Forex News
Iran’s international citing domestic reports. It was reported that explosions were heard in Chabahar and Bandar Abbas.
Recently, Axios reported that the US Air Force struck Iranian targets around the Strait of Hormuz, citing sources
Market reaction:
West Texas Intermediate, the US crude Oil benchmark, rose to $89.90, though as of writing, it is up nearly 4%, due to a resumption of hostilities between the US and Iran.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
US Treasury Secretary Scott Bessent said on Tuesday that he emphasized the importance of sound formulation and communication of monetary policy to anchor inflation expectations in a meeting with Bank of Japan (BoJ) Governor Kazuo Ueda.
Bessent added that the support Japan’s steps to address the undervaluation of the Japanese Yen.
Key highlights:
I EMPHASIZED THE IMPORTANCE OF SOUND FORMULATION AND COMMUNICATION OF MONETARY POLICY TO ANCHOR INFLATION EXPECTATIONS IN MEETING WITH THE BANK OF JAPAN GOVERNOR.
I EXPRESSED STRONG SUPPORT FOR JAPAN'S DECISIVE MARKET AND MONETARY STEPS TO ADDRESS THE SUBSTANTIAL UNDERVALUATION OF THE YEN.
I TOLD THE BOJ GOVERNOR TO AVOID EXCESS FX RATE VOLATILITY.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.26% | 0.18% | 0.22% | 0.33% | 0.16% | 0.30% | 0.47% | |
| EUR | -0.26% | -0.07% | 0.00% | 0.09% | -0.08% | 0.06% | 0.21% | |
| GBP | -0.18% | 0.07% | 0.04% | 0.17% | -0.03% | 0.11% | 0.28% | |
| JPY | -0.22% | 0.00% | -0.04% | 0.11% | -0.08% | 0.08% | 0.22% | |
| CAD | -0.33% | -0.09% | -0.17% | -0.11% | -0.19% | -0.05% | 0.12% | |
| AUD | -0.16% | 0.08% | 0.03% | 0.08% | 0.19% | 0.15% | 0.29% | |
| NZD | -0.30% | -0.06% | -0.11% | -0.08% | 0.05% | -0.15% | 0.17% | |
| CHF | -0.47% | -0.21% | -0.28% | -0.22% | -0.12% | -0.29% | -0.17% |
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).
- NZD/USD declines on Tuesday as the US Dollar holds onto modest gains.
- US manufacturing activity loses momentum in August, while job openings come in slightly below expectations.
- Investors now turn their attention to the Reserve Bank of New Zealand’s monetary policy decision on Wednesday.
NZD/USD trades around 0.5900 on Tuesday at the time of writing, down 0.24% on the day. The New Zealand Dollar (NZD) remains under pressure against the US Dollar (USD), which holds onto modest gains despite the release of mixed United States (US) economic data.
The Institute for Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) falls to 54.6 in August from 55.6 in July, below the market consensus of 55.2. The indicator nevertheless remains well above the 50 threshold, signaling that US manufacturing activity continues to expand, albeit at a slower pace.
Looking at the details, the Employment Index declines to 51.2 from 52.8 previously, while the New Orders Index eases to 53.7 from 56.7 in July. Meanwhile, the Prices Paid Index remains unchanged at 71.1, indicating that price pressures remain elevated.
Labor market data also provide a mixed signal. The Bureau of Labor Statistics (BLS) reports that job openings, as measured by the Job Openings and Labor Turnover Survey (JOLTS), rise to 7.271M in July from 7.182M in June but remain slightly below the 7.3M expected. Hires and total separations are little changed at 5.1M.
The releases fail to trigger a significant reversal in the US Dollar. The US Dollar Index (DXY), which tracks the value of the Greenback against a basket of six major currencies, posts gains around 99.65 on Tuesday. The resilience of the Greenback therefore keeps NZD/USD under pressure despite the slightly weaker-than-expected US figures.
Investors’ attention now shifts to the Reserve Bank of New Zealand (RBNZ), which is due to announce its monetary policy decision on Wednesday. New Zealand’s interest-rate outlook could become the main near-term catalyst for the New Zealand Dollar, while markets also assess the implications of the latest US economic data for the Federal Reserve’s (Fed) monetary policy path.
