Forex News
- EUR/USD edges lower to near 1.1220 in Tuesday’s early Asian session.
- Concerns about France's ability to tame its budget deficit weigh on the Euro.
- Traders reduce their bets on a Fed rate hike this month following soft US jobs data.
The EUR/USD pair declined to around 1.1220 during the early Asian trading hours on Tuesday. The Euro (EUR) weakens near a 17-month low against the US Dollar (USD amid growing concern over France’s debt position.
French Prime Minister Sébastien Lecornu's minority government announced plans last month for a €54bn savings drive to stave off a catastrophic downgrade or sovereign default. Lecornu said the savings would result in limiting a budget deficit of 5.5% of GDP this year to 5% next year. He warned that without action the shortfall between public spending and revenue could reach 6.5%.
Concerns over France’s rising debt costs as the government battles to control its stretched public finances in the run-up to next year’s presidential election. This, in turn, exerts some selling pressure on the shared currency.
Furthermore, the political turmoil in Spain might contribute to the EUR’s downside. Spanish Prime Minister Pedro Sanchez called a snap election for November 29 in an effort to increase his parliamentary support after lawmakers last week rejected proposals to address a housing crisis that has drawn nationwide protests.
“Europe is taking the spotlight at the start of the week, as fiscal and political concerns hit the bloc,” said Kathleen Brooks, the research director at XTB. “France is the epicentre of the concerns; however, Spain is also set to get ready for an early election, which is adding to investor worries,” Kathleen added.
Reduced expectations of a Federal Reserve (Fed) rate hike this month could weigh on the Greenback and act as a tailwind for the major pair. The US Nonfarm Payrolls (NFP) rose by 29K in September, compared to the 133K increase seen in August, the US Bureau of Labor Statistics (BLS) revealed on Friday. This figure came in below the market consensus of 90K. The Unemployment Rate climbed to 4.2% in September from 4.1% in August.
Markets are now pricing in nearly 22.7% odds that the US central bank will lift benchmark borrowing costs at its October policy meeting, according to the CME FedWatch tool.
Euro pressured as ECB backstop complicated by France fiscal strains
Strategists at Brown Brothers Harriman note that the ECB’s Transmission Protection Instrument, designed to provide “a backstop against disorderly spread widening,” is not an automatic shield for Eurozone debt markets. They stress that activation is contingent on EU member states pursuing “sound and sustainable fiscal and macroeconomic policies,” a condition that France’s deteriorating finances increasingly struggle to meet. BBH argues that this complicates the case for intervention, even as the risk of broader contagion across Eurozone bond markets would “increase pressure on the ECB to act.”
At the same time, BBH highlights comments from ECB Chief Economist Philip Lane, who recently underscored that the “increase in long-term interest rates constitutes a material tightening of financial conditions for the euro area.” In their view, that combination leaves the Euro facing sustained downside pressure, as investors weigh rising fiscal risk against the prospect of a “potentially shallower ECB hiking cycle.”
Nagel flags upside inflation risks but sees limited pass-through so far
ECB’s Nagel delivers a stronger-than-usual hawkish signal, with a 7.2/10 FXS Speechtracker score versus a 6.6/10 historic average, as upward risks are said to dominate the inflation outlook. The emphasis on uncertainty “calling for flexibility, not inaction” points to a reluctance to ease policy prematurely, which is mildly supportive for the Euro on the margin.
At the same time, Nagel notes there are “no clear signs” that inflation has fed through to price and wage setting, tempering the hawkish tilt and suggesting patience rather than aggressive tightening. Overall, the speech leans hawkish relative to Nagel’s baseline, but the lack of strong wage-price dynamics keeps the door open for data-dependent adjustments rather than a clear push toward further immediate rate hikes.
Technical Analysis: EUR/USD retains a negative tone amid oversold conditions
In the daily chart, EUR/USD keeps a clear bearish tone as it holds beneath the Bollinger Bands’ 20‑day simple moving average and the 100‑day moving average. Price is pressed toward the lower Bollinger band, while the Relative Strength Index (14) around 19 stays deeply oversold, suggesting persistent selling pressure but also raising the risk of a corrective bounce from nearby support.
