EUR/USD Faces Yield and Energy Headwinds Amid Renewed Global Uncertainty

The EUR/USD pair is facing headwinds from yield and energy factors in the week ahead, according to Forex Factory. The Australian dollar has recovered over the past three weeks but its rally may begin to fade due to expectations for another RBA rate hike, renewed Middle East tensions, and the outlook for the US dollar.

The SNB is expected to keep interest rates at zero until the end of 2027, based on current forecasts for inflation and assuming no major new shocks. This outlook suggests that the Bank of England will not raise interest rates this Thursday, despite the rise in energy prices posing a fresh dilemma. The updated forecasts are likely to show inflation fairly close to 3% in the second half of this year and into early next.

The Federal Reserve meeting and Australia's quarterly CPI data are key events that will drive the next major move in AUD/USD. Renewed Middle East tensions and the outlook for the US dollar could determine whether the rally extends or begins to fade.