Forex News

• The US Dollar slides below 99.00 on Thursday, hitting its lowest level in more than a week.
• A pullback in Treasury yields and Waller’s less-hawkish remarks weigh on the Greenback.
• Friday’s NFP report could decide whether the Dollar rebounds or extends its decline.

The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, slides below 99.00 to its lowest level in over a week on Thursday. At the time of writing, DXY trades around 98.90, down 0.67% on the day, after reaching 99.86 on Wednesday.

A sharp rally in the Japanese Yen (JPY) leads the Greenback’s decline. USD/JPY falls for the second consecutive day, down around 2% at the time of writing and trading near 155.45, its lowest level in a month and close to the post-July coordinated intervention low of 155.24. The Yen’s quick move has sparked fresh intervention speculation, including talk of a possible rate check, but there has been no confirmation from Japanese authorities.

A modest pullback in US Treasury yields also weighs on the US Dollar. Yields retreat across the curve from recent highs, with the benchmark 10-year yield trading around 4.75% after touching 4.81% on Wednesday, its highest level since October 2023.

Selling pressure on the Greenback gathered pace following less-hawkish comments from Federal Reserve (Fed) Governor Christopher Waller, prompting traders to scale back bets on a rate hike at the September 15-16 meeting. Waller said he is “finally seeing some signs of disinflation,” adding: “Give disinflation a chance; we can wait one meeting.” However, he warned that if the trend reverses in August, he would be “willing to pull the trigger on a rate hike.”

According to the CME FedWatch Tool, the probability of a rate hike at the September meeting has fallen to around 50% from 63% a day earlier.

Traders largely shrug off Thursday’s US economic data. Initial Jobless Claims rose to 206K, slightly above expectations of 205K, while the ISM Services Purchasing Managers Index (PMI) increased to 55.4 in August from 54.1 in July, beating the market forecast of 54.3.

The US Dollar now faces a crucial test from Friday’s Nonfarm Payrolls report

The US economy is expected to add 58K jobs in August after shedding 23K in July, while the unemployment rate is forecast to hold at 4.1%. Markets will also closely examine wage growth and revisions to previous payroll figures after employment gains for May and June were revised down by a combined 103K in the July report.

A stronger-than-expected report could revive expectations of a September rate hike and help the US Dollar regain ground. Conversely, another weak payroll print or sharp downward revisions would strengthen the case for the Fed to keep rates unchanged, leaving DXY vulnerable to a deeper decline.

• Gold rallies above $4,480 as Waller tempers Fed hike bets.
• ISM Services strength contrasts with softer low-firing labor backdrop.
• NFP and Hammack speech could reset September rate expectations.

Gold (XAU/USD) rallies more than 2% on Thursday following dovish comments by Federal Reserve (Fed) Governor Christopher Waller, who advocated holding rates steady if inflation data shows the disinflation process continues. At the same time, US data was mixed, with jobless claims remaining at familiar levels while business activity improved. At the time of writing, XAU/USD trades at $4,487.

XAU/USD jumps as Waller’s neutral tilt offsets firm services activity

Fed Governor Christopher Waller shifted to a more neutral stance, as he has been vocal about stubbornly high inflation. On Thursday, he said that if inflation cools, he will support keeping rates unchanged. However, he didn’t close the door on a hike if prices come hotter than foreseen.

In the meantime, the resumption of hostilities in the Middle East has weighed on the US Dollar, which has been pressured since Wednesday amid speculation of an intervention to boost the Japanese Yen.

The release of US jobs data on Thursday showed that the labor market is in a low-firing, low-hiring environment. Initial Jobless Claims for the week ending August 29 rose from 204K to 206K, a tick above the 205K projected by Wall Street’s economists.

The ISM Services PMI indicated business activity in the services sector is solid, though input costs remain high. The index rose to 55.4 from 54.1, exceeding estimates of 54.3. The Prices Paid sub-component jumped from 70.3 to 72.6, the highest since August 2022.

Given the backdrop, but mostly influenced by Waller’s comments, money markets priced in a lower chance that the Federal Reserve will raise interest rates by 25 basis points at the September 16 meeting. The odds stand at 54%, while for holding rates near 46%, according to Prime Terminal.

