Forex News
- USD/JPY rises to its highest since mid-October, just short of 159.00.
- A BoJ summary shows members agree rates should keep rising, and the Yen falls.
- US producer prices for October land Friday, after a 1.3% September jump.
New US 10-year notes sold on Tuesday pay 5% a year, the most since 2006, and the Yen has dropped to its weakest against the Dollar since mid-October. The Dollar rose to just under 159.00 Yen, more than reversing Monday's drop and moving back above Friday's close.
Fed Vice Chair for Supervision Bowman said the October consumer price figures suggest inflation pressures may persist, and that inflation isn't on a downward trend. The Fed's 3.75%-4.00% range is 2.50-2.75 percentage points above the Bank of Japan (BoJ) rate of 1.25%, so a Dollar deposit pays roughly that much more than a Yen one.
A summary of the BoJ's October meeting, released on Tuesday, shows members generally agreed rates should keep rising, and the Yen still fell. The BoJ's expected December 18 hike to 1.50% would come nine days after a Fed move to 4.00%-4.25%, leaving the gap exactly where it is.
On the calendar
US weekly jobless claims are expected at 195K, against 189K, at 13:30 GMT on Thursday. Friday at 13:30 GMT brings October producer prices, with a 6.6% annual rise forecast after 6.3%, and both bear on how far US rates go above Japan's.
Japan's October producer prices are due at 23:50 GMT on Wednesday, forecast up 6.5% from a year earlier after 6.8%. They're among the last Japanese price figures before the BoJ's December 17-18 meeting, where most economists expect a hike to 1.50%.
On the charts
The Dollar is at the top of the range it has held against the Yen since September 24, which runs down to a low near 156.00 on October 23. That range is still well below the late-July peak near 164.00 and the September 2 high near 160.50.
USD/JPY daily chart
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
- EUR/USD loses most of Monday's gain, dipping to just below 1.1150.
- The Fed's lead over the ECB's 2.50% deposit rate could reach two points.
- ECB President Lagarde speaks twice before Friday's Eurozone GDP figures.
Five weeks into a 1.1100-1.1300 range, the Euro is still inside it after US consumer prices beat forecasts, though back in the lower half. It dropped to just below 1.1150, giving back nearly all of Monday's climb, and has edged back above that level.
Core US consumer prices rose 0.3% in October against a 0.2% forecast. Dallas Fed President Logan said two more quarter-point hikes are needed before a pause, and traders give a second one by January about 74%. Two hikes would put US rates 1.75-2.00 percentage points above the European Central Bank (ECB) deposit rate of 2.50%, unless the ECB hikes too.
ECB Chief Economist Lane said he'd set a high bar for signalling where ECB rates go next, on a day two Fed officials put a size on theirs. Eurozone inflation hit a three-year high of 4% in October, and money markets price two ECB hikes by mid-2027, which would narrow that gap for the Euro.
On the calendar
ECB President Lagarde speaks at 09:45 GMT on Wednesday and 19:30 GMT on Thursday, and ECB Executive Board member Schnabel at 07:10 GMT on Friday. Friday also brings updated Eurozone Gross Domestic Product (GDP) for the third quarter at 10:00 GMT, forecast at 0.4% growth, the same as the first reading. ECB President Lagarde's remarks and that figure bear on whether the ECB hikes in December too.
In the US, Cleveland Fed President Hammack, a voter this year, speaks on Thursday at 14:00 GMT. Friday's core producer price figure at 13:30 GMT is forecast to hold at 5% from a year earlier, as in September, with the Fed's December 9 hike already priced.
On the charts
The Euro moved into this range after a drop of about 5% from its late-August high near 1.1700. It has turned lower just short of the top repeatedly, most recently on November 5, and its October 14 and October 29 lows held just above the bottom.
EUR/USD daily chart
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- GBP/USD erases Monday's gain and drops to its lowest since late October.
- A December Fed hike would lift its floor to the UK's 4.00% Bank Rate.
- UK third-quarter growth figures are due Thursday, forecast at 0.7%.
The UK's Bank Rate is level with the top of the Fed's 3.75%-4.00% range, and a hot US inflation report has left a December Fed hike fully priced. The Pound has given back all of Monday's rise, dropping to just above 1.3300 for its lowest since late October, and has steadied near 1.3350.
Fed Governor Waller said in London that a December hike is likely and a half-point move is possible, and October US consumer prices then beat forecasts. Traders give a quarter-point December hike about 90% and a half-point about 10%. Either would lift the Fed's floor to the 4.00% the Bank of England (BoE) only reached with its November 5 hike.
