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OCBC’s Christopher Wong notes that Bank Negara Malaysia (BNM) kept the OPR at 2.75% and struck a slightly firmer tone, with growth expected to stay resilient into 2027. The economist still projects an OPR normalisation to 3.00% in January 2027. Wong highlights that a relatively firm domestic backdrop should support the Malaysian Ringgit, but says near-term USD/MYR moves will track the broader USD, risk sentiment and global rates.

Ringgit supported but range-bound

"BNM kept the OPR unchanged at 2.75%, as expected, but the accompanying statement carried a slightly firmer tone. "

"BNM now expects the economy’s sound fundamentals to keep growth resilient into 2027, while flagging the need to remain vigilant to cost pressures and domestic demand conditions amid elevated global commodity prices."

"Notably, the MPC also dropped its previous description of the current policy stance as “appropriate”, retaining only that monetary policy stance remains consistent with price stability and sustainable growth."

"Our Economist continues to look for a normalisation of the OPR to 3.00% in Jan 2027. The relatively firm domestic backdrop should remain supportive of MYR, although near-term direction will continue to take its cue from the broader USD, risk sentiment and global rates environment."

"USD/MYR last seen at 4.0420 levels. Bearish momentum on daily chart faded while rise in RSI moderated. 2-way risks likely. Support at 4.0320 (100, 200 DMAs, 50% fibo), 4.02 levels. Resistance at 4.05, 4.0610 levels (38.2% fibo retracement of May low to Jun high). "

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

• USD/MXN trades near two-year lows as Peso strength persists.
• RSI deepens in bearish territory, supporting further downside risks.
• Break below 16.74 exposes 16.52 and 16.26 supports.

The Mexican Peso appreciates against the US Dollar, testing two-year highs near 16.85 as the USD/MXN sets aside a strong US Nonfarm Payrolls report, which was ignored by the Peso’s bears. At the time of writing, the emerging market pair trades at 16.88, poised to extend its losses and challenge the April 2024 lows at 16.74.

USD/MXN Price Forecast: Technical Outlook

Price action suggests that the downtrend is poised to extend, as USD/MXN approaches two-year lows. Bearish momentum continues to increase as the Relative Strength Index (RSI) dives further into bearish territory.

The first support area is the 16.50-mile milestone. Below the latter, the next stop is May’s 2024 monthly low of 16.52, ahead of a test of the 2024 yearly low of 16.26. Once surpassed, the next area of interest will be the 16.00 figure.

For a bullish reversal, buyers must clear the 17.00 level to remain hopeful of reaching higher prices. Up next, the August 19 high of 17.07 emerges as the next resistance. A decisive breakout will expose the 50-day Simple Moving Average (SMA) at 1725, immediately followed by the 100-day SMA at 17.30. Above sits the 200-day SMA at 17.48.

USD/MXN Price Chart – Daily

Commerzbank highlights that Bank Negara Malaysia kept the OPR at 2.75% but shifted to a more hawkish bias, removing language that policy is "appropriate" and signalling vigilance on cost pressures. Strong growth and benign inflation allow patience, yet the bank appears to prepare markets for a possible hike later this year or early 2027, with USD/MYR seen in a 4.00–4.07 range.

Hawkish BNM stance underpins MYR

"Bank Negara Malaysia (BNM) kept the Overnight Policy Rate (OPR) unchanged at 2.75% yesterday, as widely expected, but the statement contained a distinctly more hawkish tilt. The policy bias appears to have shifted from neutral towards tightening, although an imminent hike is not on the horizon."

"BNM removed the description of the current monetary-policy stance as "appropriate", which had appeared in every statement since September 2025, and instead said the current stance was "consistent with" price stability and sustainable growth. It also dropped July's assessment that overall price pressures would remain contained and said it would "remain vigilant to cost pressures and domestic demand conditions.""

"The shift reflects stronger-than-expected growth and growing concern that elevated global commodity prices stemming from the Middle East conflict could eventually feed through into domestic prices and wages. With inflation currently low and government fuel subsidies cushioning the energy-price shock, BNM can afford to wait. However, it appears to be preparing the market for a possible hike later this year or in early 2027."