Ahead, traders eye speeches by Cleveland Fed Beth Hammack and also Friday’s Nonfarm Payrolls for August, which are expected to improve from a -23K contraction to 56K, while the Unemployment Rate is foreseen at 4.1%, unchanged, compared to the previous print.

XAU/USD technical outlook: Gold reclaims $4,400, buyers target 200-day SMA

Gold price shifted gears and climbed above the September 1 high of $4,461, further accelerating toward $4,500 as traders stepped in amid broad US Dollar weakness.

Momentum has shifted to moderately bullish as depicted by the Relative Strength Index (RSI). The RSI signals that buyers are gaining strength, an indication that bullion prices might continue to trend higher.

If XAU/USD clears $4,500, the next resistance would be the 200-day Simple Moving Average (SMA) at $4.533. Once surpassed, the next stop is the $4,600 milestone, with the next area to watch being the August monthly high of $4,697.

Downwards, Gold’s first support is the $4,400 mark. Below that is the 100-day SMA at $4,358. On further weakness, the next floor level is $4,300, followed by the 50-day SMA at $4,232.

ING’s Warren Patterson says European gas prices have climbed above EUR70/MWh as lower Persian Gulf LNG supply and strong Asian spot buying cut EU LNG imports by about 16% year-on-year between April and July. EU storage was around 65% full at the end of August versus an 82% five-year average, with inventories projected at 72–73% at the start of the heating season, potentially prompting faster purchases and limiting downside for prices into winter.

Low storage supports gas prices

"European gas prices have recently exceeded EUR70/MWh, their highest since March. Lower Persian Gulf LNG supply has tightened the global market, while strong Asian spot buying pushed EU LNG imports down about 16% year-on-year between April and July. We believe imports should stabilise and recover on a month-on-month basis because freight economics now favour sending spot cargoes to Europe."

"Slower injections left EU storage around 65% full at the end of August, versus a five-year average of 82% and below 2021 levels. Our balance points to inventories of 72-73% at the start of the heating season, well below the headline 90% target and potentially below the flexible 75% threshold."

"Some member states may therefore need to accelerate purchases, supporting prices as winter approaches. Low storage limits the downside for European gas prices under any of our Persian Gulf scenarios."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

HSBC’s Willem Sels highlights that accelerating AI adoption, resilient growth and broadening earnings are supporting global equities into Q4 2026. The bank has recently added exposure to global stocks, favouring the US and Asia, while keeping sector diversification. Attractive real yields in bonds, plus Gold and alternative assets, are seen as key portfolio stabilisers and income sources.

AI, earnings and multi-asset positioning

"We hope our four investment themes for the coming quarter can help you make sense of a fast-changing world and position your portfolio for the opportunities it presents. Our team is ready to help you put these themes into action."

"Heading into the final quarter of 2026, that dichotomy remains in place: AI continues to be a key source of market optimism, while headline risks remain elevated. The situation in the Middle East remains unresolved, inflation uncertainty is lingering and the US mid-term elections are looming. These forces will continue to move markets, providing both risks and opportunities."

"We believe earnings growth will continue to broaden beyond the tech sector and US stocks. Asia is a key beneficiary of global chip demand and is at the forefront of data centre expansion, playing a strategic role in the global AI supply chain. AI adoption is also boosting productivity around the world – including in Europe."

"Beyond AI, defence spending and US re-industrialisation are also contributing to wider opportunities in Financials, Materials and Energy across regions, supporting diversification. Therefore, we’ve recently added exposure to global equities, favouring the US and Asia, while maintaining a broad sector allocation. The opportunity set extends to bonds, where attractive real yields offer both income and portfolio resilience against market volatility."

"Our exposure to non-traditional assets, such as gold, infrastructure and alternative assets, has worked well, providing a valuable counterbalance during periods of market uncertainty when equities and bonds come under pressure. Among alternative assets, private assets can open up a wider range of opportunities beyond public markets."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

The US Dollar (USD) has added to Wednesday’s pullback, receding to multi-day lows and breaching below its key 200-day SMA. The marked retracement has almost exclusively followed rising market chatter over an imminent rate hike by the BoJ, relegating persistent geopolitical concerns and caution ahead of NFP data to the back burner.

