Forex News

• Gold heads for a sharp weekly decline as aggressive Fed rate hike bets weigh on sentiment.
• US PPI rises less than expected in October, although annual producer inflation edges higher.
• Technical indicators remain bearish, with RSI below 50 and MACD in negative territory.

Gold (XAU/USD) trims its gains on Friday after briefly climbing above $3,900. The metal fell to $3,852 on Thursday, its lowest level since October 2025. Hawkish remarks from Federal Reserve (Fed) officials continue to fuel bets on an extended period of monetary policy tightening, overshadowing a mixed US Producer Price Index (PPI) report.

At the time of writing, XAU/USD trades around $3,880, down more than 4% so far this week.

The US PPI rose 0.3% MoM in October, below the 0.4% forecast and down from 1.4% in September. Annual producer inflation picked up to 6.5% from 6.3%, coming in below the 6.6% forecast. Core PPI rose 0.3% MoM, slowing from 0.7%, while the annual rate held at 5.0%. Both core readings matched expectations.

The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, trades little changed on the day near 103.19, just below the 19-month high of 103.30 it touched earlier. The index remains on track for a third straight weekly gain.

Dollar surges as Fed hike expectations drive short-end yields higher

Analysts at ING describe “a powerful, macro-driven rally in the dollar” this week, as markets rapidly reprice the Fed’s near-term path. They note that “short-dated US yields are close to 40bp higher since Tuesday morning, when the Fed's Christopher Waller mused over the need for a 50bp hike in December.” In the wake of those comments, ING highlights that “the market has since adopted the view that back-to-back December and January hikes look likely, while extending the full Fed adjustment from here to a full 85bp of tightening.”

A stronger US Dollar makes Gold more expensive for buyers using other currencies, while higher US Treasury yields raise the opportunity cost of holding the non-yielding metal.

Fed officials warn that inflation remains too high

Earlier this week, US Consumer Price Index (CPI) data showed headline inflation rose 0.4% MoM in October, above the 0.3% forecast. Core CPI, which excludes food and energy, rose 0.3% MoM, exceeding the 0.2% forecast.

Chicago Fed President Austan Goolsbee said on Friday inflation will determine the path of interest rates and agreed that the Fed still “has work to do” to bring inflation down. On Thursday, Cleveland Fed President Beth Hammack said inflation pressures were “moving in the wrong direction” and that the Fed needed to “move to a restrictive stance of policy” to bring inflation back to 2%.

San Francisco Fed President Mary Daly also said her “bias is that further tightening will be needed.” Dallas Fed President Lorie Logan said on Tuesday that the central bank needs “at least two more 25-basis-point rate increases” to bring inflation down.

Higher energy costs could keep inflation elevated as prospects for a deal to end the US-Iran war remain slim. West Texas Intermediate (WTI) crude jumped more than 3% on Thursday after US President Donald Trump said Washington did not need a deal with Iran to end the war.

Technical Analysis: Bearish bias persists below key daily SMAs

On the daily chart, XAU/USD is extending a bearish near-term bias as price holds below the 21-day, 50-day, and 100-day Simple Moving Averages (SMAs). The Relative Strength Index (RSI) at 37 stays below the midline, while the Moving Average Convergence Divergence (MACD) indicator is negative, both reinforcing a soft downside tone even as oversold conditions are not yet extreme.

On the topside, initial resistance emerges at the nearby horizontal barrier of $3,900, followed by the psychological $4,000 level, ahead of the 21-day SMA at $4,030, which caps any stronger recovery. Above there, the 50-day SMA at $4,154 and the 100-day SMA at $4,197 form a broader supply zone.

On the downside, Thursday’s low of $3,852 offers immediate support, followed by the $3,800 psychological level. A break below $3,800 could open the door to a deeper decline.

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

Producer inflation in the United States (US), as measured by the change in the Producer Price Index (PPI), climbed to 6.5% in October from 6.3% in September, the US Bureau of Labor Statistics (BLS) reported on Friday. This print came in slightly below the market expectation of 6.6%.

On a monthly basis, the PPI increased by 0.3% following the 1.4% (revised from 1.3%) increase recorded in September.