BoE Deputy Governor Lombardelli said another near-term hike looks likely unless inflation pressures clearly ease, citing a UK job market where firms neither hire nor fire much. Bets on more BoE hikes had already helped the Pound rise on Monday, so her remarks added little against a Dollar that rose on the US figures.
On the calendar
UK third-quarter Gross Domestic Product (GDP) is due at 07:00 GMT on Thursday, forecast up 0.7% after 0.5%, with September alone forecast flat after a 0.1% rise. A stronger quarter would add to the case BoE Deputy Governor Lombardelli made for another hike.
New York Fed President Williams has a 23:30 GMT slot on Thursday. Friday's October US producer price figure, out at 13:30 GMT, has a 0.4% forecast against September's 1.3%. Both bear on the size of the Fed's December 9 move, not whether it comes.
On the charts
The drop has taken back more than two fifths of the climb from the October 14 low just below 1.3150 to the November 4 high near 1.3500. That high was the Pound's highest since mid-September, and it stalled at the same level on November 5.
GBP/USD daily chart
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- NASDAQ, SPX and DJIA each give back about a sixth of Monday's rebound.
- Fed Governor Waller floats a half-point December hike, and the 10-year tops 5%.
- October producer prices are due Friday after a 1.3% jump in September.
About a sixth of Monday's rebound is gone from all three US stock indexes after a hot October Consumer Price Index (CPI) and talk of a half-point Fed hike. The Nasdaq 100 gave back about half of Monday's gain, hitting a session low just above 27,400, and is now back near 27,750. The S&P 500 is near 7,525 and the Dow Jones Industrial Average near 52,250.
Consumer prices rose 0.4% in October, above the 0.3% forecast, the kind of overshoot Fed Governor Waller had said could call for a half-point December hike. The release had no annual rate, since the 2025 government shutdown left no October 2025 figure, and that rate returns on December 10, a day after the Fed decides. The 10-year Treasury yield is back above 5%, and a higher yield means stock buyers pay less for future profits.
Nvidia (NVDA), the world's most valuable company, lagged Monday's rally and is falling, which is dragging down all three indexes. The drop follows Chief Executive Jensen Huang's admission of an affair with a woman accused of spying for China. Chip stocks make up a larger share of the NASDAQ 100 than of the other two, and that index is falling the most of the three.
On the calendar
Fed Vice Chair for Supervision Bowman and Philadelphia Fed President Paulson speak at 23:30 GMT on Tuesday, and Cleveland Fed President Hammack at 14:00 GMT on Thursday. All three vote on the December 8-9 decision, where traders see a hike as close to certain, so what they say bears on its size.
Weekly jobless claims are due at 13:30 GMT on Thursday, forecast at 195K after 189K. October producer prices follow at 13:30 GMT on Friday, forecast up 0.4% after a 1.3% jump in September, the next inflation figure to bear on a half-point hike.
On the charts
The NASDAQ 100 has climbed back about a quarter of its fall from the October 6 high near 31,350. The S&P 500 is about two-fifths of the way back from its November 6 low near 7,325 to its October high just below 7,850. The Dow Jones Industrial Average is near the middle of the 50,500-53,800 range it has held since mid-September.
Nasdaq 100 index, daily chart
Nasdaq FAQs
The Nasdaq is a stock exchange based in the US that started out life as an electronic stock quotation machine. At first, the Nasdaq only provided quotations for over-the-counter (OTC) stocks but later it became an exchange too. By 1991, the Nasdaq had grown to account for 46% of the entire US securities’ market. In 1998, it became the first stock exchange in the US to provide online trading. The Nasdaq also produces several indices, the most comprehensive of which is the Nasdaq Composite representing all 2,500-plus stocks on the Nasdaq, and the Nasdaq 100.
The Nasdaq 100 is a large-cap index made up of 100 non-financial companies from the Nasdaq stock exchange. Although it only includes a fraction of the thousands of stocks in the Nasdaq, it accounts for over 90% of the movement. The influence of each company on the index is market-cap weighted. The Nasdaq 100 includes companies with a significant focus on technology although it also encompasses companies from other industries and from outside the US. The average annual return of the Nasdaq 100 has been 17.23% since 1986.
There are a number of ways to trade the Nasdaq 100. Most retail brokers and spread betting platforms offer bets using Contracts for Difference (CFD). For longer-term investors, Exchange-Traded Funds (ETFs) trade like shares that mimic the movement of the index without the investor needing to buy all 100 constituent companies. An example ETF is the Invesco QQQ Trust (QQQ). Nasdaq 100 futures contracts allow traders to speculate on the future direction of the index. Options provide the right, but not the obligation, to buy or sell the Nasdaq 100 at a specific price (strike price) in the future.