Here is what you need to know on Friday, September 4:

The US Dollar Index (DXY) has built on its previous day’s losses and broken below the 99.00 support level, leaving behind its significant 200-day SMA at the same time. The Nonfarm Payrolls will be the undisputed event to watch at the end of the week, seconded by the Unemployment Rate and wage inflation data.

EUR/USD has traded with marked gains, surpassing the 1.1600 mark to hit four-day highs, always on the back of the marked weakness hurting the buck. Factory Orders in Germany are due in the first turn, seconded by the S&P Global Construction PMI in both Germany and the euro bloc and finally we will get Retail Sales data in the Euroland.

GBP/USD has managed to reclaim the 1.3550 region, reaching two-day highs and setting aside two consecutive days of losses. The S&P Global Construction PMI will be released alongside the BoE’s Decision Maker Panel (DMP) survey.

USD/JPY has collapsed to levels last seen in early August near 155.00 on the back of rising bets of a BoJ rate hike at its next gathering (what about FX intervention?). Household Spending figures will close the Japanese docket, followed by the advanced Coincident and Leading Economic indexes.

AUD/USD has added to Wednesday’s advance, marginally exceeding the key 0.7200 hurdle to challenge multi-week tops amid the increasing downward trend in the US Dollar. The next data release on the Australian calendar will be the Consumer Confidence index tracked by Westpac and housing data, all due on September 8.

Another day, another advance in WTI prices. Indeed, the commodity surpassed the $93.00 mark per barrel for the first time since late July, always underpinned by escalating tensions on the US-Iran-Hormuz front and the marked sell-off in the Greenback.

Gold has added to Wednesday’s recovery, breaking above the key $4,500 mark per troy ounce on the back of the strong retracement in the US Dollar. The yellow metal’s extra bounce has also followed declining US Treasury yields across the curve and continuous jitters in the Middle East.

BNY’s Geoff Yu highlights strong Japanese Yen flows and a declining USD/JPY as markets hesitate to challenge Japanese and U.S. authorities. He argues that heavy post-intervention selling has largely run its course and that around 160 in USD/JPY now acts as a practical intervention ceiling. Yu also notes BoJ rate-hike discussions and skepticism that intervention alone can deliver sustained Yen appreciation.

Authorities deter fresh Yen shorts

"JPY is back in focus. USD/JPY has continued to decline, as markets remain hesitant to test the Japanese and U.S. authorities’ resolve to defend the yen. Deterrence has been established for now."

"Our data show that JPY flows on Tuesday were the strongest since mid-July, supporting our view that JPY selling has largely run its course after heavy post-intervention sales in July. Investors initially used yen strength to rebuild carry trades or hedge Japanese exposures, and neither the dovish FOMC reaction in July nor the Treasury buyback announcement materially changed that pattern. While investors are not yet building outright JPY longs on a significant scale, 160 increasingly looks like a practical intervention ceiling, making markets more reluctant to add fresh shorts and raising the risk of renewed pre-intervention buying."

"The more likely outcome is therefore asymmetric: unilateral or multilateral intervention and political constraints can cap USD/JPY around 160, even if the underlying macro backdrop is not yet strong enough to drive JPY materially higher."

"We remain skeptical that Japanese authorities can generate sustained JPY appreciation through intervention alone. The government’s policy mix remains reflationary, whereas today’s backdrop is very different from the early Abenomics period: inflation is already materially higher and structural reform is less prominent. However, that does not mean the yen must weaken further."

"Amid a sharp downward move in USD/JPY, reports suggest the BoJ is leaning toward a 25bp rate hike to 1.25% at its September 18 meeting, while keeping the option of faster tightening open if inflation risks intensify."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• DJIA trades near 53,750, up 1.3%, on track for its best day in a month.
• September hike odds at 50.4% after a Fed governor leans toward a hold.
• ISM services PMI beats at 55.4, prices paid climb to 72.6 from 70.3.