On the topside, initial resistance emerges at the Bollinger Bands’ midline around 1.1420, followed by the 100‑day moving average at 1.1505 and then the upper Bollinger band near 1.1670, which together define a broad cap on recovery attempts. On the downside, immediate support is aligned with the lower Bollinger band at 1.1170, and a sustained break below this floor would likely expose the pair to a fresh leg lower in the short term.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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 struggles to gain any meaningful traction and remains confined in a familiar range.
- Hawkish BoE expectations support the GBP, though bullish USD caps the upside for the pair.
- Geopolitical risks and elevated US bond yields act as a tailwind for the safe-haven Greenback.
The GBP/USD pair extends its consolidative move during the Asian session on Tuesday, trading above the 1.3200 mark and within a familiar range held over the past two weeks or so.
Investors have been pricing in tighter monetary policy from the Bank of England (BoE) amid sticky inflation due to elevated energy prices, which is seen underpinning the British Pound (GBP). The US Dollar (USD), on the other hand, pauses for a breather following the recent strong rally to its highest level since April 2025 and turns out to be another factor acting as a tailwind for the GBP/USD pair.
That said, persistent geopolitical uncertainties and elevated US bond yields remain supportive of the bullish undertone surrounding the USD. In the latest developments surrounding the Middle East crisis, Yemen's Houthi group said on Monday that it carried out three military operations using ballistic and cruise missiles and drones against airports, an oil facility, and military sites across Saudi Arabia.
Adding to this, media reports suggest that Israel is preparing a potential attack against Iran, either in coordination with the US or independently. Furthermore, a deepening fiscal shock in France led to an extended rout in the fixed income market, keeping US bond yields close to multi-year highs. This, in turn, continues to act as a tailwind for the safe-haven buck and caps the upside for the GBP/USD pair.
Meanwhile, data released last week pointed to moderation in inflationary pressures in the US, which, along with the weak US Nonfarm Payrolls (NFP) report, tempered expectations for a Federal Reserve (Fed) rate hike in October. Traders, however, are still pricing in over an 80% chance that the US central bank will raise borrowing costs by the end of this year, validating the positive outlook for the USD.
Traders, however, seem hesitant to place fresh directional bets and opt to wait for more cues about the Fed's policy path. Hence, the focus will remain glued to the release of the FOMC Minutes on Wednesday. Apart from this, speeches from influential FOMC members and the incoming geopolitical headlines will play a key role in driving the USD, which should provide some impetus to the GBP/USD pair.
GBP/USD 4-hour chart
Technical Analysis
The recent range-bound price action might be categorized as a bearish consolidation phase against the backdrop of the decline from the August swing high. Moreover, the GBP/USD pair trades beneath the 100-period Simple Moving Average (SMA) dynamic barrier on the 4-hour chart, suggesting that recovery attempts remain vulnerable. The 100-period SMA at 1.3319 marks the key level bulls would need to overcome to ease downside pressure and open the way toward higher levels. On the downside, weakness below 1.3180 would reaffirm the negative bias and expose the GBP/USD pair to further slippage.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
- The Australian Dollar held ground despite consumer sentiment dropping 4.7% in October, its second consecutive monthly decline.
- Crude oil prices fell as G7 nations released 100 million barrels of emergency reserves to ease inflation fears.
- Fresh Houthi missile and drone strikes against Saudi Arabian targets could boost safe-haven demand for the US Dollar.
AUD/USD remains steady after two days of gains, trading around 0.6970 during Asian hours on Tuesday. The currency pair is hovering in a tight range as the Australian Dollar (AUD) finds support despite local economic headwinds. The Westpac–Melbourne Institute Consumer Sentiment Index dropped 4.7% month-over-month in October, marking its second consecutive monthly drop, though it showed a minor improvement over September’s 5.2% decline.
Meanwhile, the US Dollar (USD) is keeping its ground against major rivals amid shifting commodity and inflation dynamics. A retreat in oil prices, driven by signals of expanding supply out of the Middle East, has helped soothe market anxiety over rising inflation and the likelihood of tighter monetary policy.