Many different factors drive the Nasdaq 100 but mainly it is the aggregate performance of the component companies revealed in their quarterly and annual company earnings reports. US and global macroeconomic data also contributes as it impacts on investor sentiment, which if positive drives gains. The level of interest rates, set by the Federal Reserve (Fed), also influences the Nasdaq 100 as it affects the cost of credit, on which many corporations are heavily reliant. As such the level of inflation can be a major driver too as well as other metrics which impact on the decisions of the Fed.
Federal Reserve (Fed) Governor Michelle Bowman said that “bringing inflation down remains a priority,” and that “CPI data suggests inflation pressures may persist.”
In remarks made at the Council on Foreign Relations, Bowman commented that economic growth has gained momentum, that the labour market has improved and does not add to inflation and that longer-term inflation expectations are “very well anchored.”
Key takeaways:
Persistent inflation, firming labor conditions suggest still work to do
Financial conditions have tightened, the Fed must weigh the costs of additional policy tightening.
Bringing inflation down remains a priority.
Core PCE likely rose 3.3% in October on energy prices, AI-related demand
As shocks unwind, forecast core PCE to move closer to 2% next year
Economic growth gained momentum this year
CPI data suggests inflation pressures may persist
Focused on financial stability risks if AI returns fall short
Labor market has improved, not tight, not adding to inflation
AI development increasingly backed by external funding
Longer-term inflation expectations are very well anchored.
Inflation expectations are an important data point, but they are not necessarily controlling how I think about things.
I would need to see AI and Middle East risks abate before I could be confident inflation will come down next year
The Fed is trying to gather data on AI debt counterparties
Open lines of communication with the Treasury are critically important
I don't think AI will rob the US economy of jobs
AI will make workers more productive, create new jobs, and eliminate less-necessary jobs
The Fed does ongoing cybersecurity examinations of banks, and has seen a great deal of focus on identifying and patching vulnerabilities
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 Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.51% | 0.73% | 0.52% | 0.48% | 0.87% | 0.51% | 0.72% | |
| EUR | -0.51% | 0.21% | 0.02% | -0.03% | 0.35% | 0.01% | 0.21% | |
| GBP | -0.73% | -0.21% | -0.23% | -0.25% | 0.14% | -0.21% | 0.00% | |
| JPY | -0.52% | -0.02% | 0.23% | -0.03% | 0.35% | 0.00% | 0.20% | |
| CAD | -0.48% | 0.03% | 0.25% | 0.03% | 0.39% | 0.03% | 0.24% | |
| AUD | -0.87% | -0.35% | -0.14% | -0.35% | -0.39% | -0.35% | -0.14% | |
| NZD | -0.51% | -0.01% | 0.21% | -0.00% | -0.03% | 0.35% | 0.20% | |
| CHF | -0.72% | -0.21% | -0.00% | -0.20% | -0.24% | 0.14% | -0.20% |
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).
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.
The European Central Bank (ECB) Chief Economist Philip Lane said that “it would be a surprise if there are no second-round effects,” and that if energy prices edge lower, “headline inflation could fall while underlying inflation rises,” he said at the Bank of England and its Watchers Conference.
Lane added that the ECB puts a “very high premium on consensus” in the Governing Council, adding that he would put a “high bar on directional forward guidance now.”
Key takeaways:
We put a very high premium on consensus, would be difficult with dots
I would put a high bar on directional forward guidance now
Important that ECB has an instrument for multiple equilibriums on bond market
It's informative that underlying inflation hasn't moved yet, it means it's the usual delayed response
Underlying inflation is a guide to 1-year ahead inflation
Energy prices are already reversing; if that continues, headline inflation could fall while underlying inflation rises
It would be a surprise if there are no second-round effects
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.53% | 0.75% | 0.56% | 0.50% | 0.89% | 0.53% | 0.74% | |
| EUR | -0.53% | 0.21% | 0.02% | -0.02% | 0.36% | 0.02% | 0.21% | |
| GBP | -0.75% | -0.21% | -0.19% | -0.21% | 0.14% | -0.22% | -0.00% | |
| JPY | -0.56% | -0.02% | 0.19% | -0.04% | 0.34% | -0.02% | 0.19% | |
| CAD | -0.50% | 0.02% | 0.21% | 0.04% | 0.38% | 0.02% | 0.23% | |
| AUD | -0.89% | -0.36% | -0.14% | -0.34% | -0.38% | -0.36% | -0.15% | |
| NZD | -0.53% | -0.02% | 0.22% | 0.02% | -0.02% | 0.36% | 0.20% | |
| CHF | -0.74% | -0.21% | 0.00% | -0.19% | -0.23% | 0.15% | -0.20% |
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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
ECB FAQs
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
Kansas City Federal Reserve (Fed) President Jeffrey Schmid said that “inflation is top of mind,” adding that current monetary policy is “fairly accommodative,” in hawkish comments delivered at a Conference in Houston, TX, hosted on Tuesday by the Dallas Fed and the Kansas City Fed.
