energy market volatility and safe-haven demand. Market participants will keenly observe central bank communications and economic data to gauge the trajectory of monetary policy and inflation, which will ultimately steer forex market direction.
Stay tuned to FXStreet for ongoing analysis and market updates.
About the Author:
Agustin Wazne is a Junior News Editor at FXStreet specializing in Commodities and Major Currency Pairs.
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