Global efforts to bolster energy supply have contributed significantly to this price drop. Following pressure from US President Donald Trump, G7 nations agreed on Friday to tap into emergency reserves and release 100 million barrels of crude and diesel while pledging not to restrict energy exports. Tracking data indicates this release will supplement Middle Eastern crude exports, which surged past pre-war levels during most of the final week of September.
Nevertheless, fresh geopolitical flare-ups in the region could reignite safe-haven demand for the US Dollar. According to Xinhua News Agency, Yemen’s Houthi group claimed responsibility on Monday for launching coordinated attacks using drones, ballistic missiles, and cruise missiles against Saudi Arabian military installations, an oil facility, and key airports. Houthi spokesman Yahya Saree stated that one of the strikes successfully hit King Khalid International Airport in Riyadh, disrupting air traffic and injecting new tension into global markets.
HSBC highlights profit-led dynamics behind stubborn US inflation
Strategists at HSBC argue that US inflation, which “remains high” and is often blamed on “surging oil and computing costs, as well as the lingering impact of tariffs,” looks different when viewed through the lens of the gross value-added deflator. This measure, they note, captures inflation generated by “profits, wages, and non-labour related costs” and “offers a different perspective.” On this basis, HSBC finds that “the latest acceleration in headline inflation appears to have been driven mainly by stronger profit growth,” rather than solely by traditional cost pressures.
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
- USD/CAD sticks to a positive bias during the Asian session amid a combination of supporting factors.
- Weak crude oil prices, the BoC’s dovish stance, and US-Canada trade tensions undermine the Loonie.
- Geopolitical risks and elevated US bond yields support the USD, acting as a tailwind for spot prices.
The USD/CAD pair attracts some dip-buyers during the Asian session on Tuesday, stalling the previous day's modest pullback from the vicinity of the 1.4300 mark, or its highest level since April 2025. Spot prices currently trade around the 1.4265 region and seem poised to prolong a nearly one-month-old uptrend amid a combination of supporting factors.
Crude oil prices languish near a one-month low as resilient Middle Eastern crude exports and a G7 emergency stockpile release eased supply concerns. Moreover, the Bank of Canada's (BoC) predominantly dovish policy stance and US-Canada trade tensions contribute to the Canadian Dollar's (CAD) relative underperformance. This, along with the prevailing strong bullish sentiment surrounding the US Dollar (USD), continues to lend support to the USD/CAD pair and validates the near-term positive outlook.
The geopolitical risk premium remains in play amid the ongoing conflicts in the Middle East and underpins the safe-haven Greenback. In the latest developments, Yemen's Houthi group said on Monday that it carried out three military operations using ballistic and cruise missiles and drones against airports, an oil facility, and military sites across Saudi Arabia. Adding to this, media reports suggest that Israel is preparing a potential attack against Iran, either in coordination with the US or independently.
Meanwhile, US data released last week pointed to moderation in inflationary pressures, which, along with an unexpectedly weak US Nonfarm Payrolls (NFP) report, tempered expectations for a Federal Reserve (Fed) rate hike in October. Traders, however, are still pricing in over an 80% chance that the US central bank will raise borrowing costs by the year-end. Moreover, a deepening fiscal shock in France led to an extended rout in the fixed income market, keeping US bond yields elevated near multi-year highs.
The USD, however, trades below its highest level since April 2025, touched on Monday, as traders opt to wait for further cues about the Fed's policy path. Hence, the focus will remain glued to the release of FOMC Minutes on Wednesday. This, along with speeches from influential FOMC members and the incoming geopolitical headlines, will play a key role in driving the USD. Nevertheless, the fundamental backdrop suggests that the path of least resistance for the USD/CAD pair remains to the upside.
USD/CAD daily chart
Technical Analysis
The USD/CAD pair holds well above the 100-day Simple Moving Average (SMA) at 1.4003, extending its bullish near-term bias following last week's breakout through the 1.4245-1.4250 hurdle. However, the elevated reading of the Relative Strength Index (14) around 78 suggests overbought conditions, hinting that while upside pressure remains dominant, spot prices could be vulnerable to bouts of corrective consolidation after the recent advance.