Schmid added that there are “some concerning trends in prices, underneath the whole energy story.” He emphasized that the labor market is solid, as “hiring is pretty robust lately.”
Key highlights:
Some concerning trends in prices, underneath the whole energy story
US hiring pretty robust lately.
Fed benchmark rate fairly accommodative today
Could argue housing is going through an 'interesting dynamic’ but elsewhere can't find any restriction
Demand is strong, and rates not a cause for hesitation
Inflation is top of mind
instant payments will leap over digital asset structures
A lot of interesting data points between now and Fed's December meeting
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 Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.53% | 0.73% | 0.57% | 0.48% | 0.89% | 0.54% | 0.73% | |
| EUR | -0.53% | 0.20% | 0.05% | -0.04% | 0.36% | 0.02% | 0.21% | |
| GBP | -0.73% | -0.20% | -0.17% | -0.23% | 0.16% | -0.19% | 0.00% | |
| JPY | -0.57% | -0.05% | 0.17% | -0.08% | 0.32% | -0.03% | 0.16% | |
| CAD | -0.48% | 0.04% | 0.23% | 0.08% | 0.40% | 0.05% | 0.24% | |
| AUD | -0.89% | -0.36% | -0.16% | -0.32% | -0.40% | -0.35% | -0.16% | |
| NZD | -0.54% | -0.02% | 0.19% | 0.03% | -0.05% | 0.35% | 0.18% | |
| CHF | -0.73% | -0.21% | -0.00% | -0.16% | -0.24% | 0.16% | -0.18% |
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).
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.
- USD/CHF reclaims 50-day SMA at 0.8227, extending its recovery.
- RSI crosses above neutral, reinforcing bullish momentum near 0.8250.
- Daily close above 0.8250 exposes 0.8300, followed by 0.8382.
The USD/CHF climbed on Tuesday during the North American session, up 0.74%, as hawkish comments by Federal Reserve (Fed) officials and a high US inflation report bolstered the US Dollar amid growing expectations of a Fed rate hike in December.
USD/CHF Price Forecast: Technical outlook
After falling to a nearly two-month low of 0.8127, the USD/CHF has recovered some ground. As of writing, the pair has cleared the 50-day Simple Moving Average (SMA) at 0.8227 and reached a high of 0.8270, but has retreated towards 0.8250, a nearly seven-day high.
The Relative Strength Index (RSI) cleared its 50-neutral level, as buyers gain momentum. This, along with a daily close above 0.8250, could cement the case for a recovery towards the 0.8300 level. Above this level, the next area of interest would be the year-to-date high of 0.8382, reached on October 1.
On the downside, the first support for USD/CHF is the 50-day SMA. Once cleared, the next stop is the low of the day at 0.8174, followed by the 100-day SMA at 0.8164. Below is the 0.8100 figure, ahead of the 200-day SMA lying at 0.8009.
USD/CHF Price Chart – Daily
Swiss Franc Price Today
The table below shows the percentage change of Swiss Franc (CHF) against listed major currencies today. Swiss Franc was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.53% | 0.73% | 0.57% | 0.48% | 0.90% | 0.54% | 0.72% | |
| EUR | -0.53% | 0.19% | 0.04% | -0.04% | 0.37% | 0.02% | 0.22% | |
| GBP | -0.73% | -0.19% | -0.17% | -0.23% | 0.17% | -0.19% | 0.00% | |
| JPY | -0.57% | -0.04% | 0.17% | -0.08% | 0.32% | -0.02% | 0.16% | |
| CAD | -0.48% | 0.04% | 0.23% | 0.08% | 0.40% | 0.05% | 0.24% | |
| AUD | -0.90% | -0.37% | -0.17% | -0.32% | -0.40% | -0.36% | -0.16% | |
| NZD | -0.54% | -0.02% | 0.19% | 0.02% | -0.05% | 0.36% | 0.18% | |
| CHF | -0.72% | -0.22% | -0.01% | -0.16% | -0.24% | 0.16% | -0.18% |
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 Swiss Franc from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CHF (base)/USD (quote).
The US Dollar (USD) has regained strong upside traction, retracing a big chunk of Monday’s pullback as investors have started to reprice another Federal Reserve rate hike in December, particularly following October inflation data.