The PPI ex Food & Energy rose by 0.3% and 5% on a monthly and yearly basis, respectively, with both of these figures matching analysts' estimates.

Market reaction to US producer inflation data

The US Dollar (USD) Index edged lower with the immediate reaction to the PPI data and was last seen down 0.05% on the day at 103.10.

• EUR/GBP trims earlier gains as mixed Eurozone data limit the Euro's upside.
• Eurozone employment stagnates in the third quarter despite steady economic growth.
• Stronger UK growth and hawkish BoE expectations lend support to the Pound.

EUR/GBP pares back some of its earlier gains on Friday as mixed Eurozone data temper the Euro’s (EUR) advance against the British Pound (GBP). The pair is still slightly higher on the day and remains stuck in a tight range near its April 2025 lows. At the time of writing, EUR/GBP trades around 0.8355 after easing from an intraday high of 0.8363.

Preliminary Eurozone data showed that Gross Domestic Product (GDP) grew 0.4% QoQ and 1.3% YoY in the third quarter, both in line with expectations. Employment was flat on the quarter, missing forecasts for a 0.2% rise after a 0.1% increase in the previous quarter. Annual employment growth slowed to 0.4% from 0.5%.

The European Central Bank (ECB) reiterated this week that it would set rates meeting by meeting as it assesses how higher energy costs feed through to prices and wages. Its latest Economic Bulletin warned that the energy shock could push inflation higher and weigh on growth, while underlying price pressures have so far remained broadly stable.

All 71 economists in Thursday’s Reuters poll expect the ECB to raise its deposit rate by 25 basis points to 2.75% in December. Most see that as the final hike of the cycle, while 25 expect another increase, most likely in early 2027.

On the UK side, the Bank of England (BoE) raised its benchmark rate by 25 basis points to 4.00% earlier this month in an 8-1 vote, with external Monetary Policy Committee (MPC) member Catherine Mann backing a larger half-point increase.

BoE Deputy Governor Clare Lombardelli said earlier this week that the “balance of risks to inflation remains to the upside.” She said the “energy shock has become more persistent,” raising the “prospect of second-round effects.”

UK rate expectations support Pound, with BoE seen moving above neutral

Strategists at Brown Brothers Harriman note that UK rate markets remain firmly priced for further BoE tightening, with the swaps curve still implying “about 70% odds of a back-to-back 25bps hike to 4.25% on December 17, and a total of 85bps of tightening over the next twelve months.” They point out that such a path “would push the policy rate well above the BoE’s estimated 2-4% neutral range, raising the risk of a sharper growth slowdown ahead.”

Nonetheless, BBH argues that “for now, resilient UK economic activity reinforces the case for additional BoE hikes, which is GBP positive, especially against EUR.”

Preliminary data released on Thursday showed that UK GDP grew 0.7% QoQ in the third quarter, up from 0.5% in the previous quarter. Annual growth accelerated to 1.9% from 1.4%. Both readings matched expectations.

The Japanese Yen (JPY) remains under sustained pressure near multi-month lows as USD/JPY pushes above the 160.00 level for a second consecutive session, prompting official warnings from Japanese Finance Minister Katayama regarding one-sided and rapid foreign exchange moves. While resilient domestic economic activity — highlighted by projected Q3 real GDP growth of 0.8% QoQ saar — and above-target inflation bolster expectations for a 25 bps Bank of Japan (BoJ) rate hike in December, upward revisions to Federal Reserve (Fed) tightening expectations are counteracting domestic policy support. Institutional strategists at DBS Group Research, Societe Generale, and Commerzbank are assessing whether technical breakouts above 160.00 will extend near-term Yen weakness toward 162.20 or if Japan’s shifting interest rate landscape will anchor a longer-term JPY recovery.

DBS expects solid growth and above-target inflation to justify December BoJ rate hike

Economists at DBS Group Research forecast Japan’s third-quarter real GDP to expand by 0.8% QoQ saar, underpinned by AI-driven export demand and wage-led domestic consumption. Although October trade figures are projected to show the trade deficit widening to JPY1.2 trillion despite 17% YoY export growth, persistent above-target inflation driven by higher energy costs and a weak Yen should reinforce the case for a 25 bps Bank of Japan rate hike in December.

