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DBS Group Research expects Taiwan’s central bank to keep its policy rate unchanged on September 17, before raising it to 2.125% in December. Analysts Taimur Baig and Chang Wei Liang highlight subdued August CPI, but anticipate a somewhat hawkish tone as the CBC remains vigilant on supply‑side inflation risks, higher wages and recovering domestic consumption.

CBC to stay vigilant on inflation risks

"We expect the central bank to keep its policy rate unchanged at the September 17 policy meeting, before hiking rates to 2.125% at the next meeting in December."

"That said, we expect the CBC to retain a somewhat hawkish tone."

"The central bank is likely to remain vigilant about the risk of persistent supply-side inflation, particularly given the renewed rise in global oil prices amid prolonged tensions in the Middle East."

"Policymakers are also likely to highlight the risk of second-round inflationary pressures stemming from a potential rise in inflation expectations, higher wages, and a recovery in domestic consumption."

"August CPI data suggest little urgency for the CBC to hike rates: headline CPI came in slightly below expectations at 2.0% YoY, while core CPI eased marginally to 2.3%."

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

• WTI Crude Oil buckles early and grinds back, down about 3.4% on Hormuz talks.
• Gasoline supplied more than a third of the August CPI monthly increase.
• Global inventories are down 507 million barrels since the war began in February.

West Texas Intermediate (WTI) trades near $97.00, about 3.4% lower and on track for its first down session in five. The Financial Times reported on Friday that Gulf foreign ministers will meet their Iranian counterpart in the Omani city of Salalah, in a push to win backing for a temporary arrangement covering shipping through the Strait of Hormuz. The meeting is on Monday. The price moved on Friday.

Nothing moved through the strait, and the price moved anyway

Preliminary vessel tracking counted seven ships through the Strait of Hormuz on September 10, against eleven the day before. Before the war began on February 28, the waterway handled roughly 125 cargo vessels a day and about one-fifth of the world's seaborne Crude Oil and liquefied natural gas (LNG). The waterway is not congested.

Gulf producers have kept barrels moving by shuttling cargoes out to waiting tankers rather than sailing loaded ships through the strait, so exports have held up better than transit counts suggest. The cost of that workaround sits on top of every cargo, and tanker earnings are at records because of it. Friday's discount was applied to the freight, not to a barrel that has started moving again. Saudi Arabia's August output fell by around 1.9 million barrels a day, and Houthi strikes hit Saudi energy sites this week. American inventories drew a further 300K barrels in the week to September 4.

The barrel now sets the inflation rate it gets punished for

The August Consumer Price Index (CPI) rose 0.4% on the month and held at 3.4% YoY, both in line with consensus. Gasoline rose 3.9% and supplied more than a third of the monthly increase on its own. Fuel costs ran 28% higher YoY and diesel 52%, which reads as a report on the Gulf rather than on the American consumer. Diesel is the number that travels, because it prices trucking and delivery into every shelf in the country, which is how an energy shock stops being an energy shock. It was the last inflation print before the rate decision.

Core CPI rose 0.3% against a 0.2% consensus and eased to 2.4% YoY, so the part of the index that excludes energy also firmed in the month energy did the damage. Rate futures now price a quarter-point increase on September 16 at roughly 70%, which would be the first move of the year out of a target range unchanged since January at 3.50% to 3.75%. A quarter point on the funds rate does not reopen a strait.

The demand downgrade was the smaller number in its own report

The International Energy Agency (IEA) published its monthly report on Friday and cut 2026 demand by a further 940K barrels a day, taking the full-year decline to 2.5 million. The same document has supply falling 5.7 million barrels a day this year to 100.7 million, with more than 10 million barrels a day of Gulf output still shut in through August. Production is put at 100.1 million barrels a day in August, down 1.6 million on the month. Output is forecast to rebound 8 million barrels a day next year, a recovery that runs through the same strait.

Inventories have covered the difference. Observed global stocks have fallen 507 million barrels since the war began, an average draw of 2.8 million barrels a day, and August alone took out 95 million. The agency puts the Gulf recovery in 2027. The balance has been paid for out of tanks, and tanks only empty once.

One meeting has a published time and the other has a draft

The Federal Open Market Committee (FOMC) convenes on September 15 and 16, with the statement, the press conference and an updated Summary of Economic Projections (SEP) landing on the second day. Gulf ministers meet in Salalah the day before that. Rate futures put the quarter point near 70%, an events exchange nearer 57% and a prediction market nearer 49%. One European bank raised its year-end Brent forecast by $10.00 this week. Brent trades above $100.00.