The Dow Jones Industrial Average (DJIA) trades on Thursday near 53,750, up 1.3% and on track for its strongest session since early August, after a Federal Reserve (Fed) governor said he would be inclined to support holding rates at the September 15-16 meeting if the inflation data due over the next two weeks keep behaving. The tape has treated a conditional as a verdict. Hike odds on the FedWatch tool sit at 50.4% against 49.6% for a hold, down from above 60% on Wednesday, and the 10-year Treasury yield has backed off the multi-year high it set the day before.

The market bought the first half of the sentence

The first half of the governor's sentence is that recent data finally show signs of disinflation, with the three-month annualized rate on the Personal Consumption Expenditures (PCE) gauge down to about 3.05% from 4.76% in February, and roughly half of July's core increase coming from services prices that are estimated rather than observed. The second half is that policy is only slightly restrictive and it would not take much acceleration to nudge him toward tightening. The market priced the first half.

The chair used last week's Jackson Hole keynote to say the softer summer readings did not persuade him the underlying trend had improved, and a second governor said Tuesday he would back a hike if inflation fails to ease. Headline PCE ran 3.7% in July with core at 3.3%, and the only inflation reads before the meeting are the Producer Price Index (PPI) on September 10 and the Consumer Price Index (CPI) on September 11. The hold has one vote leaning toward it and two data points that can take it away.

Deferred is not cancelled

The FedWatch table is less dovish than the tape's reading of it. October carries a 63.6% probability of at least one hike, and December has a single hike as its modal outcome at 42.9%, with a further 32.9% assigned to two. The market gives better than four chances in five that the target range is higher by year end. What moved today is the date of the first move rather than the fact of it, and the index has added more than 650 points on a calendar adjustment.

The rates relief is real as far as it goes. The 10-year yield trades near 4.75% after touching 4.81% on Wednesday, its highest since late 2023, and the Dollar Index sits at a one-week low near 99.00 as the Yen jumps to a one-month high ahead of a September 18 Bank of Japan decision the market expects to bring a hike. That relief was under way before the governor spoke, so the equity bid is borrowed from the bond market rather than earned on any change in the inflation facts. Nvidia (NVDA) agreeing to buy Hugging Face for $12.9 billion is colour, not cause.

The condition has an energy problem

The Institute for Supply Management (ISM) services Purchasing Managers Index (PMI) printed 55.4 against a 54.3 consensus and 54.1 prior, with prices paid climbing to 72.6 from 70.3 while the employment index at 47.8 stayed in contraction. The prices line is the hawkish number of the morning, and it bought a thirty-minute dip from just above 53,500 to the 53,300 area before buyers absorbed it and pushed on to the session high.

The governor's case also rests on higher energy prices not having spread into the wider economy, and the barrel is not cooperating. West Texas Intermediate (WTI) Crude Oil trades near $92.00 and Brent Crude Oil above $96.00, both up about 1% on the day, after American forces struck Islamic Revolutionary Guard Corps (IRGC) targets on Tuesday, Iran answered with missiles and drones at bases across the region, and the president said Wednesday that any agreement with Tehran is worthless and further strikes can come at any time. A 72.6 prices paid reading and a barrel climbing through a live shooting war are the two facts most likely to make August's CPI say otherwise.

Friday's payrolls and next week's prices

August nonfarm payrolls land Friday at 12:30 GMT, forecast at 58K after a 23K contraction, with the unemployment rate seen unchanged at 4.1% and average hourly earnings forecast at 0.3% MoM from 0.1% and 3% YoY from 3.2%. This morning's labour prints leaned soft: initial claims at 206K against 205K expected, Challenger job cuts up to 52.9K from 33.4K, and second-quarter unit labour costs at 1.2% against 1.3% forecast. The governor expects Friday's report to look like recent ones and says inflation will decide his vote, which makes the earnings line the number that matters here.

A regional Fed president speaks at 19:00 GMT today, PPI follows on September 10 and CPI on September 11, both at 12:30 GMT, and the committee decides on September 16. A soft payroll count on Friday does nothing for the hold that a firm CPI cannot undo the following week, and the index is trading as though the sequence runs the other way.

Levels to watch

Resistance: The 53,800 handle is the first test, the band that capped every rally from August 14 through August 28, and the session high sits just beneath it. Above that, 54,000 marks the August 7 to August 13 consolidation, then 54,400 and the record just short of 54,750, roughly 2% overhead.