That said, any corrective pullback could find decent support near Friday's swing low, around the 1.4200 round figure. Meanwhile, a convincing break below might prompt some technical selling and drag the USD/CAD pair to the 1.4150-1.4145 region.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
- WTI price tumbles to near $88.60 in Tuesday’s early Asian session.
- G7 countries announced they will release 100 million bbl of crude and diesel from strategic reserves.
- Concerns over Middle East tensions might cap the upside for crude oil prices.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $88.60 during the early Asian trading hours on Tuesday. WTI faces some selling pressure as rising Middle East crude exports and a release of oil stocks by the Group of Seven nations boost supplies.
On Friday, the Group of Seven nations (G7) agreed to release 100 million barrels of diesel and crude from emergency reserves and pledged to refrain from energy export restrictions after pressure from US President Donald Trump. The release will add to Middle Eastern crude exports, which climbed above pre-war levels in four of the seven days of the final week of September, data showed on Monday.
Late Monday, Trump signed an executive order to ease restrictions on the use of a tax-exempt variety of diesel, per Bloomberg. Trump said the measure would “officially waive the off-road requirement and allow anyone to purchase tax-free, red-dyed diesel for any reason.” This move marks his latest bid to pare costs for the fuel ahead of November’s midterm elections.
“The G7 decision to tap strategic reserves is taking some of the immediate supply anxiety out of the price, while there’s a growing view that Saudi export volumes are moving back toward pre-war levels, even if those barrels are still moving at higher cost and via less efficient routes,” said Tim Waterer, chief analyst at KCM Trade.
“That combination is enough to subdue prices for now even though the risks of further damage to energy infrastructure around the Gulf region haven’t gone away,” Waterer added.
Traders brace for the American Petroleum Institute (API) crude oil stockpiles report later on Tuesday. A larger-than-expected crude oil inventory draw indicates stronger demand and could lift the WTI price, while a bigger build than estimated signals weaker demand or excess supply, which might undermine the WTI price.
Yemen’s Houthi group on Monday claimed that it had carried out three military operations targeting two airports, an oil facility, and military sites across Saudi Arabia. Rising tensions in the Middle East might help limit the WTI’s losses.
Oil risk persists as US war in Iran enters new escalation phase
Analysts at Rabobank warn that the “U.S. War in Iran is about to reach a new stage of escalation,” a development they believe will keep oil prices elevated even as continued crude flows through the Strait of Hormuz risk lulling markets into “a new sense of complacency.” The bank’s Energy Markets team cautions that “the current shuttle system is still fragile,” with “key targets like terminals and refineries providing Iran with ripe opportunities to re-exert their grasp over the Strait of Hormuz’s energy flows,” underscoring that the apparent resilience of regional supply routes may prove deceptive.
Technical Analysis: WTI holds a neutral-to-bearish near-term bias
In the daily chart, WTI US Oil is consolidating after its recent pullback, holding above the Bollinger Bands lower band support and the 100-day moving average (MA), but still capped beneath the Bollinger middle band resistance. This configuration, together with a 14-day Relative Strength Index (RSI) near 46 and pointing lower, suggests fading bullish momentum and a neutral-to-bearish near-term bias while price remains under the mid-band.
On the topside, immediate resistance is located at the Bollinger Bands middle band near $93.35, ahead of the upper band barrier around $101.10. On the downside, initial support emerges at the recent price pivot in the $88.35 area, followed by the Bollinger lower band around $85.58, with the 100-day MA near $84.35 reinforcing a broader demand zone; a clear break below these latter levels would open the door to a deeper correction.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
US President Donald Trump signed an executive order to ease restrictions on the use of a tax-exempt variety of diesel, Bloomberg reported on Monday.
Trump said the measure would “officially waive the off-road requirement and allow anyone to purchase tax-free, red-dyed diesel for any reason.” This move marks his latest bid to pare costs for the fuel ahead of November’s midterm elections.
Market reaction
At the time of writing, the West Texas Intermediate (WTI) is down 2.21% on the day at $88.35.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
Yemen's Houthi group said on Monday that it carried out three military operations using ballistic and cruise missiles and drones against airports, an oil facility, and military sites across Saudi Arabia, Xinhua News Agency reported.