The June memorandum between Washington and Tehran produced a corridor hugging the Omani coast. Iran called that southern route a breach of the memorandum and attacked ships using it, and the interim deal collapsed. It is possible Monday produces a corridor that ships actually use. Two have been announced since June.

Levels to watch

Resistance: The session high just above $100.50 is the first mark, with the $101.00 handle above it. Beyond that sits the May 18 to May 20 shelf just above $103.00, and the late-April peak short of $107.50 behind that.

Support: The session low just beneath $95.50 held the whole pullback. Thursday's low just beneath $93.00 is the next mark, and the $90.00 handle below it carries the September advance.

Bias: Higher while the $95.50 area holds, with $100.50 the first objective and $103.00 behind it. Friday's low gave back not quite half of the four-day advance, and the session has since recovered a third of that drop. The daily Stochastic Relative Strength Index (Stoch RSI) near 80 has dipped and turned back up rather than rolling over. Invalidation is a daily close beneath $93.00, which erases Thursday. A Salalah arrangement that insurers will price does it faster than any chart level, and so does a rate path that reaches demand.

WTI spot daily chart

United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann reports that USD/CNH has bounced sharply to 6.7153, with intraday gains likely capped near 6.7200. The bank’s earlier negative stance has softened as downward momentum fades, and over the next one to three weeks, it now expects the pair to edge higher within a 6.7040–6.7290 range.

From downside bias to gentle rebound

"24-HOUR VIEW: We indicated yesterday that USD “could trade between 6.7030 and 6.7100.” USD then dipped to 6.7043 before rising sharply to 6.7153. While the sharp rise has scope to extend, any advance is expected to face strong resistance at 6.7200. Support is at 6.7085."

"1-3 WEEKS VIEW: We have been holding a negative USD stance since the start of the month. In our most recent narrative from Monday (07 Sep, spot at 6.7070), we noted that “downward momentum has increased further, and if USD breaks and holds below 6.7000, it could decline further to 6.6900.” Yesterday, USD rose sharply to 6.7153. Although our ‘strong resistance’ level at 6.7160 has not been breached yet, downward momentum has largely faded. The increasing upward momentum suggests USD could edge higher, but currently, any advance should stay within a 6.7040/6.7290 range."

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

• XAG/USD holds below neckline despite bouncing from two-day lows.
• Bearish RSI signals sellers retain short-term technical control.
• Break below $62.55 exposes $61.01 and $60.00 next.

Silver price registers gains of over 1%, yet it is trading below the ‘head and shoulders’ neckline, an indication that the overall trend in the short-term may be tilted to the downside. The XAG/USD trades at $64.24, after bouncing off daily lows of $62.94.

XAG/USD Price Forecast: Technical Outlook

The white metal is poised to trade sideways if it struggles to clear the neckline at around $64.10-$64.15, with bearish momentum continuing to build. Although Silver is positive in the day, momentum is tilted to the downside, as indicated by the Relative Strength Index (RSI) below the 50 neutral level, despite aiming higher.

If XAG/USD rises past $65.00, it could open the door for a recovery to the 100-day Simple Moving Average (SMA) of $66.94. On further strength, the $67.00 could be cleared, and bulls could test the $70.00 figure up next. Above waits the 200-day SMA at $73.05.

On the flip side, Silver’s first support is the $64.00 mark. If bearish momentum builds, sellers can test the 50-day SMA at $62.55 before targeting the July 22 high-turned-support at $61.01. A breach of the latter will expose $60.00.

XAG/USD Price Chart – Daily

The US Dollar Index (DXY) closes the week near the 99.00 zone, little changed on the day and holding the ground it clawed back after a brief wobble on Thursday's US inflation release. The Greenback enters a defining week in a familiar spot, firmer in tone, but still unable to turn a hawkish rates story into a decisive breakout.

Wednesday's Federal Reserve (Fed) decision anchors everything, and markets now lean toward a quarter-point hike that would lift the target range to 4.00% from 3.75%, following an August Consumer Price Index (CPI) report in which core prices ran hotter than forecast. With the move largely priced in, attention shifts to updated economic projections and Chair Kevin Warsh's press conference for signals on whether this is a one-off insurance hike or the start of something longer.