Support: The 53,500 handle is the shelf the afternoon built on before the final leg and the level buyers now have to hold. Beneath it sit the 53,250 area, where Wednesday's high and Tuesday's open cluster, then the session low just above 53,000, with the rising 50-day Exponential Moving Average (EMA) near 52,800 the line under the entire August advance. The 200-day EMA just above 50,000 is not in play.

Bias: Bullish while 53,500 holds, with objectives at 53,800 and then 54,000. The daily Stochastic Relative Strength Index (Stoch RSI) near 36 is curling up out of the lower third of its range, which fits a low made on Wednesday and defended. The five-minute reading above 85 says the last leg is stretched, so the first pullback toward 53,500 tests the bid rather than the trend. A daily close beneath 53,500 returns the tape to the range and reopens 53,250, then 53,000 and the 50-day EMA.

Dow Jones daily chart

Bank of England (BoE) Chief Economist Huw Pill reiterated on Thursday his support for raising the Bank Rate to 4%, arguing that policymakers cannot wait for uncertainty surrounding the Middle East conflict and energy prices to resolve before acting. Pill warned that delaying action could leave monetary policy behind the curve and allow higher energy costs to spread into wages and domestic prices.

Key takeaways

“My own response has pointed to a need to raise Bank Rate to 4%.”

"Raising bank rate on this basis doesn’t signal prolonged aggressive hikes."

“Prompt increase in bank rate may head off some potential insidious catch-up dynamics.”

“Clear, prompt and decisive policy action and communication would help steer markets and reduce uncertainty.”

“We cannot wait for uncertainties to resolve themselves.”

“A wait-and-see approach risks creating a status quo bias in the setting of interest rates.”

“Fine-tuning interest rates in the face of uncertainty about energy prices is problematic.”

“I am unconvinced that labour-market slack means there will be no second-round effects.”

“There are reasons to believe that second-round effects will be stronger now than during the ‘halcyon days’ of inflation targeting.”

“The Iran war has not de-anchored longer-term inflation expectations.”

“The MPC should be cautious about using relatively extreme ‘what-if’ scenarios to explain its analytical framework.”

• GBP/USD rises as Waller’s neutral stance trims Fed hike bets.
• Strong ISM services data limits Sterling gains before NFP.
• BoE’s Pill backs higher rates, supporting Sterling resilience.

The Pound Sterling (GBP) rises against the US Dollar (USD) on Thursday as Federal Reserve (Fed) Governor Christopher Waller favors holding rates unchanged, shifting to a more neutral stance regarding monetary policy, while data showed that the US labor market is solid and that business activity improved. At the time of writing, GBP/USD trades at 1.3535, up 0.37%.

GBP/USD gains as Waller softens Fed risks before NFP

Waller said that if upcoming inflation data shows cooling, he would be inclined to allow the disinflation process to resume, as he sees the Fed funds rate as appropriate. Nevertheless, he admitted that if inflation comes hot, he would not hesitate to consider a rate hike.

His comments triggered a repricing in money markets, which, a day ago, priced in a more than 60% chance of a 25-basis-point (bps) rate hike. As of writing, the odds have shrunk to 54% for a rate rise and 46% for rates to stay steady.

Data-wise, the US ISM Services PMI in August was 55.4, exceeding forecasts of 54.3 and July’s 54.1. Some sub-components of the PMI showed that companies are complaining about higher prices, while the jobs market seems to have stabilized, though it remained in contractionary territory.

Other data showed that the number of Americans filing for unemployment benefits rose from 204K to 206K in the last week, a tick above the 205K expected, indicating a low-firing, low-hiring environment. Earlier, the Challenge, Gray & Christmas firm said that announced plans to hire by companies rose 37% in the first eight months of 2026, compared to the same period last year.

In the UK, the docket was absent, but Cable benefited from a potential intervention in the FX markets, as the Japanese Yen appreciated sharply against most G8 FX currencies.

Meanwhile, Bank of England (BoE) Chief Economist Huw Pill was hawkish, saying that “my own response has pointed to a need to raise Bank Rate to 4%.” He added that raising rates “may serve to head off some of the potential insidious catch-up dynamics.”

