Forex Forecast: Rate-Cut Delays Reshape Major Currency Pair Bias

Inflation persistence flagged through rising COLA projections adds another data point supporting delayed central bank easing, a theme increasingly dominant across forex forecast desks. Markets that had priced aggressive 2027 rate cuts are now trimming those bets as core inflation proves stickier than expected.

This recalibration matters most for EUR/USD and GBP/USD forecasts, where narrowing rate-cut timelines abroad versus a patient Fed compress yield differentials traders had relied on for directional bias. USD/JPY also stays sensitive, given the Bank of Japan's cautious tightening path contrasted against inflation-driven Fed patience.

Near-term forex forecast models should stay data-dependent, treating each fresh inflation print as a potential catalyst for repricing rate-cut timelines and, by extension, major currency pair trajectories.