"Real GDP is expected to expand by 0.8% qoq saar in 3Q, broadly in line with trend... October trade data are likely to show export growth remaining solid at 17% yoy, but the trade deficit widening to JPY1.2tn... Overall, these data should reinforce the case for a 25bp BOJ rate hike at the December policy meeting, with growth around trend, inflation above target, and continued pressure on external balance/exchange rate."

Societe Generale warns USD/JPY breakout above 160 risks further Yen losses toward 162.20

Kenneth Broux and colleagues at Societe Generale note that USD/JPY has broken above the upper boundary of its narrow consolidation range and reclaimed its 200-day moving average, trading above 160.00 for a second straight day before verbal warnings from Finance Minister Katayama tempered gains. With initial support established at the 200-day SMA near 158.70, a sustained push higher exposes the Japanese Yen to key resistance levels at 160.40/160.70 and 162.20.

"USD/JPY witnessed a sharp rebound in September and evolved within a narrow consolidation. It has now broken out above the upper limit of this rang denoting possibility of extension in bounce. The next potential hurdles could be located at April high of 160.40/160.70 and projections near 162.20... The pair has reclaimed the 200-DMA. If a short-term pullback develops, the moving average at 158.70 could be an important support... USD/JPY: 159.66 - 160.19 overnight range. Spot trades through 160 for second day before traders pare back on warning by FinMin Katayama one-sided action and rapid forex moves. Support 158.70, resistance 160.70."

Commerzbank sees Fed-BoJ policy convergence capping near-term Yen gains before structural recovery

Volkmar Baur at Commerzbank argues that revised expectations for an additional Federal Reserve rate hike in March neutralize the currency impact of projected Bank of Japan rate increases in December and next spring. Because parallel tightening signals central bank convergence rather than divergence, Commerzbank sees limited near-term upside for the Japanese Yen — projecting only a modest move toward 155.00 by mid-2027 — before structurally more attractive domestic bond yields support a sustained longer-term JPY recovery.

"This reassessment of our US central bank expectations naturally impacts our forecast for the Japanese yen as well. Our economists no longer expect the US central bank to halt its interest rate hikes in December. Instead, they have factored in a further rate rise by the Fed in March... While we also expect the Bank of Japan to implement two further rate rises - in December and in spring next year - this no longer favours the Japanese yen. Rather, it signals a convergence between the central banks, which will likely have little impact on the currency... Consequently, we see little potential for the Japanese yen in the near future. In recent days, the yen has already weakened slightly due to rising market expectations regarding the Fed, and is currently trading just below USD-JPY 160. By the middle of next year, we now expect only a slight appreciation towards 155... In the longer term, however, we continue to expect the JPY to strengthen. The structural shift in Japan’s interest rate landscape means that domestic bonds are once again significantly more attractive, particularly for Japanese investors."

Key Takeaway

The Japanese Yen faces a tug-of-war between strengthening domestic macro fundamentals and persistent external rate pressures near the 160.00 level. While DBS Group Research emphasizes that trend GDP growth (0.8% QoQ saar) and sticky inflation firmly justify a 25 bps BoJ rate hike in December, Societe Generale warns that USD/JPY’s technical breakout above its 200-day SMA (158.70) leaves the Yen vulnerable to testing 160.40/160.70 and 162.20 unless official intervention halts the move. Ultimately, Commerzbank underscores that parallel Federal Reserve tightening into March will cap near-term JPY appreciation near 155.00, delaying a more durable Yen turnaround until higher Japanese bond yields attract sustained domestic capital inflows over the longer term.

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

• EUR/USD languishes a few pips above 19-month lows at 1.1045, on track for a 1.5% decline in the last three weeks.
• The US Dollar surges across the board as investors ramp up bets for a 50-basis-points Fed rate hike in December.
• US PPI data is expected to add to evidence of the elevated inflation pressures in the US economy

The Euro (EUR) extends losses on Friday as mixed Eurozone macroeconomic data failed to offset the broad US Dollar's (USD) strength, with US Treasury yields surging amid speculation of a large Federal Reserve (Fed) rate hike next month. The EUR/USD pair languishes a few pips above 19-month lows at 1.1045 as investors await US Producer Price Index (PPI) figures, due in a few minutes.