Now, traders' eyes are on the release of the US August Nonfarm Payrolls figures on Friday.

GBP/USD Price Forecast: Technical outlook

In the daily chart, GBP/USD trades at 1.3531, holding above the latest triple simple moving average cluster around 1.3449 and a series of reclaimed trend-line levels, which collectively suggest a mildly bullish near-term bias. The pair is now trading over former descending resistance lines, while the Relative Strength Index (14) at 51.43 sits just above neutral, hinting at steady rather than impulsive upside momentum as price approaches the next key structural cap.

On the downside, immediate support is clustered between the broken resistance trend line at 1.3478, the composite triple simple moving average near 1.3449, and the secondary trend support around 1.3421, with additional protection seen at the earlier break level near 1.3378. On the topside, the upward-sloping trendline break at 1.3653 is the next notable resistance, and a sustained move above this barrier would open the path for a more decisive bullish extension in the coming sessions.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

• Gold rebounds from a nearly four-week low as the Greenback loses ground.
• Fed rate expectations remain the key focus ahead of the NFP report due on Friday.
• Technically, immediate resistance is located at $4,500, followed by the 200-day SMA at $4,533.

Gold (XAU/USD) extends its rebound on Thursday after slipping below $4,300 to a nearly four-week low on the previous day. A sharp rally in the Japanese Yen (JPY) weighs on the US Dollar (USD), while a pullback in US Treasury yields provides additional support to the precious metal. At the time of writing, XAU/USD trades around $4,509, up 2.78% on the day.

The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 99.00, near a one-week low, after reaching 99.86 on Wednesday, its highest level since August 14. The benchmark 10-year US Treasury yield trades around 4.75%, falling for the second consecutive day after reaching 4.81%, its highest level since October 2023.

US economic data offers mixed signals. Initial Jobless Claims increased to 206K in the week ending August 29, slightly above the market forecast of 205K and the previous reading of 204K. Meanwhile, the August ISM Services Purchasing Managers' Index (PMI) rose to 55.4 from 54.1 in July, beating expectations of 54.3.

A weaker US Dollar is generally positive for Gold. However, several near-term headwinds could make it difficult for the yellow metal to sustain its recovery, even though the longer-term outlook stays supported by strong central bank purchases and investment demand.

Government bond yields have climbed to multi-year highs across major economies as fiscal and inflation concerns deepen. Higher Oil prices linked to the war in the Middle East are also adding to inflation expectations. Elevated yields increase the opportunity cost of holding non-yielding assets such as Gold.

Expectations of Federal Reserve (Fed) rate hikes pose an additional challenge, as Gold typically performs better when interest rates are low. However, dovish comments from Fed Governor Christopher Waller keep traders cautious over the possibility of a September move.

Waller said he is “finally seeing some signs of disinflation in recent data” and that the “rate decision in September hinges on August inflation.” He added that he would support keeping interest rates unchanged if the August data confirm recent progress.

According to the CME FedWatch Tool, the probability of a rate hike at the Fed’s September 15-16 meeting has fallen to around 48% from 63% a day earlier. Traders now await Friday’s Nonfarm Payrolls (NFP) report for fresh clues on the Fed’s monetary policy outlook.

Technical analysis: XAU/USD approaches $4,500 as buyers regain ground

XAU/USD holds above the 50-day and 100-day Simple Moving Averages (SMAs), keeping the near-term outlook constructive. The Moving Average Convergence Divergence (MACD) indicator is still below zero and in negative territory, hinting that bullish momentum is tentative despite the spot price trading well above underlying trend supports. The Relative Strength Index (RSI) on the daily chart is at 55 and is mildly positive, reinforcing a consolidative bullish tone rather than an overextended rally.

On the upside, immediate resistance is located at the horizontal level of $4,500, followed by the 200-day SMA at $4,533 and the $4,700 mark. On the downside, the psychological level of $4,400 offers initial support ahead of the 100-day SMA at $4,357 and the 50-day SMA at $4,231. A deeper decline could bring the horizontal support level of $4,000 into focus.

(The technical analysis of this story was written with the help of an AI tool. Know more.)