Forex News
- GBP/JPY consolidates near 211.77 as doji signals growing buyer indecision.
- Bullish RSI supports recovery, but 212.00 resistance limits further gains.
- Break above 212.00 exposes 200-day SMA at 212.98 and 213.43.
GBP/JPY goes nowhere on Wednesday, trading around 211.77 as neither buyers nor sellers can provide direction, following the break of the 50-day Simple Moving Average (SMA) at 211.34 towards the close of the October 20 session.
GBP/JPY Price Forecast: Technical outlook
The GBP/JPY has extended its gains for six days, yet the formation of a ‘doji’ suggests that the uptrend remains fragile as key resistance levels emerge above the 212.00 figure.
The Relative Strength Index (RSI) indicates bullish momentum, while price action shows buyers' hesitation to lift the price above the 212.00 milestone.
In that case, the next key resistance would be the 200-day SMA at 212.98, followed by the 100-day SMA at 213.43. On further strength, the next stop is 214.00.
In a bearish scenario, GBP/JPY needs to drop below the 50-day SMA, which could expose the 211.00 mark. A breach of the latter will expose 210.00, followed by the October 8 swing low of 208.20, followed by the September 30 cycle low of 206.89.
GBP/JPY Price Chart – Daily
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the Euro.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.00% | -0.07% | -0.06% | -0.08% | -0.39% | -0.10% | -0.04% | |
| EUR | 0.00% | -0.14% | -0.07% | -0.12% | -0.32% | -0.14% | -0.08% | |
| GBP | 0.07% | 0.14% | 0.06% | 0.00% | -0.19% | -0.01% | 0.06% | |
| JPY | 0.06% | 0.07% | -0.06% | -0.04% | -0.24% | -0.07% | 0.00% | |
| CAD | 0.08% | 0.12% | -0.01% | 0.04% | -0.21% | -0.02% | 0.04% | |
| AUD | 0.39% | 0.32% | 0.19% | 0.24% | 0.21% | 0.19% | 0.25% | |
| NZD | 0.10% | 0.14% | 0.00% | 0.07% | 0.02% | -0.19% | 0.06% | |
| CHF | 0.04% | 0.08% | -0.06% | -0.00% | -0.04% | -0.25% | -0.06% |
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 Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
- EUR/USD flatlines under 1.1250 as France's 10-year yield tops 5%.
- Four October rallies, each stopping below the one before.
- Moody's reviews France's credit rating on Friday.
France's 10-year government bond yield went above 5% on Wednesday for the first time since 2002, and the Euro hardly moved on it. EUR/USD trades just under 1.1250, and each of its four rallies since October 2 has stopped lower than the one before. The French spread is a weight on the currency, and the rate gap with the US isn't moving to offset it: the Fed and the European Central Bank (ECB) are both expected to hold in October and raise rates in December.
France now pays 1.6 points more than Germany to borrow for a decade
The French 10-year yield touched just over 5% before slipping back under it, and the gap over Germany's 10-year, near 3.4%, widened to about 1.6 points, the widest since 2012. The cost of insuring French debt for five years is at its highest since 2013. Government debt is close to 120% of the economy, and parliament's debate on the 2027 budget resumes on October 27 after more than 2K amendments held it up.
A wider French spread is a cost the whole Euro carries, because it raises the chance that the ECB has to choose between its inflation target and one member's bond market. The ECB's Transmission Protection Instrument (TPI), built in 2022 for that choice, has never been used, and ECB President Lagarde said on October 14 that France's fix lies at home, in its own fiscal policy.
Part of the spread is politics. Student protests have brought partial curfews in Paris, Bordeaux and Nice, and troops are due to support police for marches planned on Saturday, the day after Moody's reviews France's rating.
The rate gap that sets EUR/USD is booked solid until December
The ECB's deposit rate is 2.50% after hikes in June and September, and traders price about a 95% chance it holds on October 29. Euro area inflation was 3.8% in September, with energy up 18.9% from a year earlier, while inflation excluding energy, food, alcohol and tobacco was 2.5%. A rate hike does little about an energy bill set by the US-Iran war.
ECB Chief Economist Lane signalled caution on further moves on Wednesday while energy inflation stays high, and Bundesbank President Nagel, on October 16, said he can't rule out another hike. The Fed's range is 3.75%-4.00%, and prediction markets put an October 28 hold near 86%. With both banks expected to sit out October and move in December, the gap between US and euro area rates has nowhere to go before then. Chief Economist Lane also said wider use of the Euro outside Europe could help the ECB control prices, on a day when the biggest risk to the currency came from inside it.