According to the statement, Houthi spokesman Yahya Saree said that the first operation targeted King Khalid International Airport in the capital Riyadh, claiming it hit its target and disrupted air traffic.
The second targeted a refinery of state oil company Aramco in Rabigh, in the Mecca region, claiming the attack caused a fire at the facility.
The third operation targeted Abha Airport, the Khamis Mushait base, and Akfa camp in the southern Asir region, along with what Saree described as other “sensitive sites” in Najran and Jazan in southwestern Saudi Arabia.
A Houthi spokesman claimed the operations were in response to what it described as intensified Saudi strikes on Houthi-held areas in Yemen.
Meanwhile, Israeli media reported Monday that Israel is preparing a potential attack against Iran, either in coordination with the US or independently.
Seperately, US President Donald Trump showed optimism regarding the outcomes of the current offensive led by Saudi Arabia and the Saudi-backed Yemeni forces against the Houthis. He said, "It will work out very well.”
Market reaction
At the time of writing, the West Texas Intermediate (WTI) is down 2.21% on the day at $88.35.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
- USD/JPY round-trips a dip toward 157.50 on a BoJ speech about AI.
- BoJ Governor Ueda speaks Tuesday at 06:35 GMT, first since the September hike.
- August wages due Tuesday at 23:30 GMT, forecast at 3.7% YoY from 4.7%.
Bank of Japan (BoJ) Governor Ueda speaks on Tuesday at 06:35 GMT, and his first major remarks since the September 18 hike to 1.25% are the next test of October hike bets. Traders give a second hike on October 30 about a one-in-four chance. USD/JPY has crossed 158.00 in both directions in each of the last three sessions and trades just under it.
BoJ Deputy Governor Uchida said on Monday that artificial intelligence (AI) is a large positive demand shock pushing up activity and prices. USD/JPY dipped toward 157.50 around the remarks and was back above 158.00 well before the US data. He also said AI has made financial conditions more accommodative on balance, less than three weeks after the BoJ raised rates to tighten them.
A hike every three months points to December, not October
The BoJ raised its rate in June and again in September, and traders read the three-month gap as its pace. Governor Ueda said after the September hike that the BoJ's focus has moved from lifting inflation toward 2% to stopping it from overshooting. Stopping an overshoot before it happens would mean hiking in October, not waiting for December.
Wage growth is forecast to slow by a fifth in a month
Japan's August labour cash earnings are due on Tuesday at 23:30 GMT, forecast to rise 3.7% YoY after 4.7% in July. A slowdown that size would make an October hike harder to argue for. Governor Ueda speaks before the figures are out, so whatever he says about October comes without them.
The Fed's September minutes follow on Wednesday at 18:00 GMT. The Fed decides on October 28, two days before the BoJ, so the US half of the rate gap gets the first move.
The Yen's range into Governor Ueda
Resistance: The last three sessions have all peaked short of 158.50, the level the October 1 rally stopped under. 159.00, the September 24 high, is the next cap.
Support: Monday's low, just under 157.50, is the highest of the last four sessions. Friday's low, just under 157.00, marks where the payrolls dip ended.
Bias: Buyers keep the edge while 157.50 holds on a closing basis, aiming at 158.50 and then 159.00. The daily Stochastic Relative Strength Index (Stoch RSI) is near 84 and flattening above 80, so a firm-sounding Governor Ueda could pull the pair back to 157.50 without breaking the call. A daily close below 157.00 ends it.
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.
- Gold price flatlines around $4,140 in Tuesday’s early Asian session.
- US Treasuries came under renewed pressure, pushing longer-dated yields to fresh multi-decade peaks.
- Traders are now pricing in a nearly 22.7% likelihood that the Fed will hike rates at its next meeting.
Gold price (XAU/USD) trades on a flat note near $4,140 during the early Asian session on Tuesday. Pressure from a stronger US Dollar (USD) and elevated US Treasury yields was offset by reduced expectations of a Federal Reserve (Fed) rate hike this month.
