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06:57 Japan’s Katayama says expect BoJ to conduct appropriate monetary policy to achieve 2% price target
Japanese Finance Minister (FM) Satsuki Katayama said on Thursday that official will review budget requests, control debt issuance at a level that can gain market credibility. Katayama also expect the Bank of Japan (BoJ) to steer policy properly to achieve stable, sustainable 2% inflation.
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Japanese Finance Minister (FM) Satsuki Katayama said on Thursday that official will review budget requests, control debt issuance at a level that can gain market credibility. Katayama also expect the Bank of Japan (BoJ) to steer policy properly to achieve stable, sustainable 2% inflation.Key quotesWill review budget requests, control debt issuance at a level that can gain market credibility.
We have stated our determination to address excessive volatility when we launched Japan-US joint intervention.
No comment on BoJ policy.
Expect BoJ to closely coordinate with government and conduct appropriate monetary policy to achieve 2% price target.
Expect BoJ to steer policy properly to achieve stable, sustainable 2% inflation.Market reactionAt the time of writing, the USD/JPY pair is down 0.10% on the day at 156.10. Bank of Japan FAQs What is the Bank of Japan? The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%. What has been the Bank of Japan’s policy? The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance. How do Bank of Japan’s decisions influence the Japanese Yen? The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance. Why did the Bank of Japan decide to start unwinding its ultra-loose policy? A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
We have stated our determination to address excessive volatility when we launched Japan-US joint intervention.
No comment on BoJ policy.
Expect BoJ to closely coordinate with government and conduct appropriate monetary policy to achieve 2% price target.
Expect BoJ to steer policy properly to achieve stable, sustainable 2% inflation.Market reactionAt the time of writing, the USD/JPY pair is down 0.10% on the day at 156.10. Bank of Japan FAQs What is the Bank of Japan? The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%. What has been the Bank of Japan’s policy? The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance. How do Bank of Japan’s decisions influence the Japanese Yen? The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance. Why did the Bank of Japan decide to start unwinding its ultra-loose policy? A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
06:48 Gold stalls recovery from six-week low as USD preserves post-Fed gains amid Iran risks
Gold (XAU/USD) attracts some buyers during the Asian session on Thursday, though it struggles to find acceptance above the $4,300 mark and remains close to a near six-week low, touched the previous day.
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The US Dollar (USD) touches a fresh high since late July in the wake of the Federal Reserve's (Fed) hawkish outlook. Moreover, escalating Middle East tensions support the safe-haven Greenback, which, in turn, is seen as a key factor acting as a headwind for the bullion.The US central bank voted unanimously to raise interest rates for the first time since 2023 at the conclusion of the September policy meeting on Wednesday. The decision was in line with the broader consensus and was accompanied by a more hawkish outlook. In fact, the so-called dot plot revealed that Fed officials expect one more interest rate increase this year. At the post-meeting press conference, Fed Chair Kevin Warsh said that the decision was led by a strengthening US economy, a lack of improvement in summer inflation trends, and geopolitics.Warsh added that inflation is too high and has been for too long, while underscoring the importance of stabilizing consumer prices to grow the US economy. Furthermore, inflation risks stemming from persistently high energy prices underpin prospects for further tightening by the Fed and remain supportive of elevated US bond yields. In fact, the yield on the benchmark 10-year US Treasury hovers near the 5.0% psychological mark and close to its highest level since April 2007. This, along with escalating tensions in the Middle East, underpins the safe-haven USD.In the latest developments, Iran-backed Houthi rebels said that Saudi aircraft have carried out more than 450 air strikes across Yemen in the past week and claimed that they shot down a Saudi F-15 fighter jet over Marib province. Meanwhile, US President Donald Trump claimed that Iran wants to strike a deal and that the war may be nearing its end. Nevertheless, intensifying fighting between the Houthi group and Saudi Arabia keeps the geopolitical risk premium in play, supporting oil prices and the Greenback. This warrants caution for XAU/USD bulls.XAU/USD daily chartTechnical AnalysisThe precious metal maintains a bearish near-term bias below the $4,315-$4,320 confluence – comprising the 50% retracement of the June-August upswing and the 100-day Simple Moving Average (SMA). The said area should act as a key pivotal point, above which the XAU/USD pair could climb to the 38.2% level near $4,404 and the 23.6% retracement at $4,513 en route to the broader cycle high zone at $4,690.On the downside, immediate support is seen at the 61.8% Fibonacci retracement at $4,226, followed by the deeper 78.6% level at $4,100 and the structural floor around the prior swing low near $3,940.20. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator stays in negative territory with the line below its signal line and a contracting bearish histogram. The Relative Strength Index (RSI) hovers around 44, hinting at waning downside momentum but not yet challenging the prevailing corrective tone.(The technical analysis of this story was written with the help of an AI tool. Know more.) US Dollar Price This week The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Japanese Yen. USD EUR GBP JPY CAD AUD NZD CHF USD 1.22% 1.17% 1.65% 0.88% 0.85% 1.64% 1.20% EUR -1.22% -0.07% 0.43% -0.35% -0.36% 0.41% -0.03% GBP -1.17% 0.07% 0.50% -0.25% -0.30% 0.49% 0.02% JPY -1.65% -0.43% -0.50% -0.78% -0.83% -0.08% -0.51% CAD -0.88% 0.35% 0.25% 0.78% 0.00% 0.76% 0.29% AUD -0.85% 0.36% 0.30% 0.83% -0.01% 0.77% 0.33% NZD -1.64% -0.41% -0.49% 0.08% -0.76% -0.77% -0.46% CHF -1.20% 0.03% -0.02% 0.51% -0.29% -0.33% 0.46% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
06:43 EUR/JPY Price Forecast: Slips below 179.00 as bearish bias prevails
EUR/JPY declines after three days of gains, trading around 178.90 during Asian hours on Thursday. Technical analysis of the daily chart shows the currency cross trading within a descending channel, keeping the overall bearish bias.
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06:22 Fed Policy Monitor: Hiking bias and curve reaction – NBC Economics and Strategy
NBC Economics and Strategy, authored by Taylor Schleich and Ethan Currie, reviews the latest Federal Reserve decision following strong CPI data. The Fed delivered a widely expected rate hike and signaled support for restrictive policy for a prolonged period.
NBC Economics and Strategy, authored by Taylor Schleich and Ethan Currie, reviews the latest Federal Reserve decision following strong CPI data. The Fed delivered a widely expected rate hike and signaled support for restrictive policy for a prolonged period. Their dot plot shows policy rates staying above 3.5%–3.75% until late 2029, flattening the curve as front-end yields rise while long-end yields hold steady.Fed stance, dots and curve dynamics"After last week’s CPI report, there was little doubt about this one. A hike today was widely expected but this doesn’t appear to be a meek or reluctant rate increase (even though the Fed held out for a long time before tightening). Based on an upwardly revised dot plot, there seems to be relatively broad support for more restrictive monetary policy for a significant period of time—the Fed doesn’t see a return to a 3.5% to 3.75% range until the end of 2029.""This supported a significant flattening of the curve with front-end yields rising and long-end yields holding steady. Not surprisingly, Warsh was at pains to stress his commitment to delivering price stability. But unlike prior decisions, the bulk of the market move came before the Chair spoke, with this presser proving relatively uneventful.""The market reaction is not surprising based on what was delivered/signalled. But the Fed will still need to follow through on this hiking bias for the longer-end to remain somewhat contained. We do believe that further tightening is in store, likely at the next decision in late October.""From there however, the outlook becomes a bit more muddied. Despite Warsh’s outwardly hawkish stance, the Fed has demonstrated time and again that they’ll err on the side of accommodation. That doesn’t mean they’ll be easing early next year but if inflation begins to cool (as it’s widely expected to), we think it’ll be difficult to build a consensus around hiking a third (or fourth, or fifth, etc.) time.""We see a 4.25% upper bound target representing the peak of what could be a brief tightening cycle. Eventual cuts may be dictated by the sustainability of the economic expansion (i.e., the AI boom). Relative to the very gradual easing path laid out in this dot plot, we think risks are skewed to earlier and more significant rate cuts."(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
06:20 United States rates: Yields seen contained, steepeners favoured – TD Securities
TD Securities analysts highlight that the Federal Reserve’s 25bp hike and hawkish projections have boosted its inflation-fighting credibility, making nominal and real US rates attractive.