NZD outlook softens as RBNZ risks underwhelming hawkish expectations
Analysts at ING expect the RBNZ to deliver a widely anticipated 25bp hike to 2.75% at tomorrow’s meeting, noting that “consensus is unanimous and markets are fully pricing in the move.” With the rate increase itself unlikely to surprise, ING argues that the reaction in the New Zealand Dollar will hinge on “whether the statement will still include firmly hawkish guidance, and on updated rate/economic projections.”
ING highlights “some downside risks for NZD,” pointing out that current market pricing of “95bp by June 2027 looks way too hawkish.” To justify that path, they say “the Reserve Bank would need to revise rate projections materially higher, as they currently embed only another 25bp hike for the next three quarters.” However, ING adds, “we don’t think they will, as we instead expect CPI projections to be revised lower on the back of softer oil prices.”
Against that backdrop, ING sees scope for renewed currency weakness, stating that “we see NZD/USD trading back below 0.590 in the near term as the RBNZ may fail to meet hawkish expectations and USD finds some support.”
New Zealand Dollar Price Today
The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies today. New Zealand Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.22% | 0.16% | 0.18% | 0.34% | 0.12% | 0.23% | 0.42% | |
| EUR | -0.22% | -0.05% | -0.04% | 0.12% | -0.10% | -0.00% | 0.19% | |
| GBP | -0.16% | 0.05% | 0.02% | 0.18% | -0.05% | 0.05% | 0.24% | |
| JPY | -0.18% | 0.04% | -0.02% | 0.17% | -0.07% | 0.06% | 0.22% | |
| CAD | -0.34% | -0.12% | -0.18% | -0.17% | -0.24% | -0.14% | 0.06% | |
| AUD | -0.12% | 0.10% | 0.05% | 0.07% | 0.24% | 0.11% | 0.29% | |
| NZD | -0.23% | 0.00% | -0.05% | -0.06% | 0.14% | -0.11% | 0.19% | |
| CHF | -0.42% | -0.19% | -0.24% | -0.22% | -0.06% | -0.29% | -0.19% |
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 New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).
- Gold slides further on Tuesday after reversing from a more-than-three-month high last week.
- Hawkish Fed expectations and rising Treasury yields keep the precious metal under pressure.
- XAU/USD tests a key support zone as momentum shifts in favour of sellers.
Gold (XAU/USD) extends its pullback from the more-than-three-month high touched last week and falls to a fresh two-week low on Tuesday. Rising expectations of Federal Reserve (Fed) interest rate hikes and fresh tensions in the Middle East remain the main drivers behind the latest leg lower. However, softer-than-expected US economic data help cushion the downside.
At the time of writing, XAU/USD trades around $4,373, down nearly 1.68% on the day after touching an intraday low of $4,326.
The ISM Manufacturing Purchasing Managers Index (PMI) fell to 54.6 in August from 55.6 in July, missing the market forecast of 55.2. The ISM Prices Paid Index held steady at 71.1, below expectations of 72.0, while JOLTS Job Openings rose to 7.271 million in July from 7.182 million but fell short of the 7.3 million forecast.
Despite the data misses, expectations that the Fed could raise interest rates as soon as this month keep the US Dollar and Treasury yields supported. The US Dollar Index (DXY) is trading around 99.64, up 0.23% on the day. Meanwhile, the benchmark 10-year US Treasury yield hovers around 4.76% after touching 4.80%, its highest level since January 2025.
A firmer US Dollar makes Dollar-denominated Gold more expensive for overseas buyers, while higher Treasury yields increase the opportunity cost of holding the non-yielding metal.
Chair Kevin Warsh’s tough rhetoric on inflation at the Jackson Hole Symposium revived rate hike bets, with the CME FedWatch Tool showing around a 65% probability of a hike at the September 15-16 meeting, up from roughly 40% a week ago.
Fed Governor Michael Barr added to the hawkish tone on Tuesday, saying that “the persistence of inflation above target creates risks.” Barr said he favours steady rates if confident inflation is moderating but warned that “if inflation doesn’t moderate soon, it will be time for an interest rate hike.”