The US Dollar Index (DXY) has regained the 102.00 barrier and beyond, refocusing on recent highs around 102.50. The usual MBA Mortgage Applications are due, along with a speech by Fed’s Bowman.
EUR/USD has resumed its decline, slipping back toward the 1.1170 region following marked gains in the US Dollar. The final Inflation Rate in Germany is due next, followed by speeches by the ECB’s Cipollone and Lagarde.
GBP/USD has set aside Monday’s rebound, trading with sharp losses and revisiting the 1.3350 zone. Next on tap across the Channel will be the RICS House Price Balance comes on Thursday, along with the preliminary Q3 GDP Growth Rate, flash quarterly Business Investment figures, Balance of Trade results, Construction Orders/Output, Industrial/Manufacturing Production and the NIESR Monthly GDP Tracker.
USD/JPY has advanced sharply past the 158.00 hurdle, testing the area of two-week tops. The Reuters Tankan Index comes next alongside Machine Tool Orders.
AUD/USD has plummeted to eight-month lows around 0.6850, fully fading Monday’s bullish attempt. The quarterly Home Loans data and Investment Lending for Homes are due next in Oz.
Front-month WTI futures (December contract) have further extended their pullback, this time briefly piercing the $84.00 mark per barrel for the first time since late August in response to cooling tensions in the Middle East.
Gold has dropped to two-day lows, threatening its key $4,000 level per troy ounce following the strong bid bias in the US Dollar, rising US Treasury yields across the curve and rising speculation of extra tightening by the Fed.
- Gold tumbles after retracing from a $4,146 daily high.
- US Core CPI rises 0.3% MoM, fueling expectations of further Fed tightening.
- US 10-year Treasury yields surge 12 basis points to 5.012%.
Gold (XAU/USD) tumbles during the North American session on Tuesday as Federal Reserve (Fed) officials were hawkish, expecting further tightening following the release of a red-hot inflation report in the United States (US). At the time of writing, XAU/USD trades at $4,021 after peaking near $4,146, down nearly 3%.
Bullion plunges nearly 3% on Fed hawkish rhetoric after stubborn US inflation data
US Consumer Price Index (CPI) in October rose by 0.4% MoM, down from 0.6% but exceeding forecasts of 0.3%. Core CPI, which excludes volatile items and is usually a clearer reading of inflation, expanded by 0.3% MoM, above forecasts of 0.2% and unchanged from September’s print, signaling that the disinflation process is stalling.
Earlier, Fed Governor Christopher Waller said that if core CPI showed an improvement in inflation, he would support a 25-basis-point hike. Nevertheless, if the reading came at 0.3%, he would go for a 50-basis-point increase, as he added: “Hiking only 25 basis points would put our credibility at risk, a risk I am not eager to take.”
Dallas Fed President Lorie Logan echoed some of Waller’s comments. She said that “more rapid rate hikes possibly needed this winter,” adding that the Fed is 50 basis points below a “modestly restrictive level.”
Money markets have fully priced in a 25-basis-point rate hike in December, while the odds of a 50-basis-point rate hike are at 10%, according to the CME FedWatch Tool.
Given the backdrop, Bullion prices collapsed as the US Dollar Index (DXY), which tracks the American currency’s value against six currencies, rose nearly 0.70% to 102.36. US Treasury yields, namely the 10-year T-note yield, soared 12 basis points to 5.012%, as investors grow confident that the Fed’s December rate hike is cooked.
Of note, Oil prices remain almost unchanged amid growing speculation that Washington and Tehran may agree to a ceasefire dealthat could end the conflict, which started by the end of February.
Ahead, the US economic docket will gain traction on Thursday, following the country's Veterans Day holiday, with traders eyeing jobless claims, housing data, and speeches by Fed officials.
XAU/USD technical outlook: Gold price sinks towards $4,000, further downside expected
Given the fundamental backdrop, Gold collapses to a four-day low of $4,015 with sellers eyeing a decisive break below the $4,000 psychological level. Momentum shifted bearishly, as indicated by the Relative Strength Index (RSI), suggesting further downside lies ahead.
For a bearish continuation, Gold must drop below $4,000. In that outcome, a potential move towards the November 4 daily low at $3,919 is likely, followed by the October 30 year-to-date low at $3,870.
On the other hand, if Gold buyers reclaim $4,050, the next area of interest is $4,100. A breach of the latter opens the door for a recovery, with the next key resistance area being the confluence of the 50- and 100-day Simple Moving Averages (SMAs), at $4,185 and $4,200, respectively.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
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