TD Securities analysts highlight that the Federal Reserve’s 25bp hike and hawkish projections have boosted its inflation-fighting credibility, making nominal and real US rates attractive. They see limited upside for 10-year yields due to already-hawkish pricing and growth concerns, and argue that a re-flattening curve creates opportunities to enter steepeners over the coming months.Attractive yields and curve steepeners"Rates: While yields could test higher in the very short term, nominal and real rates remain attractive.""Already-hawkish Fed pricing, increased inflation-fighting credibility, and worries about higher rates impacting growth, should help keep 10y yields contained.""The re-flattening of the curve also offers an opportunity for investors to enter steepeners, which should remain the path of least resistance in the coming months."(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
06:20 Canadian Dollar slides to five-week low after Fed’s hawkish decision
The Canadian Dollar (CAD) trades weakly against the US Dollar (USD) on Thursday. In the Asian session, the USD/CAD pair posts a fresh five-week high to near 1.4000.
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.fxs-event-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left}.fxs-event-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-event-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-event-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:12px}.fxs-event-module-section:last-child{border:none;margin-bottom:0}.fxs-event-module-header{color:#1b1c23;font-weight:700;font-size:16px;font-style:normal;line-height:20px;margin:0;padding:4px 0;background-color:#fff;border:none;position:relative;padding-right:32px}.fxs-event-module-header label{cursor:pointer;display:block}.fxs-event-module-header label:after,.fxs-event-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-event-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-event-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-event-module-container input[type=checkbox]{display:none}.fxs-event-module-container input[type=checkbox]:checked+.fxs-event-module-section .fxs-event-module-header label:after{transform:rotate(45deg) translateX(4px)}.fxs-event-module-container input[type=checkbox]:checked+.fxs-event-module-section .fxs-event-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-event-module-content{color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0;margin-top:8px}.fxs-event-module-content.why-matters{max-height:0;overflow:hidden;transition:all .3s ease-in-out}.fxs-event-module-container input[type=checkbox]:checked+.fxs-event-module-section .fxs-event-module-content.why-matters{max-height:1000px;margin-top:8px}.fxs-event-module-calendar-title{color:#1b1c23;font-size:17.6px;font-family:Roboto;font-style:normal;font-weight:700;line-height:20.8px;margin:4px 0 0 0}.fxs-event-module-calendar-title-description-wrapper{display:flex;flex-direction:column;gap:12px;border-bottom:1px solid #ececf1;padding-bottom:16px;margin-bottom:16px}.fxs-event-module-inner-calendar{padding:16px}.fxs-event-module-inner-calendar .fxs-event-module-section{padding:0}.fxs-event-module-inner-calendar .fxs-event-module-header{font-size:12.8px;line-height:17px}.fxs-event-module-read-more{display:flex;align-items:center;align-content:center;gap:4px;color:#e4871b;font-size:12.8px;font-family:Roboto;font-style:normal;font-weight:700;line-height:17px;text-decoration:none}.fxs-event-module-read-more svg{width:16px;height:16px}.fxs-event-module-read-more:hover span{text-decoration:underline}.fxs-event-module-release{margin:0;display:flex;flex-direction:column;gap:2px}.fxs-event-module-release>p{font-size:12.8px;font-family:Roboto;font-style:normal;line-height:17px;margin:0}.fxs-event-module-release>p>strong{color:#8c8d91;font-weight:700}.fxs-event-module-release>p>span{color:#8c8d91;font-weight:400}.fxs-event-module-release>p>a{color:#e4871b;font-weight:700;text-decoration:none}.fxs-event-module-release>p>a:hover>span{text-decoration:underline}.fxs-event-module-inner-calendar .fxs-event-module-container{margin:16px 0 0 0;border-top:1px solid #ececf1;padding:12px 0 0 0}@media (min-width:680px){.fxs-event-module-inner-calendar .fxs-event-module-header{font-size:14.72px;line-height:20px}.fxs-event-module-release p{font-size:14.72px;line-height:20px}.fxs-event-module-read-more{font-size:14.72px;line-height:20px}.fxs-event-module-calendar-title{font-size:22.4px;line-height:25.6px}.fxs-event-module-title{font-size:19.2px;line-height:27.2px}.fxs-event-module-header{font-size:19.2px;line-height:25.92px}.fxs-event-module-content{font-size:16px;line-height:21.6px}}The Canadian Dollar is under pressure against the US Dollar after the Fed’s monetary policy decision.Traders have raised hawkish Fed bets as the central bank warns of upside inflation risks.Oil prices struggle to sustain above the $100 mark.The Canadian Dollar (CAD) trades weakly against the US Dollar (USD) on Thursday. In the Asian session, the USD/CAD pair posts a fresh five-week high to near 1.4000. The Loonie pair gains significantly as the US Dollar outperforms, following the Federal Reserve’s (Fed) monetary policy announcement on Wednesday. US Dollar Price This week The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the New Zealand Dollar. USD EUR GBP JPY CAD AUD NZD CHF USD 1.22% 1.17% 1.61% 0.88% 0.86% 1.64% 1.19% EUR -1.22% -0.07% 0.41% -0.35% -0.35% 0.41% -0.03% GBP -1.17% 0.07% 0.48% -0.25% -0.28% 0.49% 0.00% JPY -1.61% -0.41% -0.48% -0.77% -0.81% -0.07% -0.51% CAD -0.88% 0.35% 0.25% 0.77% 0.02% 0.76% 0.28% AUD -0.86% 0.35% 0.28% 0.81% -0.02% 0.77% 0.31% NZD -1.64% -0.41% -0.49% 0.07% -0.76% -0.77% -0.48% CHF -1.19% 0.03% -0.01% 0.51% -0.28% -0.31% 0.48% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades firmly near Thursday’s high at around 100.33.In the policy meeting, the Fed hiked interest rates by 25 basis points (bps) to 3.75%-4.00%, as expected, after remaining on hold in the last five meetings.Financial market participants have raised hawkish Fed bets after remarks from Chairman Kevin Warsh that prices pressures are significantly higher for a long time. However, he didn’t deliver any guidance on the monetary policy outlook, as expected.According to the CME FedWatch tool, the odds of the Fed delivering at least two interest rate hikes by the year-end have increased to 88.7% from 79% seen before the policy announcement.On the Canadian Dollar front, a pause in the oil price rally has also weighed some pressure. Oil prices struggle to extend the rally above $100, diminishing the appeal of currencies from economies, such as Canada, which are net energy expoerter.USD/CAD Technical AnalysisIn the daily chart, USD/CAD trades at 1.3992. The pair holds above the 20-period Exponential Moving Average (EMA) at 1.3890, keeping the near-term bias bullish as price also sits above a dense Fibonacci support band, including the 38.2% retracement at 1.3980 and the 50.0% level at 1.3898. The Relative Strength Index (14) at 61.2 points to firm, though not extreme, bullish momentum, suggesting buyers remain in control while the latest rebound extends away from the recent lows.On the downside, immediate support is clustered around the 38.2% Fibonacci retracement at 1.3980, followed by the 50.0% level at 1.3898 and the 20-period EMA at 1.3890, with deeper cushions at the 61.8% retracement at 1.3816 and the 78.6% level at 1.3699. On the topside, initial resistance emerges at the 23.6% Fibonacci retracement at 1.4082, ahead of the cycle high anchor near 1.4247, where a break would be needed to unlock a more extended bullish phase.(The technical analysis of this story was written with the help of an AI tool. Know more.) Economic Indicator Fed Interest Rate Decision The Federal Reserve (Fed) deliberates on monetary policy and makes a decision on interest rates at eight pre-scheduled meetings per year. It has two mandates: to keep inflation at 2%, and to maintain full employment. Its main tool for achieving this is by setting interest rates – both at which it lends to banks and banks lend to each other. If it decides to hike rates, the US Dollar (USD) tends to strengthen as it attracts more foreign capital inflows. If it cuts rates, it tends to weaken the USD as capital drains out to countries offering higher returns. If rates are left unchanged, attention turns to the tone of the Federal Open Market Committee (FOMC) statement, and whether it is hawkish (expectant of higher future interest rates), or dovish (expectant of lower future rates). Read more. Last release: Wed Sep 16, 2026 18:00 Frequency: Irregular Actual: 4% Consensus: 4% Previous: 3.75% Source: Federal Reserve
06:17 Federal Reserve: Policy path reshaped – Rabobank
Rabobank’s RaboResearch Global Economics & Markets team reviews the latest FOMC decision, noting a unanimous 25 bps hike in the federal funds rate. The Committee’s projections point to one more hike this year, then a prolonged hold through 2027, with the first cut in 2028.