"Growth remains strong, with GDP expanding 6.0% yoy in Q2 and 5.7% in H1, supported by stronger-than-expected exports, particularly technology-related demand, alongside resilient household spending and investment. BNM now expects 2026 GDP growth of around 5%, near the top of its previous 4-5% forecast range, and expects growth to remain resilient in 2027, supported by electronics and semiconductor industries, technology exports, tourism, investment, and stable labour-market conditions."

"Inflation remains relatively benign, with headline and core inflation averaging 1.8% and 2.0%, respectively, in the first seven months of 2026. BNM is projecting headline and core inflation at 1.5-2.5% and 1.8–2.3% for this year, respectively."

"USD/MYR was just slightly lower yesterday after BNM’s meeting, down 0.1% to 4.0420. The slightly more hawkish BNM tone and strong growth backdrop could provide some support for MYR. USD/MYR has traded between the 3.88-4.16 range this year, and we look for the 4.00-4.07 range for now."

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

• USD/CHF clears 50-day SMA after strong US payrolls.
• Bullish RSI supports recovery, but sideways trading likely persists.
• Break above 0.8150 exposes 0.8200 and yearly high.

The USD/CHF registers modest gains of over 0.30% as the Greenback is boosted by a solid US Nonfarm Payrolls report, pushing the pair above the 50-day Simple Moving Average (SMA) to reach a daily high of 0.8126. At the time of writing, trades at 0.8098.

USD/CHF Price Forecast: Technical Outlook

The USD/CHF trades just above the 50-day SMA but off daily highs, suggesting sellers have moved in to push the pair below 0.8100. Nevertheless, the overall trend remains upwards unless it falls below the August 20 swing low of 0.7949, which could exacerbate a move towards the 200-day SMA at 0.7932.

The Relative Strength Index (RSI) has turned bullish, but since it has pierced the 50-neutral level, USD/CHF is expected to trade sideways in the short term.

For a bullish resumption, USD/CHF needs to clear 0.8100. A move past that level can pave the way for a recovery towards 0.8150, with buyers setting their sights on 0.8200. Above the next area of interest is the yearly high at 0.8207.

On the downside, a decisive breakout below 0.8000 will expose the 100-day SMA at 0.7995, followed by the 0.7949 August 20 daily low. Beneath sits the 200-day SMA at 0.7932.

USD/CHF Price Chart – Daily

OCBC’s Christopher Wong notes that USD/IDR has pulled back as a softer Dollar and lower UST yields support the Indonesian Rupiah. He highlights Bank Indonesia Governor Destry Damayanti’s emphasis on a stability-first approach, prioritizing Rupiah and macro stability while still supporting growth. Wong sees near-term support for IDR but flags elevated Oil prices and high global yields as constraints.

Stability-first stance supports Rupiah

"Speaking at the Sarasehan 100 Ekonom Indonesia in Jakarta on Thursday, BI Governor Destry Damayanti reinforced the stability-first message she had set out earlier in the week, stressing that policy cannot be viewed solely through the domestic inflation lens given the “higher-for-longer” global rate environment and the need to keep Indonesian assets attractive to foreign investors."

"Her remarks were consistent with earlier signals of policy continuity, with rupiah and macro stability remaining key priorities even as BI continues to support growth through its broader policy mix."

"Together with the pullback in UST yields and softer USD, this should provide some near-term support to IDR, although elevated oil prices and still-high global yields remain constraints."

"Immediate support at 17620 (38.2% fibo retracement of 2026 low to high). If broken, opens way for next support at 17444 (50% fibo). Resistance at 17710 (100 DMA), 17800 levels (21 DMA)."

"USD/IDR closed at 17660. Momentum on daily chart is flat while RSI fell."

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

Commerzbank says China’s August Services PMI rebound highlights some resilience in private-sector activity, but weak retail sales, soft inflation and higher unemployment still point to fragile domestic demand. The stronger PMI reduces the urgency for immediate PBoC easing, while leaving room for further support if growth weakens into year-end.