Canada opens proceedings with August inflation on Monday, alongside a batch of Chinese activity data. Tuesday brings the United Kingdom (UK) labor market report and Germany's ZEW sentiment survey. Wednesday is the pivot: UK CPI and a rebound-tipped US Retail Sales print land before the Fed decision, projections and press conference. The Bank of England (BoE) follows on Thursday, and the Bank of Japan (BoJ) closes the week on Friday.

The European Central Bank (ECB) is well-represented on the speaking circuit, with President Christine Lagarde due several times and colleagues Schnabel, Cipollone, Elderson and Lane also scheduled, though the Eurozone's own data is limited to final inflation confirmations, industrial production and the ZEW survey. Japan adds trade figures and national CPI, New Zealand reports second-quarter Gross Domestic Product (GDP), and the Reserve Bank of Australia's (RBA) Governor, Michele Bullock, speaks on Thursday. Overhanging it all is the unresolved situation around Iran and the Strait of Hormuz, which continues to set the tone for energy prices.

EUR/USD closes around 1.1590, softer on the day. The domestic calendar is thin, with final August inflation readings, industrial production, and the ZEW survey, so the pair stays largely a Dollar story into Wednesday's Fed decision. A hawkish hike would pressure it, but the Greenback's repeated failure to hold gains has kept a floor under the Euro.

GBP/USD trades near 1.3525, roughly flat on the day, and finally has a home calendar worth watching. Tuesday's jobs report, with the unemployment rate seen ticking up to 5.0%, precedes Wednesday's CPI, where core inflation is expected to firm to 2.7%. The Bank of England (BoE) decision on Thursday is expected to hold rates at 3.75%, though the market is looking for a sizeable minority around three members to vote for a hike. Sterling has its own catalysts, but the Fed still sets the bigger tone.

USD/JPY sits around 153.70, pressed lower as a soft Dollar met a firmer Yen. Friday's BoJ meeting is the domestic highlight, with markets leaning toward a hike to 1.25% that would take Japanese rates to their highest in decades. Thursday's national CPI feeds the debate. With the Fed and BoJ potentially tightening in the same week, the risk is skewed toward further Yen strength.

AUD/USD trades near 0.7170 and is the standout among the majors, holding firm into the weekend. The home calendar is light, with Bullock the main event on Thursday, so the Aussie leans on risk appetite, Monday's Chinese activity data and the Fed's guidance. A hawkish surprise is the clearest threat to its recent run.

West Texas Intermediate (WTI) Oil hovers near $100 after shedding more than 3% on the day, with no Oil-specific releases due. The story stays geopolitical: the standoff around Iran and the Strait of Hormuz keeps a floor under prices, and the International Energy Agency's warning of a widening supply deficit adds to the backdrop even as this week's pullback shows how quickly sentiment can turn.

Gold trades near $4,350, close to record highs after another firm session. With no catalyst of its own, the metal is keyed to the Fed: a hawkish hike and firm guidance from Warsh could finally spark a pullback, while any softness in the message would likely extend the run.

ING analysts Chris Turner and Padhraic Garvey argue the Bank of Japan is likely to hike 25bp to 1.25% and then proceed cautiously. They see government resistance to aggressive tightening and project two additional 25bp hikes in January and April, taking the policy rate to 1.75%, which they view as near‑neutral ahead of a temporary consumption tax cut.

BoJ seen hiking but staying cautious

"Formal communication from the BoJ this year has acknowledged that the real policy rate is negative and needs to be raised. Various BoJ speeches have discussed the concept of a neutral rate, which most see in the 1.1-2.5% range in nominal terms."

"We doubt the BoJ would want to shock investors and Scott Bessent by leaving the policy rate unchanged at 1.00%. A 25bp rate hike to 1.25% looks likely. The marginally bigger risk than unchanged rates is a 50bp rate hike, perhaps as part of a broader understanding with Washington designed to sustainably push USD/JPY lower, reduce the need for large-scale dollar selling intervention from the BoJ and help stabilise JGBs."

"However, the Japanese government has an aggressive pro-growth strategy and will no doubt express its views against a more aggressive tightening cycle. Maybe we are underestimating a shift here, but it is hard to see government officials backing a much faster tightening cycle of either a 50bp hike in September or back-to-back hikes in September and October. Instead, our house view is for two further 25bp rate hikes next January and April, which would take the policy rate to 1.75%."