Rabobank’s RaboResearch Global Economics & Markets team reviews the latest FOMC decision, noting a unanimous 25 bps hike in the federal funds rate. The Committee’s projections point to one more hike this year, then a prolonged hold through 2027, with the first cut in 2028. The report highlights a higher neutral rate, a steeper policy path, and the Fed’s determination to protect its monetary policy independence under Chair Warsh.Fed hikes and long hold signalled"Today the FOMC unanimously decided to raise the target range for the federal funds rate by 25 bps.""The Committee’s projections showed that they anticipate another hike before the end of the year, before remaining on hold through 2027. The first cut is expected in 2028.""The new set of economic projections essentially showed a new reaction function with a much higher policy rate trajectory needed for a similar inflation outcome. This was underlined by an upward revision of the neutral rate.""Overall, the main message from today’s FOMC decision, projections and press conference is that the Committee is committed to defend its monetary policy independence.""In fact, the projections suggest that by the time that President Trump leaves office, the Fed’s policy rate will be higher than when Chair Warsh started."(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
05:52 United States Dollar Index holds gains above 100.00 as Fed signals further tightening
The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is extending its winning streak for the sixth successive day and trading around 100.30 during Asian hours on Thursday. The US Initial Jobless Claims data will be released later in the day.
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The US Initial Jobless Claims data will be released later in the day.The Greenback remains on a firm footing following an interest rate hike by the US Federal Reserve (Fed), alongside signals that another increase could follow before the end of the year. The central bank raised the federal funds rate by 25 basis points to a target range of 3.75% to 4.00%. The move matched market expectations, representing the Fed's first interest rate increase in three years.In his post-meeting remarks, Fed Chair Kevin Warsh explained that the rate hike was driven by inflation remaining "too high" and lingering "for too long," describing the action as a "sober" and "responsible decision." Warsh signaled that further rate increases remain on the table in an effort to curb persistent price pressures. Following the announcements, money markets priced in roughly a 49.8% probability of another Fed rate hike at the October meeting, according to the CME FedWatch tool.Fed’s Warsh underscores inflation fight as economy strength allows focus on price stabilityWarsh’s press conference tone was distinctly hawkish, with the 7.4/10 FXS Speechtracker score modestly above the 7/10 historical average, signaling a firmer commitment to tightening policy relative to the established baseline. By stressing that “because of underlying strength of the economy we can afford to focus on price stability” and that “today we took a step toward delivering price stability,” the remarks framed the latest move as a deliberate removal of accommodation driven by persistent inflation trends rather than data noise. Emphasis on full employment, non-restrictive financial conditions, and the primacy of price stability reinforces a narrative that the FED is prepared to keep the pressure on inflation, a backdrop typically supportive of the Dollar and negative for risk-sensitive FX.The FXS Fed Sentiment Index jumped by +26.07 points to 151.79, firmly in hawkish territory and consistent with the above-baseline FXS Speechtracker score. A reading this far above the neutral 100 mark signals that markets should interpret the decision and tone as a clear hawkish shift, with expectations for tighter policy and a stronger Dollar relative to lower-yielding peers.Technical Analysis:In the daily chart, Dollar Index Spot trades at 100.30. The near-term bias is bullish as price holds above both the 50- and nine-day Exponential Moving Averages (EMAs), suggesting a constructive recovery after the recent dip. The 14-day Relative Strength Index (RSI) at 63.58 is approaching overbought territory, hinting that buyers retain control but could face some fatigue if the index extends its advance too quickly, while the elevated FXS Fed Sentiment Index at 151.79 reinforces a supportive policy backdrop for the dollar.On the downside, initial support is seen at the 50-day EMA at 99.69, followed closely by the shorter nine-day EMA at 99.64, forming a tight demand area that would need to give way to signal a deeper corrective phase. As long as the Dollar Index Spot holds above these moving averages, the technical structure favors further upside, with the psychological 100.00 area now acting as an intermediate floor rather than a cap in the current bullish setup.(The technical analysis of this story was written with the help of an AI tool. Know more.) US Dollar FAQs What is the US Dollar? The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022.
Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away. How do the decisions of the Federal Reserve impact the US Dollar? The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates.
When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback. What is Quantitative Easing and how does it influence the US Dollar? In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system.
It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar. What is Quantitative Tightening and how does it influence the US Dollar? Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
05:26 Euro weakens to near 1.1450 as Fed raises rate for first time in three years
The EUR/USD pair declines to around 1.1460 during Asian trading hours on Thursday. The Euro (EUR) weakens against the US Dollar (USD) following an interest rate hike from the US Federal Reserve (Fed). The US Initial Jobless Claims data will be released later on Thursday.
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Fed raised interest rates and signaled further increases in borrowing costs in the coming months.ECB emphasized a data-dependent approach and won’t pre-commit to further steps on rates. The EUR/USD pair declines to around 1.1460 during Asian trading hours on Thursday. The Euro (EUR) weakens against the US Dollar (USD) following an interest rate hike from the US Federal Reserve (Fed). The US Initial Jobless Claims data will be released later on Thursday. The US central bank raised the benchmark interest rate by 25 basis points (bps) to a 3.75%–4.00% range at its September policy meeting on Wednesday, as widely expected. This marks the Fed’s first interest rate hike in three years.Fed Chairman Kevin Warsh said during the press conference that inflation has been “too high ... for too long.” Updated projections the committee showed that a strong majority of Fed officials think another hike is possible later this year."Today’s decisive hike—supported by all FOMC members and paired with an upgrade in the 'dot plot' summary of economic projections—should go a long way toward restoring confidence in the Fed’s commitment to fighting inflation, and help remove a major headwind keeping the dollar restrained," said Karl Schamotta, chief market strategist at Corpay in Toronto.Across the pond, the European Central Bank (ECB) raised its key interest rates by 25 bps last week. The central bank reiterated it won’t pre-commit to further steps after raising rates for a second time since the Iran war started. ECB President Christine Lagarde said that Eurozone inflation will stay elevated for some time and acknowledged the split in rate pricing.Eurozone inflation concerns tempered as ECB questions market rate assumptionsStrategists at Rabobank highlight that the ECB is already pushing back against the pace of market repricing. They note that in her press conference last week, President Lagarde “refused to reaffirm that markets ‘understand the ECB’s reaction function well,’” which Rabobank construes “as a hint that the market may be moving faster than the policymakers like.” At the same time, the bank stresses that, “even though energy-driven inflation is set to increase further, price pressures are still mostly driven by that supply shock and there is no evidence that inflation is spreading,” suggesting the ECB may be less inclined to validate the more aggressive tightening path implied by current market pricing.Technical Analysis: EUR/USD retains a negative outlook below the 100-day SMAIn the daily chart, EUR/USD retains a bearish near‑term bias as spot remains decisively below the 100‑day moving average (MA) and the Bollinger Bands (20) middle line. Price is also holding under the lower Bollinger Band, underscoring downside pressure, while the Relative Strength Index (14) around 31.9 hovers in oversold territory, suggesting that although the pair is stretched on the downside, selling interest still dominates as long as these overhead levels cap recovery attempts.On the topside, initial resistance aligns with the lower Bollinger Band at 1.1485, followed by the 100‑day MA at 1.1550, which reinforces the broader bearish structure. Above that, the Bollinger middle band at 1.1605 and the upper band near 1.1720 form a wider resistance corridor, where any stronger corrective bounce would likely stall unless buyers reclaim and sustain levels beyond this cluster.(The technical analysis of this story was written with the help of an AI tool. Know more.) Euro FAQs What is the Euro? The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day.
EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%). What is the ECB and how does it impact the Euro? The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy.
The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa.
The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde. How does inflation data impact the value of the Euro? Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control.
Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money. How does economic data influence the value of the Euro? Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency.
A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall.
Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy. How does the Trade Balance impact the Euro? Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
04:59 Silver Price Forecast: XAG/USD rises to near $64.00 as oil prices decline
Silver price (XAG/USD) gains ground after posting losses the previous day, trading around $63.80 per troy ounce during the Asian hours on Thursday. The white metal finds support as oil prices retreated amid easing concerns over supply disruptions and inflation.
Silver rises as lower oil prices soften inflation fears, offering underlying support to non-yielding precious metals.Drone attacks damaged Saudi Arabia's East-West pipeline, though partial recovery is expected within days.Headwinds persist as the Federal Reserve raised interest rates by 25 basis points and signaled further hikes.Silver price (XAG/USD) gains ground after posting losses the previous day, trading around $63.80 per troy ounce during the Asian hours on Thursday. The white metal finds support as oil prices retreated amid easing concerns over supply disruptions and inflation.The pullback in crude prices followed reports that Saudi Arabia plans to restore roughly half the capacity of its East-West pipeline within days and return to full operation within six weeks. The key pipeline, which offers an alternative export route bypassing the vulnerable Strait of Hormuz, was damaged in drone attacks last week. In the interim, Saudi Arabia has ramped up efforts to transport larger crude volumes through the strait with assistance from the US military.Silver may face ongoing headwinds as the US Federal Reserve raised interest rates and signaled another hike before the end of the year. The Fed increased the federal funds rate by 25 basis points to a target range of 3.75% to 4.00%, as expected, marking its first interest rate increase in three years and raising the opportunity cost of holding non-yielding precious metals.Fed Chair Kevin Warsh said that the move was because "inflation is too high and has been for too long", adding that it was a "sober" and "responsible decision.” Warsh signaled the rate could be increased further in a bid to slow rising prices. Money markets priced in about a 49.8% chance of a Fed hike in October, according to the CME FedWatch tool.Technical Analysis:In the daily chart, XAG/USD trades at $63.80, with a bearish near-term bias as price holds below both the nine- and 50-period Exponential Moving Averages (EMAs). The alignment of short- and medium-term EMAs above spot hints that recent rebounds are being capped, while the 14-day Relative Strength Index (RSI) easing to 47.3 reinforces a consolidative-to-soft tone rather than outright oversold conditions.On the topside, immediate resistance is seen at the nine-period EMA at $64.36, followed by the 50-period EMA at $64.70, where a sustained break would be needed to reopen a stronger bullish phase. On the downside, momentum support is located around the RSI reading near 47, where a deeper slide in price coupled with a drop in RSI toward 40 would likely signal intensifying bearish pressure for silver.XAG/USD: Daily Chart(The technical analysis of this story was written with the help of an AI tool. Know more.)
04:54 Japanese Yen edges higher vs bullish USD amid expectations of a more hawkish BoJ
The USD/JPY pair edges lower during the Asian session on Thursday, snapping a three-day winning streak and eroding a part of the previous day's gains to a nearly two-week high.
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Spot prices currently trade around the 156.00 mark as the focus now shifts to the highly anticipated Bank of Japan (BoJ) rate decision on Friday.The Japanese central bank is universally expected to raise its benchmark interest rate by 25 basis points (bps) to a 31-year high of 1.25% at the end of the September policy meeting. Moreover, traders have been pricing in a greater chance of a follow-through up move in December amid inflation risks stemming from higher energy prices. This, in turn, is seen as offering some support to the Japanese Yen (JPY) and weighing on the USD/JPY pair.Meanwhile, the US Dollar (USD) touches a fresh high since late July in the wake of the US Federal Reserve's (Fed) hawkish rate hike on Wednesday. In fact, the US central bank raised borrowing costs for the first rate hike in over three years, and the so-called dot plot indicated one more interest rate increase this year. Moreover, oil-driven inflation fears underpin prospects for further Fed tightening, supporting the USD and the USD/JPY pair.Apart from this, escalating Middle East tensions further underpin the safe-haven buck. In the latest developments, Iran-backed Houthi rebels said that Saudi aircraft have carried out more than 450 air strikes across Yemen in the past week and claimed that they shot down a Saudi F-15 fighter jet over Marib province. This keeps geopolitical risks premium in play, favouring USD bulls and contributing to limiting the downside for the USD/JPY pair.USD/JPY 4-hour chartTechnical AnalysisThe USD/JPY pair retains a bearish near-term bias below the 156.60-156.65 confluence – comprising the 100-period Simple Moving Average (SMA) on the 4-hour chart and the 50.0% Fibonacci retracement. Further up, barriers are seen at the 61.8% level at 157.55 and the 78.6% retracement near 158.81 ahead of the swing high at 160.42. The setup, however, suggests that rallies remain vulnerable while the broader corrective phase from the cycle top persists. On the downside, initial support emerges at the 38.2% retracement at 155.78, ahead of the 23.6% level at 154.68, while a deeper pullback would expose the structural floor around 152.91.(The technical analysis of this story was written with the help of an AI tool. Know more.) Bank of Japan FAQs What is the Bank of Japan? The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%. What has been the Bank of Japan’s policy? The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance. How do Bank of Japan’s decisions influence the Japanese Yen? The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance. Why did the Bank of Japan decide to start unwinding its ultra-loose policy? A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
04:50 US President Donald Trump says he told Fed Chair to 'do what you want' ahead of rate hike
US President Donald Trump said that he counseled Federal Reserve (Fed) Chair Kevin Warsh to vote for an interest rate hike because other Fed policymakers were expected to vote that way anyway, the Washington post reported on Wednesday.
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US President Donald Trump said that he counseled Federal Reserve (Fed) Chair Kevin Warsh to vote for an interest rate hike because other Fed policymakers were expected to vote that way anyway, the Washington post reported on Wednesday."I told Kevin, I said, 'You might as well vote with the board because it's just not going to matter. . . . The board is very hostile,” said Trump. "They're very political. They're doing the wrong thing. They're a bunch of politicians. They are people put on by politicians,” he added.Trump further stated that he doesn't expect Warsh to follow his directions, saying he wanted the Fed "to be independent.”His comments came hours after Fed officials voted unanimously to raise the interest rates by 25 basis points (bps) for the first time in three years.Market reactionAt the time of writing, the US Dollar Index (DXY) is up 0.03% on the day at 100.35. Fed FAQs What does the Federal Reserve do, how does it impact the US Dollar? Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates.
When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money.
When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback. How often does the Fed hold monetary policy meetings? The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions.
The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis. What is Quantitative Easing (QE) and how does it impact USD? In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system.
It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar. What is Quantitative Tightening (QT) and how does it impact the US Dollar? Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
04:19 Australian Dollar holds gains near 0.7100 despite Fed rate hike, IMF urges RBA to stay hawkish
The AUD/USD pair gains ground to around 0.7090 during the early Asian trading hours on Thursday. Traders continue to assess the Federal Reserve (Fed) interest rate hike and US President Donald Trump’s comments. The US Initial Jobless Claims data will be published later on Thursday.