Fragile demand keeps PBoC easing options open

"China's private services sector activity rebounded more strongly than expected in August, offering a bright spot in an otherwise subdued domestic demand picture. The RatingDog China Services PMI rose to 51.4 (Bloomberg consensus: 50.6) vs 50.4 in July."

"The print marks a recovery from a near two-year low in July and pushed the composite PMI to 52.1 from 50.8. The result stands in contrast to the official non-manufacturing PMI, which remained unchanged at 49.0 in August."

"The divergence between the private and official gauges warrants attention. The official non-manufacturing PMI, which captures a broader universe of state-linked service providers and includes construction, remained at 49.0, weighed down by a continued slump in construction activity."

"The August services PMI rebound, while encouraging, does not materially alter the broader policy calculus for the PBoC. Retail sales growth of just 0.6% yoy in July and a surveyed jobless rate that ticked up to 5.2% indicate that the consumption recovery remains uneven and fragile."

"With CPI running well below target and PPI softening, the PBoC retains room to ease further if growth conditions deteriorate into year-end. The services PMI print reduces the urgency of immediate action but does not close the door on RRR cuts or targeted lending facility expansions in the coming months."

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

• GBP/USD retreats as strong NFP lifts September Fed hike bets.
• Hammack comments reinforce hawkish pressure as policy remains restrictive.
• UK GDP and Retail Sales could shape BoE expectations.

The Pound Sterling (GBP) retreats some 0.09% against the US Dollar (USD) on Friday as the latest US inflation report reaffirmed Federal Reserve (Fed) Chair Kevin Warsh's view that the labor market is “consistent with full employment.” GBP/USD trades near the open at 1.3512.

GBP/USD slips as strong US jobs and Fed hawks support Dollar

The US Nonfarm Payrolls in August exceeded the forecast of 56K, coming in at 162K and above July’s print of 21 K. The Unemployment Rate was unchanged at 4.1%. The data reassured Fed officials that if needed, they can raise rates without harming the labor market.

Last week, Fed Chairman Kevin Warsh said the jobs market was “consistent with full employment” at Jackson Hole, where he took a hawkish stance and prioritized inflation.

On Friday, Cleveland Fed Beth Hammack noted that “policy is not restrictive and inflation is too high.” She added that “contact views indicate now is the time for the Fed to hike to control inflation.”

Meanwhile, money markets now assign a 61% probability of a rate increase by the Fed in September, up from 54% yesterday, via Prime Terminal.

Consequently, the US Dollar Index (DXY), which tracks the performance of the American currency against six peers, is up 0.18%, at 99.17.

Next week, traders will eye the release of the US Price Index (PPI), the Consumer Price Index (CPI), jobless claims data, the US Monthly Budget Statement and the University of Michigan Consumer Sentiment for September.

In the UK, Bank of England (BoE) Chief Economist Huw Pill said on Thursday that raising rates now would reduce the chance the central bank would need to be more aggressive in future to tame inflation, which has picked up as a result of the war in Iran.

The swap markets indicate that speculators expect the BoE to hike rates twice in six months. For the September meeting, economists anticipate unchanged rates.

In the UK, the schedule will feature Retail Sales and Gross Domestic Product (GDP) figures for July.

GBP/USD Price Forecast: Technical outlook

In the daily chart, GBP/USD trades at 1.3521, keeping a constructive near-term tone as it holds above a cluster of former trend-line resistances turned support around 1.3476–1.3375, while still capped by the simple moving average trio, which now converges near 1.3455 as immediate overhead resistance. The latest 14-period Relative Strength Index sits close to 50, hinting at neutral momentum and suggesting that a sustained break away from this moving average barrier would be needed to revive a stronger bullish extension.

On the topside, the first resistance is the simple moving average cluster near 1.3455, and a daily close above this area would open the way toward the next structural cap at the upward trend-line break level around 1.3657. On the downside, initial support is seen at the recent trend-line pivot near 1.3476, with further demand expected at the rising trend-line base around 1.3425 and the lower former resistance line near 1.3375, where buyers would likely try to defend the broader advance.