At the same time, rising Oil prices are adding to inflation concerns and reinforcing expectations that major central banks may need to keep monetary policy tight. West Texas Intermediate (WTI) Oil advances for a second consecutive day following the latest flare-up around the Strait of Hormuz.
Typically, inflation and geopolitical concerns support Gold. However, the market is currently reacting through the interest rate channel, and the metal tends to perform poorly when interest rates and Treasury yields rise.
Sellers are therefore likely to retain the upper hand in the near term, although upcoming US economic data and developments in the Middle East could trigger fresh volatility. Attention now shift to the ADP Employment Change report on Wednesday and the closely watched Nonfarm Payrolls (NFP) report on Friday.
Technical analysis: XAU/USD extends decline, eyes support near $4,350
On the daily chart, XAU/USD extends its decline below the 200-day SMA and is now testing the 100-day SMA near $4,365, a level that also aligns closely with the 50% Fibonacci retracement at $4,350, forming a key support zone. A daily close below this cluster would tilt the near-term bias bearish, exposing the 61.8% retracement near $4,267.
The Relative Strength Index (RSI) at 49 sits near the midline, hinting at balanced conditions, while the Moving Average Convergence Divergence (MACD) indicator is in negative territory, suggesting waning bullish momentum after the recent pullback.
On the downside, a break below the $4,350-$4,365 support zone would open the door toward $4,267 (61.8% retracement), followed by $4,149 (78.6% retracement) and the prior cycle low near $4,000.
On the upside, initial resistance emerges at $4,432 (38.2% retracement), with a stronger barrier near $4,530 (200-day SMA) and $4,534 (23.6% retracement). A sustained break above this zone would open the path toward the $4,700 region.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator
ISM Manufacturing PMI
The Institute for Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging business activity in the US manufacturing sector. The indicator is obtained from a survey of manufacturing supply executives based on information they have collected within their respective organizations. Survey responses reflect the change, if any, in the current month compared to the previous month. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the US Dollar (USD). A reading below 50 signals that factory activity is generally declining, which is seen as bearish for USD.
Read more.Next release: Tue Sep 01, 2026 14:00
Frequency: Monthly
Consensus: 55.2
Previous: 55.6
Source: Institute for Supply Management
The Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers Index (PMI) provides a reliable outlook on the state of the US manufacturing sector. A reading above 50 suggests that the business activity expanded during the survey period and vice versa. PMIs are considered to be leading indicators and could signal a shift in the economic cycle. Stronger-than-expected prints usually have a positive impact on the USD. In addition to the headline PMI, the Employment Index and the Prices Paid Index numbers are watched closely as they shine a light on the labour market and inflation.
US Treasury Secretary Scott Bessent said on Tuesday that Japan is taking the right steps for its economy, and that G20 finance ministers want more growth.
Furthermore, Bessent said it’s unclear whether G20 ministers will take the “steps necessary” to achieve higher economic growth, noting that the world needs to protect trade and factory jobs from China’s exports.
Key highlights:
I THINK THAT JAPAN IS TAKING RIGHT STEPS FOR ECONOMY
G20 MINISTERS WANT MORE GROWTH
UNCLEAR WHETHER G 20 MINISTERS WILL TAKE STEPS NECESSARY TO ACHIEVE HIGHER GROWTH
I EXPECT EVERYONE TO COME ALONG WITH US ON IRAN.
IMBALANCES CREATED BY SOME COUNTRIES ARE REDUCING GROWTH ELSEWHERE. I HAVE BEEN TALKING ABOUT IMBALANCES AT THE G20.