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The Fed decided to increase the benchmark rate to a range of 3.75% to 4.0% on Wednesday.IMF said the RBA should stand ready to hike rates as needed, citing inflation upside risks. The AUD/USD pair gains ground to around 0.7090 during the early Asian trading hours on Thursday. Traders continue to assess the Federal Reserve (Fed) interest rate hike and US President Donald Trump’s comments. The US Initial Jobless Claims data will be published later on Thursday. The Fed raises the interest rates for the first time in three years to 3.75%-4.0% on Wednesday, as widely expected. Fed Chair Kevin Warsh said that the move was because "inflation is too high and has been for too long", adding that it was a "sober" and "responsible decision.” Warsh signaled the rate could be increased further in a bid to slow rising prices. Money markets priced in about a 49.8% chance of a Fed hike in October, according to the CME FedWatch tool. “That’s hawkish. If the chair thinks policy is accommodative, then you’ve got more work to do,” said Michael Gapen, chief US economist for Morgan Stanley.Nonetheless, Trump demanded the US central bank slash interest rates to 1% “or less.” “We are ‘carrying’ almost every country in the World, and that cannot go on any longer,” Trump wrote in a Truth Social post.The Reserve Bank of Australia (RBA) has held the Official Cash Rate (OCR) at 4.35%, following three consecutive hikes earlier this year. Markets are now pricing in nearly 76% odds that the Australian central bank will raise the Official Cash Rate (OCR) to 4.60% at the next RBA Board meeting, according to RBA Rate Tracker.The International Monetary Fund (IMF) stated that the RBA should stand ready to hike interest rates given inflation risks remain tilted to the upside, adding that the government could also support disinflation by reining in spending. Aussie downside bias persists as UOB keeps focus on 0.7100 supportStrategists at UOB Group maintain their cautious medium-term stance on AUD/USD, reiterating their “1-3 weeks view” that, “while further weakness is not ruled out, short-term conditions are oversold, and AUD must close below 0.7100 before a move to 0.7050 can be expected.” They add that the “likelihood of AUD closing below 0.7100 will remain intact as long as AUD holds below the ‘strong resistance’ at 0.7175,” with both levels unchanged from their prior assessment.Technical Analysis: AUD/USD maintains a negative tone in the near termIn the daily chart, AUD/USD holds a bearish near-term bias as price remains beneath the 20-day Bollinger Bands’ middle line, while the 100-day simple moving average (SMA) offers initial underlying support just below the market. Momentum has cooled, with the 14-day Relative Strength Index (RSI) slipping toward the low-40s, which hints at waning bullish pressure rather than outright oversold conditions.On the topside, immediate resistance is seen at the lower Bollinger band near 0.7095, followed by the Bollinger SMA center around 0.7166 and the upper band close to 0.7240, forming a broad cap above current levels. On the downside, the 100-day SMA at 0.7080 marks the first support level; a sustained break beneath this floor would likely open the path toward lower daily closes and reinforce the prevailing bearish tone.(The technical analysis of this story was written with the help of an AI tool. Know more.) Australian Dollar FAQs What key factors drive the Australian Dollar? One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD. How do the decisions of the Reserve Bank of Australia impact the Australian Dollar? The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive. How does the health of the Chinese Economy impact the Australian Dollar? China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs. How does the price of Iron Ore impact the Australian Dollar? Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD. How does the Trade Balance impact the Australian Dollar? The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
04:18 WTI remains below $97.50 as Saudi routes recover, US stocks shrink less than expected
West Texas Intermediate (WTI) oil price extends its losses for the second successive day, trading around $96.60 per barrel during the Asian hours on Thursday.
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Crude oil prices fall following reports that Saudi Arabia plans to restore roughly half the capacity of its East-West pipeline within days and achieve full operation within six weeks. The vital pipeline, which provides an alternative export route around the vulnerable Strait of Hormuz, suffered damage during drone attacks last week.Meanwhile, Saudi Arabia has stepped up efforts to transport larger volumes of crude through Hormuz with assistance from the US military. Further easing supply concerns, US Energy Secretary Chris Wright confirmed that 18 million barrels of crude and petroleum products successfully passed through the Strait of Hormuz earlier this week.Adding to the downward pressure on prices, the US Energy Information Administration (EIA) reported a smaller-than-expected draw from domestic crude inventories for the previous week.EIA data showed that crude oil stocks in the top-producing nation fell by approximately 640,000 barrels. This drop was significantly lower than the 1.62 million-barrel draw energy analysts had anticipated in a Reuters poll, signaling softer demand or higher supply buffers than market expectations had priced in.Middle East posture seen keeping oil’s geopolitical premium elevatedAccording to TD Securities, the configuration of US policy and military engagement in the region will be critical for crude markets. The bank argues that “a less aggressive or supportive military presence in the Middle East would see an elevated geopolitical risk premium remain in markets,” as Iran would likely seek to “consolidate control over the Strait,” reinforcing the potential for persistent supply-side anxiety in Oil. WTI Oil FAQs What is WTI Oil? WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media. What factors drive the price of WTI Oil? Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa. How does inventory data impact the price of WTI Oil The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency. How does OPEC influence the price of WTI Oil? OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
04:15 PBOC sets USD/CNY reference rate at 6.7580 vs. 6.7628 previous
The People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead on Thursday at 6.7580 compared to the previous day's fix of 6.7628 and 6.7241euters estimate.
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The People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead on Thursday at 6.7580 compared to the previous day's fix of 6.7628 and 6.7241euters estimate. PBOC FAQs What does the People's Bank of China do? The primary monetary policy objectives of the People's Bank of China (PBoC) are to safeguard price stability, including exchange rate stability, and promote economic growth. China’s central bank also aims to implement financial reforms, such as opening and developing the financial market. Who owns the PBoC? The PBoC is owned by the state of the People's Republic of China (PRC), so it is not considered an autonomous institution. The Chinese Communist Party (CCP) Committee Secretary, nominated by the Chairman of the State Council, has a key influence on the PBoC’s management and direction, not the governor. However, Mr. Pan Gongsheng currently holds both of these posts. What are the main policy tools used by the PBoC? Unlike the Western economies, the PBoC uses a broader set of monetary policy instruments to achieve its objectives. The primary tools include a seven-day Reverse Repo Rate (RRR), Medium-term Lending Facility (MLF), foreign exchange interventions and Reserve Requirement Ratio (RRR). However, The Loan Prime Rate (LPR) is China’s benchmark interest rate. Changes to the LPR directly influence the rates that need to be paid in the market for loans and mortgages and the interest paid on savings. By changing the LPR, China’s central bank can also influence the exchange rates of the Chinese Renminbi. Are private banks allowed in China? Yes, China has 19 private banks – a small fraction of the financial system. The largest private banks are digital lenders WeBank and MYbank, which are backed by tech giants Tencent and Ant Group, per The Straits Times. In 2014, China allowed domestic lenders fully capitalized by private funds to operate in the state-dominated financial sector.
04:04 British Pound languishes near late July lows as hawkish Fed underpins USD ahead of BoE
The GBP/USD pair enters a bearish consolidation phase during the Asian session on Thursday and currently trades around the 1.3380-1.3375 region, near the lowest level since July 30.
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Traders now seem hesitant and opt to wait for the Bank of England (BoE) rate decision before placing fresh directional bets.Policymakers at the BoE are expected to keep interest rates steady at the conclusion of the September meeting, suggesting that the focus will be on the forward guidance amid rising energy prices due to the prolonged Middle East conflict. Market players are currently pricing in an 80% chance of a hike in November, the first of around four expected over the next year. Nevertheless, the outlook will play a key role in influencing the British Pound (GBP) and provide some impetus to the GBP/USD pair.BoE expected to hold but signal November hike riskAnalysts at MUFG/BTMU expect the BoE to deliver what they describe as a "fairly hawkish hold" at tomorrow’s meeting, using the decision to "provide a signal that a rate hike in November is on the cards if energy pricing remains elevated." They have "pencilled in a 6-3 vote again," while cautioning that "a 5-4 split would be no surprise, with Lombardelli being the most likely to join the dissenters." Overall, MUFG/BTMU judge that "for now, a majority on the MPC is likely to believe that a ‘wait-and-see’ approach is still tenable," even as the Committee keeps the door open to further tightening later in the year.Heading into the key central bank event, the US Dollar (USD) is seen consolidating near its highest level since late July and offers some support to the currency pair. However, the US Federal Reserve's (Fed) hawkish stance, along with Middle East jitters, favors USD bulls and should keep a lid on any meaningful recovery for the GBP/USD pair. The US central bank decided to raise the policy rate by 25 basis points (bps) on Wednesday, as anticipated, and signaled a follow-up move by the end of this year.Meanwhile, the US-Iran standoff keeps the geopolitical risk premium in play and should further underpin the safe-haven buck. This, in turn, suggests that the path of least resistance for the GBP/USD pair remains to the downside and any recovery attempt is more likely to be sold into. Even from a technical perspective, the overnight breakdown below the very important 200-day Simple Moving Average (SMA) validates the negative outlook, warranting some caution for aggressive bullish traders.GBP/USD daily chartTechnical AnalysisThe GBP/USD pair holds a bearish near-term bias below the 200-day Simple Moving Average (SMA) at 1.3454. Moreover, spot prices have slipped back under the key 38.2% Fibonacci retracement area, suggesting that rallies could stay capped beneath the 50% Fibo. and the 100-SMA confluence. On the downside, immediate support emerges at the 61.8% Fibo retracement at 1.3346, ahead of a deeper floor at the 78.6% level near 1.3256 and the prior cycle low region around 1.3141. (The technical analysis of this story was written with the help of an AI tool. Know more.) BoE FAQs What does the Bank of England do and how does it impact the Pound? The Bank of England (BoE) decides monetary policy for the United Kingdom. Its primary goal is to achieve ‘price stability’, or a steady inflation rate of 2%. Its tool for achieving this is via the adjustment of base lending rates. The BoE sets the rate at which it lends to commercial banks and banks lend to each other, determining the level of interest rates in the economy overall. This also impacts the value of the Pound Sterling (GBP). How does the Bank of England’s monetary policy influence Sterling? When inflation is above the Bank of England’s target it responds by raising interest rates, making it more expensive for people and businesses to access credit. This is positive for the Pound Sterling because higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls below target, it is a sign economic growth is slowing, and the BoE will consider lowering interest rates to cheapen credit in the hope businesses will borrow to invest in growth-generating projects – a negative for the Pound Sterling. What is Quantitative Easing (QE) and how does it affect the Pound? In extreme situations, the Bank of England can enact a policy called Quantitative Easing (QE). QE is the process by which the BoE substantially increases the flow of credit in a stuck financial system. QE is a last resort policy when lowering interest rates will not achieve the necessary result. The process of QE involves the BoE printing money to buy assets – usually government or AAA-rated corporate bonds – from banks and other financial institutions. QE usually results in a weaker Pound Sterling. What is Quantitative tightening (QT) and how does it affect the Pound Sterling? Quantitative tightening (QT) is the reverse of QE, enacted when the economy is strengthening and inflation starts rising. Whilst in QE the Bank of England (BoE) purchases government and corporate bonds from financial institutions to encourage them to lend; in QT, the BoE stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive for the Pound Sterling.