Producer inflation is expected to have accelerated to 6.6% year-on-year (Y-o-Y) in October, its highest level since 2022, in the aftermath of the COVID-19 crisis, up from 6.3% in September. Core inflation is expected to have remained growing at a steady 5% Y-o-Y rate, all in all showing levels that support calls for a tighter monetary policy.

Mixed Eurozone data fails to support the Euro

Preliminary data from the Eurozone released earlier in the day revealed that the region's economy grew at a steady 0.4% pace in the third quarter as measured by Gross Domestic Product (GDP), while the yearly growth maintained a steady 1.3% growth pace, unchanged from the previous quarter and in line with market expectations.

On the negative side, Preliminary Q3 Employment Change data showed a 0.1% rise against expectations of an improvement to 0.2% after another 0.1% uptick in Q2. Beyond that, September’s Trade Balance showed a EUR 10.3 billion deficit, an improvement from the EUR 16.6 billion trade gap posted in August but more than twice the EUR 4.5 billion shortfall expected by the market.

Dollar surges as Fed hike expectations drive short-end yields higher

Meanwhile, the US Dollar maintains a bid tone, buoyed by a sharp recovery in US Dollar yields, as Federal Reserve (Fed) policymakers open the door for an XL rate hike at its December meeting.

Analysts at ING observe that “This week has seen a powerful, macro-driven rally in the Dollar,” with the move closely tied to a sharp repricing of the Fed’s near-term policy path.

“Short-dated US yields are close to 40bp higher since Tuesday morning, when the Fed's Christopher Waller mused over the need for a 50bp hike in December,” according to ING experts, who also affirm that “the market has since adopted the view that back-to-back December and January hikes look likely,” to explain how swiftly rate expectations have shifted in favour of the Dollar.

• NZD/USD depreciates for the fourth consecutive day and tests 19-month lows near 0.5527.
• Market expectations of a steeper Fed tightening pace have heightened the monetary divergence with the RBNZ.
• Below 0.5527, bears might be attracted by the 0.5470-0.5485 zone, the lowest levels since the 2009 financial crisis.

The New Zealand Dollar (NZD) heads lower for the fourth consecutive day against the US Dollar (USD) on Friday, as speculation of a jumbo rate hike by the Federal Reserve (Fed) has increased the monetary divergence with the Reserve Bank of New Zealand (RBNZ). The NZD/USD pair is testing 19-month lows near 0.5527 as of writing, on track for its third consecutive weekly drop.

Rising bets for a 50-basis-point hike by the Fed at the December 8-9 meeting have sent US Treasury yields jumping this week, triggering a sharp US Dollar rally.

Brown Brothers Harriman’s Elias Haddad acknowledges that the recent Dollar advance “may look stretched in the near-term,” but he argues that the fundamental backdrop continues to favor further strength. “Robust US growth, favorable labor market conditions and sticky underlying inflation keep the bias tilted higher,” says Haddad.

The New Zealand Dollar, on the other hand, has remained on its back foot since the RBNZ left its Official Cash Rate (OCR) unchanged at 2.75% in late October, against market expectations of a quarter-point rate hike.

The provisional results from last weekend’s elections provided a mild boost to the NZD earlier in the week, although rallies have been short-lived, with all eyes on the RBNZ Inflation Expectations, due next Tuesday, for further insight into the direction of December’s monetary policy decision.

Technical Analysis: Below 0.5527, the next targets are the 17-year lows around 0.5480

NZD/USD trades at 0.5536, keeping a bearish near-term bias, with the 19-month low at 0.5527 at a short distance. The 4-hour Relative Strength Index (14) at 32.47 hovers just above oversold territory, while the Moving Average Convergence Divergence (MACD) indicator remains below zero, together suggesting that downside pressure persists even as the pair approaches stretched conditions.

Bears, so far, remain contained above the 127.2% Fibonacci retracement of the mid-October rebound, at 0.5524, which is closing the path towards the 0.5470-05485 area, the lowest trading levels since the 2009 crisis. On the topside, initial resistance is seen at the previous support area between 0.5565 and the horizontal cap at 0.5580. A confirmation above this level would ease bearish pressure and expose the late October and early November highs near 0.5660.