IMBALANCES CREATED BY SOME COUNTRIES ARE REDUCING GROWTH ELSEWHERE
REST OF THE WORLD NEEDS TO TAKE STEPS TO PROTECT TRADE, FACTORY JOBS FROM CHINA’S EXPORTS
SEVERAL LOW-INCOME NATIONS MAY NEED DEBT RESTRUCTURING.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.23% | 0.16% | 0.21% | 0.31% | 0.13% | 0.23% | 0.39% | |
| EUR | -0.23% | -0.06% | 0.00% | 0.12% | -0.09% | -0.02% | 0.15% | |
| GBP | -0.16% | 0.06% | 0.04% | 0.19% | -0.04% | 0.06% | 0.22% | |
| JPY | -0.21% | 0.00% | -0.04% | 0.11% | -0.08% | 0.03% | 0.17% | |
| CAD | -0.31% | -0.12% | -0.19% | -0.11% | -0.20% | -0.10% | 0.04% | |
| AUD | -0.13% | 0.09% | 0.04% | 0.08% | 0.20% | 0.10% | 0.25% | |
| NZD | -0.23% | 0.02% | -0.06% | -0.03% | 0.10% | -0.10% | 0.16% | |
| CHF | -0.39% | -0.15% | -0.22% | -0.17% | -0.04% | -0.25% | -0.16% |
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).
- The Australian Dollar edges lower on Tuesday but holds within its recent range.
- The US Dollar remains supported by Fed rate hike expectations.
- Markets turn their attention to Australia’s upcoming GDP report.
AUD/USD trades with a modest downside bias on Tuesday as softer-than-expected United States (US) economic data fail to generate sustained selling pressure on the US Dollar (USD). Competing hawkish expectations for the Federal Reserve (Fed) and the Reserve Bank of Australia (RBA) keep the pair range-bound, with the Australian Dollar holding within reach of the 0.7206 high touched last week, its strongest level since May 14.
At the time of writing, AUD/USD trades around 0.7157, down roughly 0.11% on the day.
The ISM Manufacturing Purchasing Managers Index (PMI) fell to 54.6 in August from 55.6 in July, missing the market forecast of 55.2. The ISM Prices Paid Index held steady at 71.1, below expectations of 72.0, while JOLTS Job Openings rose to 7.271 million in July from 7.182 million but fell short of the 7.3 million forecast.
The Greenback weakened briefly following the releases before regaining traction. The US Dollar Index (DXY), which measures the US currency against a basket of six major currencies, trades around 99.64, up 0.23% on the day.
The limited reaction reflects persistent expectations that the Fed could raise interest rates in September following Fed Chair Kevin Warsh’s tough stance on inflation at the Jackson Hole Symposium. According to the CME FedWatch Tool, traders see around a 66% probability of a rate hike at the September 15-16 meeting.
Elevated Oil prices due to tensions in the Middle East are adding to global inflation risks, potentially complicating the Fed’s efforts to return inflation to its 2% target while also intensifying price pressures in Australia. Inflation is already proving sticky in the Australian economy, prompting the RBA to deliver three rate hikes earlier this year, while hotter-than-expected July Consumer Price Index (CPI) data strengthen the case for further monetary policy tightening.
The Aussie also draws support from upbeat Chinese data, given Australia’s close trade ties with China. China’s RatingDog Manufacturing PMI rose to 51.5 in August from 50.9. Attention now turns to Australia’s second-quarter Gross Domestic Product (GDP) data, due on Wednesday.
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.21% | 0.14% | 0.19% | 0.30% | 0.12% | 0.22% | 0.37% | |
| EUR | -0.21% | -0.06% | 0.02% | 0.09% | -0.09% | -0.01% | 0.15% | |
| GBP | -0.14% | 0.06% | 0.06% | 0.16% | -0.05% | 0.06% | 0.21% | |
| JPY | -0.19% | -0.02% | -0.06% | 0.11% | -0.08% | 0.03% | 0.16% | |
| CAD | -0.30% | -0.09% | -0.16% | -0.11% | -0.20% | -0.11% | 0.05% | |
| AUD | -0.12% | 0.09% | 0.05% | 0.08% | 0.20% | 0.10% | 0.24% | |
| NZD | -0.22% | 0.00% | -0.06% | -0.03% | 0.11% | -0.10% | 0.16% | |
| CHF | -0.37% | -0.15% | -0.21% | -0.16% | -0.05% | -0.24% | -0.16% |
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 Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
Commerzbank’s Dr. Ralph Solveen analyzes how the Saxony-Anhalt election and two subsequent votes in Berlin and Mecklenburg-Western Pomerania could strain Germany’s CDU/CSU–SPD coalition. He highlights likely poor results for traditional parties, potential leadership changes at the SPD, and diverging policy responses to AfD strength, suggesting that planned federal reforms will become more difficult but the coalition should survive.