The benchmark 10-year Treasury yield climbed about 7 basis points (bps) to 5.349%, its highest level since April 3, 2002, before retreating to 5.30%. The yield on the 30-year Treasury bond also rose about 3 bps to 5.661%. Earlier, it was up more than 7 bps to 5.703%, a level not seen since late May 2002. Higher rates typically reduce the appeal of the precious metal relative to yield-bearing assets like Treasuries.
"We could see a near-term drop (in gold prices) before the buyers step in a meaningful way, and it's all to do with the fact that the dollar has been climbing higher and yields are elevated," said Fawad Razaqzada, a market analyst at forex.com.
Expectations that the Fed will tighten its policy this month eased after US Nonfarm Payrolls (NFP) came in weaker-than-expected in September, and the NFP figures for the prior two months were revised lower, data showed on Friday.
Interest-rate swaps showed traders pricing in an almost 22.7% chance that the US central bank lifts benchmark borrowing costs at its October gathering, according to the CME FedWatch tool.
Traders await the minutes of the September Federal Open Market Committee (FOMC) meeting, which is due on Wednesday. This report could help determine the central bank's future monetary policy after it raised interest rates last month for the first time in three years.
Gold recovery still hinges on a sustained turn lower in yields
Analysts at OCBC argue that gold remains constrained by the broader rates backdrop, noting that it is "still waiting for yields to turn." They highlight that gold’s brief "post-US payrolls rebound faded quickly despite a softer US labour report and a further pullback in October Fed hike expectations." The key drag, in their view, is that "long-end yields did not fall sustainably and the USD stayed firm, limiting follow-through in gold."
This dynamic "reinforces the view that lower Fed hike risk alone may not be enough to drive the next leg higher." OCBC stresses that "the more important catalyst is whether softer US data can pull long-end and real yields lower on a more sustained basis." At the same time, they caution that "elevated oil prices remain a complication by keeping inflation and term premium concerns alive."
Against this backdrop, OCBC warns that "near term, gold may remain vulnerable to consolidation if yields stay high," with any "clearer decline in yields and the USD" seen as providing "a firmer basis for recovery."
Logan’s hawkish tilt lifts Fed expectations and supports the Dollar
Fed’s Logan delivers a distinctly more hawkish tone, with a 9.2/10 FXS Speechtracker score standing well above the 8.1/10 historical average, underscoring a stronger inclination toward further tightening. The emphasis that higher yields may reflect increased term premiums, potentially reducing the need for additional tightening, sits in tension with explicit calls for at least 50 bps more in rate hikes and several moves to reverse last fall’s reductions, reinforcing a message that policy is not yet restrictive enough and that inflation will not reach 2% without higher rates. This combination of acknowledging term-premium effects while insisting on more hikes points to a Fed stance that is firmly supportive of the Dollar and keeps upward pressure on US yields.
The FXS Fed Sentiment Index rises by 1.68 points to 136.59, confirming a clear move deeper into hawkish territory well above the neutral 100 threshold. This jump, aligned with the elevated FXS Speechtracker score, signals that market participants should expect a more aggressive policy path, with implications for stronger Dollar demand and continued sensitivity of risk assets to Fed rate expectations.
Technical Analysis: Gold remains capped under the 100-day SMA
In the daily chart, XAU/USD keeps a bearish near-term tone as spot holds beneath the Bollinger simple moving average middle band and the 100-day moving average. Price has slipped away from the recent upper Bollinger band ceiling, while the Relative Strength Index (14) at 38.41 stays in bearish territory, hinting at lingering downside pressure rather than an immediate oversold rebound.
On the topside, initial resistance appears in the $4,270 area, where the Bollinger middle band and the 100-day moving average at $4,275 form a tight capping cluster, ahead of a stronger barrier at the upper Bollinger band around $4,445. On the downside, the lower Bollinger band at $4,100 offers the first line of support, and a sustained break below this boundary would likely open the way to a deeper corrective phase in the coming sessions.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
- AUD/USD rises 0.37% to 0.6972 for second straight session.
- US services cool, but surging input costs revive inflation fears.
- Bullock says three RBA hikes could tame inflation toward target.