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

Brown Brothers Harriman’s (BBH) Elias Haddad notes Brent Oil prices have bounced back just above their 200‑day moving average near $94.36 per barrel after touching the lowest level since late August at $89.16 earlier in the week. This move comes alongside a stronger Dollar and higher US yields, with equities mixed and Nvidia-related concerns weighing on broader risk sentiment.

Brent recovers from recent lows

"Brent crude oil prices bounced back just above its 200-day moving average ($94.36 a barrel) after hitting its lowest level since late August at $89.16 on Tuesday."

"Equity markets are mixed."

"Nvidia’s leadership turmoil is raising concerns over disruption to the broader AI industry, including the risk of tighter US chip export curbs on China."

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

• Japanese intervention fears cap USD/JPY gains as bets on further Fed rate hikes support the US Dollar.
• USD/JPY breaks out of its recent range and holds above the 100-day and 200-day SMAs.
• RSI near 64 and a positive MACD point to firm upside momentum.

USD/JPY treads water near 160.00 on Friday as the risk of Japanese intervention limits gains despite a stronger US Dollar (USD). The pair is up 0.91% so far this week and remains on track for a third straight weekly gain as growing bets on further Federal Reserve (Fed) rate hikes keep the US-Japan yield gap in the Dollar’s favour.

Japanese Prime Minister Sanae Takaichi said on Friday that the government would strive to preserve an “orderly foreign exchange market,” adding that Japan remains in close contact with US financial authorities.

Japan rate convergence seen capping near-term yen gains

Analysts at Commerzbank argue that the Bank of Japan’s expected tightening will do little to support the currency in the short term. “While we also expect the Bank of Japan to implement two further rate rises – in December and in spring next year – this no longer favours the Japanese yen. Rather, it signals a convergence between the central banks, which will likely have little impact on the currency,” they write.

Against this backdrop, Commerzbank notes that “we see little potential for the Japanese yen in the near future,” pointing out that “in recent days, the yen has already weakened slightly due to rising market expectations regarding the Fed, and is currently trading just below USD-JPY 160.” The bank now looks for only limited gains over the coming quarters, stating that “by the middle of next year, we now expect only a slight appreciation towards 155.”

Technical analysis

USD/JPY rebounded sharply from its September low of 152.89 before settling into a narrow trading range. The latest leg higher takes the pair above that range and the 100-day and 200-day Simple Moving Averages (SMAs) at 158.97 and 158.74, respectively.

The immediate focus is on the horizontal barrier at 160.00, which sits just above the market and acts as nearby resistance, while a firming Relative Strength Index (RSI) around 64 and a positive Moving Average Convergence Divergence (MACD) reading reinforce upward momentum rather than challenge the supportive price structure.

On the topside, a sustained break above the initial resistance at 160.00 would expose the next hurdles at 161.00 and 162.00, where prior supply is likely to re-emerge. On the downside, initial demand is seen around the current area backed by the 100-day SMA at 158.97 and the 200-day SMA at 158.74, ahead of deeper support at the 50-day SMA near 157.44 and the horizontal floor at 156.00.

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

• WTI Oil retreats below $87.00 on Friday after being capped at $88.20.
• Market expectations that a steeper Fed tightening pace will limit US Oil consumption are weighing on prices.
• US Oil stocks data revealed unexpected buildups in the week of November 6, contributing to ease concerns about supply.

Oil prices show a moderate pullback on Friday as market expectations that a more aggressive Federal Reserve (Fed) monetary tightening will cap Oil consumption in the US have offset concerns about the stalled Middle East conflict. The US benchmark West Texas Intermediate (WTI) Oil eases 1.2% in the day, following a more than 3% rebound on Thursday, and reaches session lows below $87.00.

Recent US Consumer Price Index (CPI) data released earlier this week has triggered speculation, supported by comments from key Fed officials, that the US central bank might deliver a half-point rate hike in December and accelerate its monetary tightening pace over the coming months. This would curb US economic growth and, most likely, weigh on Oil consumption.