AfD gains complicate federal reforms
"For the financial markets – at least in the short term – the significance of this election stems primarily from its potential impact on the current governing coalition the Christian Democrats (CDU), their Bavarian sister party CSU and the Social Democrats (SPD) at the federal level."
"... however, it is likely to be more important that the CDU and SPD’s projected poor showing would put noticeable strain on the coalition at the federal level, thereby further complicating the upcoming reforms."
"But even if the coalition at the federal level – as we expect – will survive the upcoming elections, the election results in the three Eastern German states will not make the planned reforms any easier."
"This is likely to complicate cooperation within the coalition."
"If the CDU were even to opt for a minority government – which would rely on votes from the AfD on many issues – the coalition at the federal level would be at risk."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- GBP/USD trades sideways as mixed US data limits conviction.
- Softer ISM manufacturing contrasts with resilient jobs-market signals.
- UK price pressures and Mann comments support BoE hike bets.
The Pound Sterling (GBP) trades sideways versus the US Dollar (USD) on Tuesday after mixed US economic data, with manufacturing activity dipping in August, while a strong jobs market backs Federal Reserve (Fed) Chair Kevin Warsh's hawkish tilt. The GBP/USD pair trades at 1.3540, down a modest 0.06%.
GBP/USD steadies as traders weigh US PMIs, jobs data and BoE risks
The ISM Manufacturing PMI in August fell to 54.6 from 55.6 in July and missed forecasts of 55.2. The Institute for Supply Management (ISM) said new orders slowed while input prices remained high, a sign that may motivate the US central bank to raise rates.
At the same time, the Job Openings and Labor Turnover Survey (JOLTS) report for July showed weak hiring, with vacancies increasing to 7.217 million, below forecasts of 7.3 million.
Recently, the labor market has been seen as solid, opening the door for further tightening by the Federal Reserve, which is battling inflation prints above the 2% target. Last Friday, Warsh said that the Fed still has “work to do” regarding price stability.
In the UK, BRC data show that retailers have raised prices the most since 2024, driven by higher energy, input, and commodity prices. Other data showed that the UK’s manufacturing activity expanded at its slowest rate since March.
Recently, Bank of England (BoE) Monetary Policy Committee (MPC) member Catherine Mann said that “interest rates should be a little bit too high and then of course correct if necessary.” She added that she has seen “somewhat stronger economic activity” since the last meeting to this one.
Money markets had priced in an 82% chance that the Bank of England will raise rates by the end of 2026, according to Prime Terminal.
Traders' eyes will be on Parliament's return this week as investors look for clues on how new Prime Minister Andy Burnham will fund his plans ahead of the October budget.
In the US, the docket will feature further jobs data, the ISM Services PMI and the Nonfarm Payrolls figures on Friday.
GBP/USD Price Forecast: Technical Outlook
In the daily chart, GBP/USD trades at 1.3528, holding a constructive bullish bias as it remains above the cluster of simple moving averages (SMA) and broken trend-line levels that now act as support between roughly 1.3383 and 1.3481. The 50/100/200-period SMA pack, last near 1.3436, sits below spot and reinforces an underlying bid, while the Relative Strength Index (RSI) at 50.8 hovers around neutral territory, hinting at a consolidative tone rather than runaway momentum.