The Aussie Dollar registers back-to-back days of gains on Monday, even though US Treasury yields edged higher, underpinning the US Dollar, which appreciated against a basket of six currencies but not versus the Australian Dollar. The AUD/USD trades at 0.6972, up 0.37%.
Aussie resilience holds firm as Wall Street gains offset higher US yields
Wall Street ended Monday’s session with gains, as tech stocks drove the Nasdaq and the S&P 500 higher, even though energy prices remain elevated, sparking a jump in US yields. West Texas Intermediate (WTI) edged lower on news that Europe will withdraw 100 million barrels of diesel and crude from their reserves, while news reported that the traffic is intensifying around the Strait of Hormuz.
The US ISM Services PMI in September eased from 55.4 to 54.9, below forecasts of 55. The index expanded for the 27th straight month, though input costs rose sharply, igniting inflation fears amongst businesses.
Aside from this, the US economic schedule will be light until the release of the Fed’s last meeting minutes on Wednesday, October 7, ahead of Initial Jobless Claims the day after, and Friday’s University of Michigan Consumer Sentiment.
In Australia, the economic docket will feature the AIG Industry Index in August, followed by the release of October’s Consumer Inflation Expectations on October 7.
The Aussie Dollar advanced even though money markets expect the Reserve Bank of Australia (RBA) to remain on hold at least until May of 2027. This happened during RBA Governor Bullock's press conference, when she said that she expected hiking rates three times could be enough to push inflation lower towards the central bank’s target.
AUD/USD Price Forecast: Technical outlook
In the daily chart, AUD/USD trades at 0.6969, keeping a bearish near-term bias as spot holds below the cluster of upward-sloping trend lines and the 50-day simple moving average (SMA) grouped around 0.7086–0.7090. The latest reading of the Relative Strength Index (14) at 34.5 sits just above oversold territory, hinting that while downside momentum is still dominant, selling pressure may be losing some intensity rather than accelerating.
On the topside, immediate resistance is seen at the dense band formed by the upward support-turned-resistance lines around 0.7086–0.7087, followed by the 50-day SMA at 0.7090 and then additional trend-line hurdles near 0.7111 and 0.7118, with a more distant horizontal barrier at 0.7198. On the downside, initial support appears at the recent low near 0.6946, while a deeper floor is referenced by the older downward trend-line break level around 0.6367, which would come into focus only if the current bearish tone extends significantly.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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 Euro.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.34% | 0.15% | 0.03% | 0.07% | -0.31% | 0.37% | 0.28% | |
| EUR | -0.34% | -0.15% | -0.27% | -0.22% | -0.48% | -0.04% | -0.03% | |
| GBP | -0.15% | 0.15% | -0.10% | -0.09% | -0.33% | 0.10% | 0.12% | |
| JPY | -0.03% | 0.27% | 0.10% | 0.03% | -0.26% | 0.23% | 0.25% | |
| CAD | -0.07% | 0.22% | 0.09% | -0.03% | -0.28% | 0.18% | 0.19% | |
| AUD | 0.31% | 0.48% | 0.33% | 0.26% | 0.28% | 0.44% | 0.46% | |
| NZD | -0.37% | 0.04% | -0.10% | -0.23% | -0.18% | -0.44% | 0.00% | |
| CHF | -0.28% | 0.03% | -0.12% | -0.25% | -0.19% | -0.46% | -0.01% |
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).
Forex Market News
Our dedicated focus on forex news and insights empowers you to capitalise on investment opportunities in the dynamic FX market. The forex landscape is ever-evolving, characterised by continuous exchange rate fluctuations shaped by vast influential factors. From economic data releases to geopolitical developments, these events can sway market sentiment and drive substantial movements in currency valuations.
At Rakuten Securities Hong Kong, we prioritise delivering timely and accurate forex news updates sourced from reputable platforms like FXStreet. This ensures you stay informed about crucial market developments, enabling informed decision-making and proactive strategy adjustments. Whether you’re monitoring forex forecasts, analysing trading perspectives, or seeking to capitalise on emerging trends, our comprehensive approach equips you with the insights needed to navigate the FX market effectively.
Stay ahead with our comprehensive forex news coverage, designed to keep you informed and prepared to seize profitable opportunities in the dynamic world of forex trading.