03:15 US President Donald Trump to hold Iran talks with Gulf leaders next week — Reuters
US President Donald Trump is expected to meet Gulf leaders on the sidelines of the UN General Assembly in New York next Tuesday to discuss the next steps in the Iran war, Reuters reported on Wednesday.
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US President Donald Trump is expected to meet Gulf leaders on the sidelines of the UN General Assembly in New York next Tuesday to discuss the next steps in the Iran war, Reuters reported on Wednesday.The discussion is likely to focus on US ideas for a postwar strategy as Trump and his administration work on a day-after plan expected to be finalized after the midterms.Market reactionAt the time of writing, the West Texas Intermediate (WTI) is down 0.67% on the day at $96.80. WTI Oil FAQs What is WTI Oil? WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media. What factors drive the price of WTI Oil? Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa. How does inventory data impact the price of WTI Oil The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency. How does OPEC influence the price of WTI Oil? OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
03:06 New Zealand Dollar remains weak below 0.5750 despite better-than-expected GDP data
The NZD/USD pair falls to near 0.5725 during the early Asian session on Thursday. The New Zealand Dollar (NZD) remains under selling pressure against the US Dollar (USD) despite the upbeat New Zealand economic data. The US Initial Jobless Claims data is due later on Thursday.
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New Zealand’s economy grew by 0.2% QoQ in Q2, better than expected. Fed’s Warsh said inflation is still too high as the central bank hikes for the first time since 2023. The NZD/USD pair falls to near 0.5725 during the early Asian session on Thursday. The New Zealand Dollar (NZD) remains under selling pressure against the US Dollar (USD) despite the upbeat New Zealand economic data. The US Initial Jobless Claims data is due later on Thursday. Data released by Statistics New Zealand on Thursday showed that the country’s Gross Domestic Product (GDP) grew by 0.2% QoQ in the second quarter (Q2) of 2026. This figure followed a 0.9% expansion in Q1 and came in stronger than the expected 0.1% rise. On an annual basis, the New Zealand economy expanded by 2.6% in Q2, versus 1.7% in Q1, beating the estimation of a 2.3% growth."The 0.2 percent growth in economic activity in the June 2026 quarter reflects mixed results, with increases in nine out of 16 industries," said Statistics New Zealand spokesperson Jason Attewell. Despite the stronger-than-expected GDP report, New Zealand's economy grew more slowly in the second quarter as the crisis in the Middle East weighed on the economy. The New Zealand Dollar (NZD) remains under selling pressure in an immediate reaction to the GDP growth data. As widely expected, the US Federal Reserve (Fed) decided to raise its benchmark interest rate on Wednesday, bringing the benchmark interest rate by 25 basis points (bps) to the target range of 3.75% to 4.00%. This is the first rate hike since 2023. Fed Chairman Kevin Warsh said during the press conference that neither he nor his fellow policymakers are happy with the current pace of inflation. “Our predominant focus is on the price stability side of our mandate,” said Warsh. “The plain fact is that inflation is too high and has been for too long,” he added. The Fed rate hike and Warsh’s remarks about a commitment to fighting inflation could provide some support to the Greenback and act as a headwind for the pair in the near term. Kiwi under pressure as RBNZ’s dovish surprise collides with fragile risk sentimentAnalysts at ING highlight that the Reserve Bank of New Zealand delivered a “dovish surprise” at its September meeting, signalling “there is only room for another 25bp to 3.0%.” They caution that this “should not be taken as a commitment,” stressing that “the longer energy prices remain elevated, the higher the chances of upward revisions in policy projections by year-end.”On the currency side, ING reiterates that “NZD/USD remains primarily driven by global risk sentiment and US events.” The bank sees scope for further weakness, arguing that “the decline has a bit further to go on a Fed hike and risk assets' fragility.” For now, however, ING still identifies “0.570 as a bottom,” with “room to bounce back towards 0.59 as early as year-end on some dovish Fed repricing.”Technical Analysis: NZD/USD keeps a bearish vibe amid oversold RSIIn the daily chart, NZD/USD retains a bearish near-term bias as spot holds below the 100-day moving average (MA) and the 20-period Bollinger middle band, keeping the broader downside structure intact. Price is also trading beneath the lower Bollinger band, underscoring persistent selling pressure, while the Relative Strength Index (14) hovering near 29 suggests oversold conditions that could slow—but not yet reverse—the current decline.On the topside, initial resistance is aligned with the lower Bollinger band at about 0.5735, followed by the 100-day MA around 0.5840 and the Bollinger midline near 0.5875, with the upper band up in the 0.6020 area acting as a more distant cap. With no clear support levels derived from the current indicator set below market, further weakness would leave the pair vulnerable to fresh lows unless buyers can reclaim at least the 0.5735–0.5835 band to ease immediate downside pressure.(The technical analysis of this story was written with the help of an AI tool. Know more.) New Zealand Dollar FAQs What key factors drive the New Zealand Dollar? The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD. How do decisions of the RBNZ impact the New Zealand Dollar? The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair. How does economic data influence the value of the New Zealand Dollar? Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate. How does broader risk sentiment impact the New Zealand Dollar? The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
02:25 Gold falls to near $4,250 after Fed delivers rate hike
Gold price (XAU/USD) attracts some sellers to around $4,265 during the early Asian session on Thursday. The precious metal extends its downside after the US Federal Reserve (Fed) raises interest rates and signals another rate increase is likely this year.