US Oil stocks increase against expectations

Beyond that, data from the US Energy Information Administration (EIA) revealed that Crude Oil stocks increased by 4,657 million barrels in the week ending on November 6, against market expectations of a 1.1 million barrel drawdown and following a 0.8 million barrel drop in the previous week. 

These numbers follow a similar outcome in a previous report by the American Petroleum Institute (API) and have contributed to easing concerns about an Oil shortage, at least for now.

News from the Middle East, on the other hand, is keeping Crude Oil prices from retreating further. Diplomatic efforts to bring Washington and Tehran back to the negotiating table seem stalled, and US President Trump crushed remaining hopes of a breakthrough, affirming that “we don’t need a deal with Iran.”

Trump also affirmed that the US controls the Strait of Hormuz, but attacks on vessels attempting to cross the waterway, which carried about 20% of the global supply before the war, have increased over the last few weeks, casting serious doubts about the credibility of that statement.

(This story was corrected on November 13 at 11:05 GMT to correct the acronym of the American Petroleum Institute as API and not AIP as previously written.)

• The Indian Rupee retreats against the US Dollar as the latter continues to advance.
• Fears that the Fed would pace up its monetary tightening cycle have underpinned the US Dollar.
• India’s retail inflation accelerated to 6.09% YoY in October.

The Indian Rupee (INR) extends its previous day’s correction against the US Dollar (USD) on Friday after rallying in the past few weeks. The USD/INR pair rises further to near 94.24 after recovering from the five-month low of 93.61, as the US Dollar continues to outperform due to fears that the Federal Reserve (Fed) will follow a more aggressive monetary tightening approach amid accelerating United States (US) inflationary pressures.

During the day, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, posts a fresg 19-month high at 103.28.

Dollar Index hits fresh high as Fed hike expectations firm into year end

Analysts at MUFG note that the US Dollar has “continued to strengthen,” pushing the Dollar Index to “a fresh year-to-date high.” They argue that the Dollar’s “renewed upward momentum has been encouraged by expectations that the Fed is likely to speed up the pace of rate hikes in response to the recent run of stronger US inflation data.”

The US Consumer Price Index (CPI) data on Tuesday showed that both the headline and the core inflation growth was faster than expected at 0.4% and 0.3%, respectively, on a monthly basis.

Meanwhile, investors await the US Producer Price Index (PPI) data for October, which will be published at 13:30 GMT.

What lent strength to INR in the past few weeks?

Strategists at Societe Generale highlight the Indian Rupee as “the surprise star performer in EMs this month,” noting a total return of “+1.6% vs USD” driven by robust foreign portfolio demand. They point out that FPI inflows have already “topp[ed] $5bn” as investors broaden market bets “beyond AI-themed markets like South Korea and Taiwan,” while sentiment has also been buoyed by “optimism over Iran truce following US mid-term election that has deflated Brent toward $90/b.”

Rising India’s inflation growth paves way for more RBI interest rate hikes?

On Thursday, India’s CPI data for October arrived at 6.09% year-on-year (YoY), higher than 5.93% estimates and the prior release of 5.54%. This is the 12th straight month of a faster growth in inflation at retail level.

Such a scenario strengthens the case for an interest rate hike by the Reserve Bank of India (RBI) at the December policy meeting. Indian central bank hiked its key Repo Rate also in the October meeting by 25 basis points (bps) to 5.5%.

Analysts at Commerzbank Research highlight that, “more worryingly for RBI, this low base effect will persist into November and December, which is likely to keep inflation elevated above 6.0% throughout Q4 2026.” This reinforces their broader view that price pressures will remain near the top of the central bank’s target band well into the medium term, underpinning expectations for further policy tightening.

Technical Analysis: USD/INR recovers to near 94.25

In the daily chart, USD/INR trades at 94.24, keeping a bearish near-term tone as spot remains below the 20-day exponential moving average (EMA) at 94.58, which caps the topside.

The recent recovery in the Relative Strength Index (14) to 37.34 lifts the pair off oversold conditions but still suggests subdued bullish momentum while price trades under the key EMA barrier.

On the topside, immediate resistance is located at the 20-day EMA at 94.58, and a sustained break above this level would be needed to ease the current downside bias. On the downside, the five-month low of 93.61 is the key support level.

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