"A near-neutral 1.75% policy rate next April seems an appropriate target before the consumption tax on food and non-alcoholic beverages is cut from 8% to 1% that month for two years. That will sharply depress headline inflation – perhaps for the next two years – and would create a difficult environment in which to deliver further tightening."

"When it comes to prices, the BoJ narrative has firmly shifted towards inflation moving onto a sustainable path. One central theme now is that higher input/producer prices are more likely to feed through into broader CPI. The most recent Tankan business survey showed output price expectations rising sharply and the BoJ is focusing heavily on the 7% year-on-year growth in corporate goods prices."

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

• US 10-year yield slips but remains sharply higher for the week.
• 30-year yield eases after touching its highest level since 2007.
• Fed hike odds hit 91% as inflation expectations climb.

US Treasury yields fall during the North American session on Friday following the release of US inflation data, but are poised to finish the week higher. The US 10-year Treasury yield is down one basis point to 4.951% but has gained over 16 basis points, or 3.49%, this week.

US yields cool, but the week’s inflation scare still bites

The US 30-year yield falls two basis points to 5.34% after hitting its highest level since 2007 at 5.38%, due to surging Oil prices fueled by the escalation of the US-Iran conflict, which has spread to Yemen, Houthis versus Saudi Arabia.

Recent US inflation data were mostly aligned with estimates, except for core CPI, which was in line with forecasts but ticked lower. Despite this, the red-hot PPI report a day ago and the surge in US yields this week ignited a Fed-hawkish repricing.

Money markets have priced in a 91% chance of a 0.25% rate increase by the Federal Reserve (Fed) at the next week's meeting.

Other data showed that US consumers are becoming pessimistic about the economy and now expect higher prices due to a resurgence in fuel prices and rising trade tensions, particularly between the US and Canada.

In the meantime, the US Dollar Index (DXY), which tracks the performance of a basket of six currencies against the Greenback, clings to 99.00, up a minimal 0.05%.

US financial markets' five-year inflation expectations are at 2.46%, up from 2.37% at the beginning of the week, according to the 5-year Breakeven Inflation Rate. The 10-year Breakeven rate rose from 2.35% to 2.4%, suggesting markets expect medium-term inflation to rise.

Traders' focus on the Fed’s meeting, Warsh presser

Next week, traders will focus on the FOMC monetary policy decision. Alongside this, they will monitor jobs and housing data, the NY Fed Empire State Manufacturing Index, Retail Sales and Fed officials' speeches.

US 10-year Treasury note yield

(This story was corrected on September 11 at 19:39 GMT to say that the 10-year breakeven rate rose from 2.35% to 2.4%, instead of falling.)

MUFG’s Michael Wan notes that Asia FX and rates have stayed relatively stable despite sharply higher US Treasury yields, but he warns this resilience may not last in the near term. He highlights divergences between Asia FX and US yields, low USD/CNH volatility, and stresses that rising US yields driven by tighter policy and higher risk premia are concerning for Asia.

Asia FX resilience faces growing headwinds

"Linking this to our region, Asia FX and rates markets have been quite benign so far despite the rise in US Treasury yields, but given the drivers of markets more recently we think the probabilities are that this resilience may not continue at least in the near-term."

"We can see this resilience thus far in Asia across multiple measures including the divergence between Asia FX with both yield spreads and absolute yields in the US, a general compression in Asia rates with US Treasury yields, coupled with strength and outperformance in certain currencies such as KRW, TWD, and CNY."

"In addition, implied FX volatility in a pair like USD/CNH has hit multi-decade lows, and while this may certainly be for good reasons, is another indication of how the market is probably positioned right now."

"Ultimately, it’s not just whether US yields are rising, but why they are rising which matters for the spillover impact including to Asia, as our previous analysis and framework shows (see Asia – why US yields rise matter for Asia)."

"As such, the fact market moves have been increasingly driven by tighter policy and importantly higher risk premia with some initial signs of risk-off is concerning."

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

• USD/JPY reversed an early post-CPI jump and is trading lower today.
• US core CPI inflation rose 0.3% in August, a touch hot, yet the Greenback could not sustain its gains.
• The Yen is drawing support from bets on a Bank of Japan rate hike next week.