On the downside, immediate support is seen at the former downward trend-line break around 1.3481, followed by the triple SMA zone near 1.3436 and the secondary rising-line floor at 1.3413, with deeper structural support emerging at the earlier resistance break near 1.3383. On the topside, the next significant hurdle is the rising support trendline’s break level around 1.3647, where a clear daily close above would open the way for a more decisive continuation of the broader GBP/USD uptrend.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.22% | 0.16% | 0.21% | 0.32% | 0.17% | 0.25% | 0.40% | |
| EUR | -0.22% | -0.05% | 0.00% | 0.10% | -0.05% | 0.02% | 0.17% | |
| GBP | -0.16% | 0.05% | 0.02% | 0.15% | -0.02% | 0.07% | 0.23% | |
| JPY | -0.21% | 0.00% | -0.02% | 0.12% | -0.05% | 0.04% | 0.17% | |
| CAD | -0.32% | -0.10% | -0.15% | -0.12% | -0.16% | -0.10% | 0.06% | |
| AUD | -0.17% | 0.05% | 0.02% | 0.05% | 0.16% | 0.08% | 0.22% | |
| NZD | -0.25% | -0.02% | -0.07% | -0.04% | 0.10% | -0.08% | 0.16% | |
| CHF | -0.40% | -0.17% | -0.23% | -0.17% | -0.06% | -0.22% | -0.16% |
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 British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
Deutsche Bank economists Sanjay Raja and Maui Brennan say the UK enters autumn as the fastest-growing G7 economy, helped by strong ICT and AI-related investment and improving productivity. However, they expect second-half growth to slow as temporary supports from the hot summer and World Cup fade, higher energy prices bite, and retail spending fatigue and seasonal drags weigh on activity, squeezing real disposable incomes.
Growth momentum set to moderate
"The UK heads into the autumn as the fastest growing G7 economy. Hopes of a productivity revival are rising. Signs of a labour market stabilisation are brewing."
"Brace for a slowdown - but track AI investment. The UK economy has been on a tear lately. No other G7 economy has grown faster than the UK this year."
"But all tell-tale signs point to a slowdown in H2-26. Why? For starters, one-off supports to GDP growth from a sun-soaked summer and World Cup will naturally fade."
"While spending in the first half of the year may have been buoyed by credit card lending, we expect higher prices to squeeze real disposable incomes - particular as household dual fuel bills rise in Q3 onwards."
"Three, seasonal drags on momentum we think is also likely, with the UK unlikely to maintain an annualised growth pace of ~2% into H2."
“Inflation has hit its nadir, and emerging pressures are poised to see CPI rise well above the Bank’s target in the coming quarters.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- EUR/USD struggles to attract buyers as softer US data fail to meaningfully weaken the US Dollar.
- Hawkish Fed expectations keep the Greenback supported ahead of Friday’s Nonfarm Payrolls report.
- Eurozone inflation strengthens the case for an ECB hike in September.
EUR/USD struggles to attract buyers on Tuesday despite below-forecast US economic data, as the US Dollar (USD) shows little weakness following the release. At the time of writing, the pair trades around 1.1601 after touching an intraday low of 1.1587, but remains down roughly 0.14% on the day.
The ISM Manufacturing Purchasing Managers Index (PMI) fell to 54.6 in August from 55.6 in July, missing the market forecast of 55.2. The ISM Prices Paid Index held steady at 71.1, below expectations of 72.0, while JOLTS Job Openings rose to 7.271 million in July from 7.182 million but fell short of the 7.3 million forecast.
The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, retreats toward 99.55 after reaching an intraday high of 99.65. However, the downside in the US Dollar remains limited as the data do little to alter hawkish Fed expectations, with broader market sentiment still tied to inflation concerns.
Fed Chair Kevin Warsh’s tough stance at the Jackson Hole Symposium put September rate hike bets firmly back on the table. Adding to the hawkish tone, Fed Governor Michael Barr said on Tuesday that “the persistence of inflation above target creates risks.” Barr added that he favours steady rates if confident inflation is moderating but warned that “if inflation doesn’t moderate soon, it will be time for an interest rate hike.”
According to the CME FedWatch Tool, traders see around a 66% probability that the central bank will raise borrowing costs at its September 15-16 meeting. Attention now shifts to Friday’s Nonfarm Payrolls (NFP) report.
Elevated Oil prices due to tensions in the Middle East are also adding to inflation risks across major economies, reinforcing expectations that central banks will maintain a hawkish stance. Against this backdrop, the European Central Bank (ECB) is widely expected to raise interest rates this month.
Data released earlier in the day showed that the Eurozone Harmonized Index of Consumer Prices (HICP) rose 0.4% MoM in August, accelerating from the 0.2% increase recorded in July. Core HICP increased 0.2% after remaining flat in the previous month. ECB policymaker Gediminas Šimkus said on Tuesday, “It is clear that we should hike rates in September,” adding, “New projections are likely to move the rate path up a bit.”
Fed FAQs
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.
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.
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.
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.
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