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Fed raised its benchmark interest rate by 25 bps to the target range of 3.75% to 4.00% on Wednesday.Trump demanded the Fed lower interest rates to 1% “or less,” after the Fed rate decision. Gold price (XAU/USD) attracts some sellers to around $4,265 during the early Asian session on Thursday. The precious metal extends its downside after the US Federal Reserve (Fed) raises interest rates and signals another rate increase is likely this year. The Federal Open Market Committee (FOMC) voted unanimously to lift the benchmark federal funds rate to a range of 3.75% to 4.0% on Wednesday. It was the US central bank’s first rate hike since July 2023.During the press conference, Fed Chair Kevin Warsh restated his concerns over inflation, saying too many categories of products and services were showing annualized price gains above 3% on a 6- and 12-month basis. Warsh flagged further increases in borrowing costs in the coming months, sending the US Dollar (USD) higher and weighing on non-yielding bullion.“That’s hawkish. If the chair thinks policy is accommodative, then you’ve got more work to do,” said Michael Gapen, chief US economist for Morgan Stanley.Higher interest rates typically weigh on gold because the precious metal does not pay interest, making yield-bearing assets relatively more attractive.US President Donald Trump on Wednesday demanded the US central bank slash interest rates to 1% “or less,” hours after the Fed announced its first rate hike since 2023. Ongoing friction between the White House and independent Fed concerns could boost safe-haven flows and help limit the yellow metal’s losses. Gold support capped as yields and Dollar strength counter safe-haven bidAnalysts at Commerzbank observe that the recent pullback in Gold, which slipped to around USD4,292, reflects a tug-of-war between geopolitical safe-haven demand and macro headwinds. They note that “higher Treasury yields and the stronger USD continue to offset some of the safe-haven support from geopolitical risks,” limiting the metal’s ability to capitalise on risk-off sentiment. The bank also links the robust precious-metal price dynamics to India’s inflation backdrop, highlighting particularly strong Gold and Silver jewellery inflation, while underlying core inflation excluding precious metals remains much softer.Technical Analysis: GoldIn the daily chart, XAU/USD stays capped below the 100-day Moving Average (MA) and the Bollinger Bands’ 20-period simple moving average (SMA), keeping the near-term bias tilted to the downside despite only moderate momentum, with the Relative Strength Index (14) hovering around 42 and pointing to lingering bearish pressure rather than capitulation.On the topside, initial resistance is located at the 100-day MA around $4,325, with the Bollinger mid-line reinforcing a higher barrier near $4,440 and the upper band further up around $4,685, levels that would need to be reclaimed to ease the current bearish tone. On the downside, the lower Bollinger band offers the next notable cushion around $4,200, where buyers may attempt to slow the decline if selling pressure extends.(The technical analysis of this story was written with the help of an AI tool. Know more.) Gold FAQs Why do people invest in Gold? Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government. Who buys the most Gold? Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves. How is Gold correlated with other assets? Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal. What does the price of Gold depend on? The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
01:46 0.2%: New Zealand’s Gross Domestic Product grows more than expected in Q2
New Zealand's Gross Domestic Product (GDP) grew by 0.2% QoQ in the second quarter (Q2) of 2026, compared with a 0.8% expansion in the first quarter, Statistics New Zealand showed on Thursday. This reading came in stronger than the expectation of a rise of 0.1%.
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New Zealand's Gross Domestic Product (GDP) grew by 0.2% QoQ in the second quarter (Q2) of 2026, compared with a 0.8% expansion in the first quarter, Statistics New Zealand showed on Thursday. This reading came in stronger than the expectation of a rise of 0.1%.The second-quarter GDP expanded by 2.6% YoY, compared with a rise of 1.5% in Q1, while beating the estimation of a 2.3% growth.Market reaction to New Zealand’s GDP dataNew Zealand Dollar attracts some buyers following the upbeat GDP data. At the time of writing, the NZD/USD pair is down 0.53% on the day at 0.5725. GDP FAQs What is GDP and how is it recorded? A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022.
Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted. How does GDP influence currencies? A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency.
When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate. How does higher GDP impact the price of Gold? When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.
01:19 The Pound drops below its long-run average as the Fed's rate passes Britain's
The Fed raised rates by a quarter point to 3.75-4.00% on Wednesday, the first hike since 2023, and the vote was 12-0. The middle of the new range is 3.875%, which puts US rates above the UK's 3.75% for the first time this year.
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The middle of the new range is 3.875%, which puts US rates above the UK's 3.75% for the first time this year. GBP/USD has been down every session since September 10, Wednesday's drop was the largest of them by a distance, and the pair is trading just under 1.3400, under its 200-day average, which it hasn't been below since early August. The Bank of England meets on Thursday at 11:00 GMT.The gap is small, and the Fed says it's going to get biggerThe UK's Bank Rate, which is what the Bank of England calls its main interest rate, has been 3.75% since December 2025, and the Bank has held it at every meeting since. The difference between the two rates is only an eighth of a point, but it's now the wrong way round for the Pound, and the Fed's forecasts say it widens from here. The committee expects its rate to be 4.1% at the end of this year and still 4.1% at the end of 2027. It also expects unemployment to stay at 4.1% through 2029, below the 4.2% it thinks of as normal. The Fed doesn't see a reason to stop for at least a year, and that's the gap the Pound is trading against.Thursday's vote matters more than Thursday's rateThe Bank of England is expected to hold at 3.75% on Thursday, with the vote forecast at six to hold and three to raise, the same as July, when the three, Chief Economist Pill and external members Greene and Mann, wanted to go to 4% straight away. Almost nobody expects the rate to move, so what matters is how the vote splits. UK inflation came in at 3.1% in August, exactly as forecast, and the increase was mostly motor fuel, which a rate rise can't do anything about. That's the argument for the six. Factory gate prices rose 0.7% against a 0.3% forecast, and that's the argument for the three. If a fourth member joins them, the Pound's rate advantage starts coming back into view. The three lost in July, and the rematch was already on the calendar before the Fed moved. UK retail sales follow on Friday at 06:00 GMT, forecast to fall 0.2% after a 0.5% drop in July.Levels and biasResistance: 1.3400, which the Pound traded through on Wednesday, then the 200-day Exponential Moving Average (EMA) just under 1.3450, then 1.3500, where the rally on the inflation release ended.Support: Wednesday's low just above 1.3350, then 1.3300, the base the pair left in early August.Bias: Bearish below 1.3400. The first objective is 1.3350 and the second is 1.3300. On the daily chart the Stochastic Relative Strength Index (Stoch RSI), a momentum gauge, is at 16 and has been flat there for a few days, so the selling is stretched and a bounce back to 1.3400 wouldn't change that. The bearish case is wrong if the Pound has a daily close above 1.3450.GBP/USD daily chart Pound Sterling FAQs What is the Pound Sterling? The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data.
Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE). How do the decisions of the Bank of England impact on the Pound Sterling? The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates.
When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money.
When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects. How does economic data influence the value of the Pound? Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP.
A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall. How does the Trade Balance impact the Pound? Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
01:01 The Euro's losing streak runs on as the Fed matches the ECB's rate hike
The European Central Bank (ECB) raised its deposit rate to 2.50% on September 10, and the Euro has fallen every session since. The Fed raised its own rate to 3.75-4.00% on Wednesday, by the same quarter point, and the day's drop was the biggest of the run.
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The Fed raised its own rate to 3.75-4.00% on Wednesday, by the same quarter point, and the day's drop was the biggest of the run. EUR/USD is trading just above 1.1450, under both of its long-run averages, where it hasn't been since early August, and below where it was before the mid-August jump that started the last rally.The ECB raised rates to fight inflation and its currency fell for a weekBoth central banks moved a quarter point inside seven days, so the gap between the Fed's 3.875% midpoint and the ECB's 2.50% is 1.375 points, exactly what it was before either meeting. What the Fed added on Wednesday was a forecast that has US inflation not back at 2% until 2029. The ECB's own forecast has eurozone inflation at 2.5% next year. Two central banks above target for years to come, and the one paying 1.375 points less has had its currency sold every day since it tightened. Fed Chair Warsh added that the summer's inflation figures hadn't shown him any improvement, which is about as far from a signal to stop as a central banker gets.Thursday's inflation number is a confirmation, not a releaseEurozone inflation for August is due on Thursday at 09:00 GMT, but it's the final estimate, with the core rate forecast at 2.4%, the same as the flash. Confirmations don't usually move currencies. ECB Chief Economist Lane speaks the same day at 07:00 GMT and the next ECB meeting is October 29, six weeks away, so the Euro's own central bank has nothing scheduled that could change its rate. The daily momentum gauge is at 15, its lowest since June, which is stretched enough that a bounce is likely at some point. Given the size of the last two sessions, the bounce would have to reach 1.1500 to count as anything more than a pause.Levels and biasResistance: 1.1500, then the 50-day Exponential Moving Average (EMA) near 1.1550, which the pair went through on Wednesday, then 1.1600.Support: Wednesday's low just above 1.1450, then 1.1400, then the early-August base near 1.1350.Bias: Bearish below 1.1500. The first objective is 1.1400 and the second is the early-August base near 1.1350. The daily Stochastic Relative Strength Index (Stoch RSI), a momentum gauge, shows 15 and has been falling for two weeks, so the move is stretched and a bounce to 1.1500 wouldn't change that. A daily close above 1.1600 ends the bearish case.EUR/USD daily chart Euro FAQs What is the Euro? The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day.
EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%). What is the ECB and how does it impact the Euro? The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy.
The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa.
The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde. How does inflation data impact the value of the Euro? Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control.
Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money. How does economic data influence the value of the Euro? Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency.
A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall.
Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy. How does the Trade Balance impact the Euro? Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
00:18 The Japanese Yen gives back more of its rally as the Fed raises rates
The Bank of Japan meets on Friday, and the market has a quarter-point hike to 1.25% priced at 100%. The Yen has been falling anyway. USD/JPY is up three sessions in a row, Wednesday's gain was the biggest of the three, and the pair is trading just under 156.50 after the Fed's hike to 3.75-4.00%.
.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}USD/JPY is up three sessions running and has recovered half of its September drop.Bank of Japan decides Friday, with a hike to 1.25% priced at 100%.Japan's national inflation figures for August are out Thursday at 23:30 GMT.The Bank of Japan meets on Friday, and the market has a quarter-point hike to 1.25% priced at 100%. The Yen has been falling anyway. USD/JPY is up three sessions in a row, Wednesday's gain was the biggest of the three, and the pair is trading just under 156.50 after the Fed's hike to 3.75-4.00%. That puts it roughly halfway back from the September low near 153.00 to where it started the month near 160.00.Both central banks are raising and the gap barely movesJapan's policy rate is 1%, the highest since 1995, and Friday's expected move takes it to 1.25%. The Fed's midpoint is now 3.875%. So after both moves the gap between the two is about two and five-eighths points, and it was about two and five-eighths points before either of them did anything. The market has the BoJ at 1.48% by December and 1.85% by the middle of 2027, while the Fed's forecasts have its rate at 4.1% at the end of 2027 with no cuts before then. Two quarter-point hikes in the same week do nothing to a gap that size, which is why a Yen that rallied about 4% in the first half of September on hike expectations has given more than half of it back since.Thursday's inflation figures set up Friday's press conferenceJapan's national consumer prices for August are due on Thursday at 23:30 GMT, with the measure excluding fresh food forecast at 1.8%, the same as July. That's below the BoJ's 2% target and it's the number BoJ Governor Ueda will be asked about on Friday, since a bank raising rates with inflation under target has some explaining to do. The BoJ decision has no fixed time on Friday and the press conference is at 06:30 GMT. Wholesale prices rose 7.6% in the year to August, which is the BoJ's argument that consumer inflation is coming. Momentum on the daily chart has turned up from its September low but is still in the lower third of its range, so the rebound is early rather than stretched. The Fed's part is done. From here the pair moves on what the BoJ says about December.Levels and biasResistance: 156.50, just above Wednesday's high, then the 200-day Exponential Moving Average (EMA) just under 157.50, then 158.00, the bottom of the range the pair was in through late August.Support: 155.00, near Wednesday's low, then 154.00, then the September low near 153.00.Bias: Bullish above 155.00. The first objective is the 200-day EMA just under 157.50 and the second is 158.00. The daily Stochastic Relative Strength Index (Stoch RSI), a momentum gauge, is at 26 and rising, so the rebound has room. If the pair has a daily close below 154.00, the bullish case is over.USD/JPY daily chart Japanese Yen FAQs What key factors drive the Japanese Yen? The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors. How do the decisions of the Bank of Japan impact the Japanese Yen? One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen. How does the differential between Japanese and US bond yields impact the Japanese Yen? Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential. How does broader risk sentiment impact the Japanese Yen? The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
00:14 New Zealand GDP in the barrel with the Kiwi at July lows
New Zealand reports second-quarter growth later on Wednesday, or early on Thursday depending on where you are relative to the international date line, and the forecast is 0.1% for the quarter, down from 0.8% in the first three months of the year.
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Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted. How does GDP influence currencies? A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency.
When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate. How does higher GDP impact the price of Gold? When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.
00:04 Trump demands 1% rates hours after the Fed raised them
Trump posted on Wednesday that US rates should be 1% or less and that the country has the strongest credit anywhere. He also wrote that cutting off trade with every nation the US runs a deficit with would earn at least $1.5 trillion a year.
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If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation. How do interest rates impact currencies? Higher interest rates generally help strengthen a country’s currency as they make it a more attractive place for global investors to park their money. How do interest rates influence the price of Gold? Higher interest rates overall weigh on the price of Gold because they increase the opportunity cost of holding Gold instead of investing in an interest-bearing asset or placing cash in the bank.
If interest rates are high that usually pushes up the price of the US Dollar (USD), and since Gold is priced in Dollars, this has the effect of lowering the price of Gold. What is the Fed Funds rate? The Fed funds rate is the overnight rate at which US banks lend to each other. It is the oft-quoted headline rate set by the Federal Reserve at its FOMC meetings. It is set as a range, for example 4.75%-5.00%, though the upper limit (in that case 5.00%) is the quoted figure.
Market expectations for future Fed funds rate are tracked by the CME FedWatch tool, which shapes how many financial markets behave in anticipation of future Federal Reserve monetary policy decisions.
00:01 New Zealand Dollar sinks toward its July low after the Fed hikes
NZD/USD has dropped in six straight sessions. The run started near 0.5900 on September 8, went through both long-run averages near 0.5850 early in the run, and the last three sessions have been the biggest of the lot.
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The run started near 0.5900 on September 8, went through both long-run averages near 0.5850 early in the run, and the last three sessions have been the biggest of the lot. The pair is trading just above 0.5700 after Wednesday's Fed hike to 3.75-4.00%, and the July low near 0.5625 is the next level of any note below. The daily momentum gauge is at 8, which is as low as it has been since July.A central bank that raised twice and a currency that fell anywayThe Reserve Bank of New Zealand (RBNZ) raised its cash rate to 2.75% on September 2, its second increase since July, because inflation hit 4.1% in the second quarter on fuel prices. It also said the next move is probably a pause in October and another rise in December. That's a central bank going the same direction as the Fed, just from a lower starting point, and the gap between 2.75% and the Fed's new 3.875% midpoint is more than a point. The Fed's own forecasts don't help either: they raised the US growth outlook for this year and next and took every cut out of 2027. The Kiwi is a currency that rises when investors want risk, and on a day the Fed said US growth is strong and rates are staying high, they didn't.The number that explains the selling comes out after the sellingNew Zealand's second-quarter GDP is due on Wednesday at 22:45 GMT, and the forecast is 0.1% growth on the quarter after 0.8% in the first quarter, which would be a stall. It's also the kind of number that determines whether the RBNZ's December hike stays on the table, so a miss pushes it further out and a beat brings it back in. Trade figures follow on Thursday at 22:45 GMT. The pair has fallen for six sessions into a number that could justify the whole move, which is the market pricing a slowdown before the statisticians confirm it. With momentum this stretched, the reaction to a beat would be sharper than the reaction to a miss.Levels and biasResistance: 0.5750, then just under 0.5800, then the 50-day Exponential Moving Average (EMA) near 0.5850, which the pair went through early in the run and has not been back to.Support: 0.5700, which Wednesday's low came within a few pips of, then the July low just above 0.5600.Bias: Bearish below 0.5750. The first objective is 0.5700 and the second is the July low just above 0.5600. The daily Stochastic Relative Strength Index (Stoch RSI), a momentum gauge, reads 8, deep in oversold territory, so a bounce toward 0.5750 is likely at some point and wouldn't change the picture. The bearish case fails on a daily close above 0.5800.NZD/USD daily chart New Zealand Dollar FAQs What key factors drive the New Zealand Dollar? The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD. How do decisions of the RBNZ impact the New Zealand Dollar? The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair. How does economic data influence the value of the New Zealand Dollar? Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate. How does broader risk sentiment impact the New Zealand Dollar? The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
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