USD/JPY is trading around 153.70 on Friday, down for the day after briefly spiking above 154.50 following the US inflation release. The pair erased that move within hours as Yen strength overwhelmed the Dollar's knee-jerk bounce, leaving it back toward the lower end of its recent range following this week's sharp slide from the mid-155s.

United States (US) Consumer Price Index (CPI) data held at 3.4% year on year in August, matching both July's reading and market expectations, according to the Bureau of Labor Statistics (BLS). On a monthly basis, prices rose 0.4%, a marked pick-up from the 0.1% gain the month before. The core measure, which strips out food and energy, rose 0.3% on the month, above the 0.2% forecast, although the annual core rate eased to 2.4% from 2.5%.

The US Dollar (USD) climbed at first, helped by the firmer monthly core figure, but the move lost momentum quickly against the Japanese Yen (JPY), which has been among the strongest currencies this week. The initial rebound lacked the fuel to hold.

Markets see the central bank raising interest rates next week, with a 25-basis-point (bps) hike to 1.25% on the table, a move that would lift Japanese borrowing costs to their highest level in more than three decades.

That combination of a BoJ edging tighter just as the Dollar's inflation-day support drains away is tilting the balance toward the Yen and keeping USD/JPY under pressure around the low-153s. Strength is visible across the board, with the Yen crosses also easing today.

Short-term technical analysis:

In the daily chart, USD/JPY trades at 153.69, extending a corrective bearish phase with price lodged well below the 20-day Simple Moving Average (SMA) at 157.65 and the 100-day SMA at 159.68, which now frame a broad cap on any recovery attempts. The Relative Strength Index (RSI) at 29.35 sits just inside oversold territory, hinting that downside momentum is stretched but not yet reversed, so bounces are likely to be treated as corrective while the pair remains under these key moving-average barriers.

On the topside, initial resistance is aligned at 154.40, ahead of a more notable hurdle at 155.99; a daily close above these levels would be needed to ease immediate selling pressure before the focus could shift toward the 20-day SMA at 157.65 and the 100-day SMA at 159.68. On the downside, nearby support is seen at 153.55, followed by a lower floor at 153.26, where failure to hold would open the way to an extension of the downtrend despite the already oversold RSI backdrop.

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

• The US Dollar pulls back after briefly rising in reaction to the latest CPI figures.
• US CPI rises 0.4% MoM in August, while core inflation increases 0.3%.
• Traders now await whether the Fed delivers the rate hike priced into markets.

The US Dollar Index (DXY) reverses earlier gains on Friday as a pullback in longer-dated US Treasury yields outweighs support from the latest US Consumer Price Index (CPI) report, which strengthened expectations that the Federal Reserve (Fed) will raise interest rates next week. At the time of writing, the index trades around 99.11 after briefly climbing to 99.36 in the immediate reaction to the data.

The headline Consumer Price Index (CPI) rose 0.4% MoM in August, matching market expectations but accelerating sharply from the 0.1% increase recorded in July. Annual inflation held steady at 3.4%, also in line with forecasts.

Core CPI, which excludes volatile food and energy prices, increased 0.3% MoM, above the 0.2% forecast and the previous reading of 0.2%. Annual core inflation eased to 2.4% from 2.5%, matching expectations. The report also showed that gasoline prices rose 3.9% and accounted for more than one-third of the monthly increase in headline inflation.

Following the release, traders raised their bets on a rate hike at the Fed’s September 15-16 meeting, with the CME FedWatch Tool showing an 88% chance of a 25-basis-point increase, up from 67% earlier in the day.

However, the US Dollar struggles to capitalise on the hawkish repricing as a sharp decline in Oil prices pulls longer-dated Treasury yields back from multi-year highs. The benchmark 10-year US Treasury yield trades near 4.94% after briefly reaching 4.99%, its highest level in around three years. Meanwhile, West Texas Intermediate (WTI) Oil trades near $96.50 after briefly climbing above $100, down about 4% on the day.

However, the policy-sensitive two-year yield holds higher near 4.63%, around levels last seen in July 2024, reflecting increased expectations of an imminent rate hike. The elevated front-end yield helps limit selling pressure on the Greenback.

The Fed meeting next week is now the main focus. Fed officials have repeatedly stressed that inflation has stayed too high for too long and reaffirmed their commitment to bringing it back to the 2% target. Elevated Oil prices complicate that task, leaving markets to assess whether policymakers see the energy shock as persistent enough to deliver the rate hike traders expect or opt for another hold.