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

DBS Group Research economist Chua Han Teng notes that Bank Negara Malaysia (BNM) held the Overnight Policy Rate at 2.75% while dropping language that the current level is appropriate. DBS expects rates to remain unchanged through 2026 but sees risks tilted towards a one-off policy normalisation.

BNM holds but signals flexibility

"Bank Negara Malaysia (BNM) maintained its Overnight Policy Rate (OPR) at 2.75% on September 3, extending its pause for a seventh consecutive decision."

"We maintain our view for BNM to stay on hold for the remainder of 2026, given contained inflation amid a resilient economy, but see the balance of risk tilted towards a possible one-off policy normalisation."

"In its monetary policy statement, BNM notably flagged two key areas that warrant vigilance in assessing the inflation outlook."

"First, policymakers will continue to evaluate the still fluid and unresolved conflict in the Middle East, which will likely keep global commodity prices, particularly energy prices, elevated relative to a year ago, and generate upward cost pressures through the supply-side shock."

"Second, the authorities will monitor whether strong economic growth (potentially around 5% in 2026 and resilient in 2027), partly driven by robust artificial intelligence-related tailwinds, translates into stronger demand-pull price pressures due to rising wage growth. Thus far, the capital-intensive nature of this expansion has limited spillovers to domestic inflation."

"The door is now open for a normalisation of July 2025’s 25bps insurance OPR cut in subsequent meetings if incoming economic activity data and external developments evolve favourably and inflationary pressures rise."

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

OCBC’s Christopher Wong notes that strong foreign-currency inflows linked to the RBI’s special measures have bolstered the Indian Rupee (INR) and strengthened the central bank’s FX buffer. However, with the FCNR(B) window now closed, the exceptional near-term dollar supply is expected to fade, potentially leading to more two-way RBI management. Wong adds that USD/INR remains under bearish pressure, though oversold conditions may slow the pace of decline, with support at 94.30 and 94.15.

RBI-backed inflows support INR, but near-term dollar supply may fade

"USD/INR gapped down in the open yesterday. It was reported that RBI’s special measures attracted US$136.4bn of foreign-currency inflows, including US$127.2bn through FCNR(B) deposits."

"The scale of the inflows materially strengthens the RBI’s FX buffer, but has also pushed banking system liquidity to a record INR9.7tn and lifted its forward dollar liabilities to around US$137bn."

"With the FCNR(B) window now closed (as of 31 Aug), the exceptional near-term dollar supply should fade."

"Potentially, there may be more two-way management from here, with the RBI potentially using periods of INR strength to absorb USD or reduce its forward exposure rather than allowing appreciation to run unchecked."

"USD/INR closed at 94.50 levels. Bearish momentum on daily chart intact but RSI fell to oversold conditions. Moderation in pace of decline is not ruled out."

"Support at 94.30 levels, 94.15 (Jun low). Resistance at 96.74 (76.4% fibo), 95.10 (61.8% fibo retracement of Jun low to Jul high)."

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

Nordea expects Eurozone inflation dynamics to stay persistent, with headline inflation projected above the ECB’s target at least until spring 2027. They see recent data as slightly weaker than the ECB’s June projections, partly due to soft food prices, but anticipate only modest downward revisions. Core inflation is projected to remain above 2% through 2028, supporting further ECB rate hikes.

Inflation seen persistent and above target

"Beyond energy, recent headline inflation data have come in slightly weaker than the ECB projected in June, partly because of weak food price inflation."

"We therefore expect small downward revisions to the 2026 and 2027 headline inflation forecasts, although the adjustments are likely to be modest."

"Inflation should nevertheless remain above the ECB's target at least until spring 2027."

"Core inflation developments have been broadly in line with the June projections, and we therefore expect the projected core inflation profile to remain largely unchanged."

"This would imply that core inflation remains above 2% through the end of 2028, which, in our view, supports the case for further ECB rate hikes."

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