Friday has the PMIs before Moody's and the weekend after
Bank of Italy Governor Panetta speaks at 12:15 GMT on Thursday, and the euro area's preliminary consumer confidence reading at 14:00 GMT is forecast at -17 after -16.5. Hamburg Commercial Bank (HCOB) Purchasing Managers Index (PMI) figures come at 08:00 GMT on Friday, forecast at 52.8 for manufacturing after 52.9 and at 52.8 for services after 53.0. ECB Executive Board member Cipollone speaks at 14:00 GMT.
S&P Global's US PMIs follow at 13:45 GMT on Friday, forecast at 55.6 for factories and 57.9 for services, above anything the euro area is expected to report. The Dollar Index is just under 102.00, down from the 18-month high near 103.00 it reached in October, and EUR/USD has barely gained from the softer Dollar. Moody's reviews France on the same day as the PMIs, and EU rules have agencies publish sovereign decisions after European markets shut, so EUR/USD trades the PMIs without the rating and opens on Monday with it.
The Euro's levels under a run of lower highs
Resistance: 1.1250 capped Wednesday after Tuesday's high only just cleared it, and the October highs have stepped down from just under 1.1300 on October 2. EUR/USD hasn't traded above 1.1300 since October 1.
Support: 1.1200 has held since Monday's dip to just under it. 1.1150 was the floor on October 12 and October 15, and the October 14 low just above 1.1100 is the bottom of the range.
Bias: Lean short below 1.1250 on a closing basis, targeting 1.1150 and then 1.1100. The daily Stochastic Relative Strength Index (Stoch RSI) has climbed from near zero to about 62 since mid-October and is still rising, which is what could break the run of lower highs. A daily close above 1.1300 ends the short.
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.
- AUD/USD climbs 0.44% to 0.7027, extending its winning streak.
- RBA's Hauser warns inflation outlook is deteriorating despite restrictive policy.
- RBA hike odds nearly double to 60% ahead of Flash PMIs.
The Australian Dollar rallies for the fourth straight day against the US Dollar as market mood remains positive amid high tensions in the Middle East, pointing to a resumption of hostilities, as reported by recent news. Despite this, the AUD/USD trades at 0.7027, up 0.44%.
AUD/USD extends its four-day rally as hawkish RBA expectations outweigh geopolitical uncertainty
US equities closed mostly unchanged but were boosted by the AI trade after hours, with Meta and Tesla reporting earnings. However, in the FX space, the Greenback recovered some ground on news that the US State Department is preparing to issue an order to depart for some personal and family members at the US embassy in Saudi Arabia.
Iran’s foreign minister said the country is ready to give diplomacy another chance, but warned that if the US chooses war, it will face an even greater strategic failure. Meanwhile, Fars reported hearing multiple explosions in Sirik, though their origin and nature remain unknown.
In the US, the economic docket was absent, with traders eyeing Initial Jobless Claims on Thursday, followed by the release of the University of Michigan Consumer Sentiment. Nevertheless, the main focus is on the Federal Reserve monetary policy decision next week and also on the release of the Fed’s preferred inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index.
In Australia, the schedule was absent except for hawkish comments by the Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser, who said that “inflation outlook appears worse than forecast, slightly above expectations,” and that even though monetary policy is effective, the inflation outlook shows signs of deterioration.
Following Hauser’s remarks, money markets had priced in nearly a 60% chance of the RBA raising rates by 25 basis points to 4.85%, compared with a 30% chance a day earlier, according to Prime Terminal data.
Ahead, the Aussie economic docket will feature the release of S&P Global Flash PMIs on October 22.
AUD/USD Price Forecast: Technical outlooks
In the daily chart, AUD/USD trades around 0.7024, maintaining a bearish near-term tone as spot holds beneath the triple simple moving average (SMA) cluster around 0.7077 and a series of upward-sloping trend lines that have shifted into overhead resistance near 0.7086–0.7087 and 0.7111–0.7118. The Relative Strength Index (RSI) at 52.5 is mildly positive but close to neutral, suggesting only modest recovery momentum that so far fails to offset the weight of these caps.
On the topside, initial resistance is seen at the triple SMA near 0.7077, followed by a dense confluence of former support trend lines at 0.7086–0.7087 and then 0.7111–0.7118, while a more distant horizontal barrier sits at 0.7198. On the downside, the immediate focus remains on whether price can hold the current pivot area around 0.7024, with the next notable structural support coming from an upward trend line near 0.6946 and, much lower, the longer-term downward trend-line anchor around 0.6246.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
- GBP/USD sits still under 1.3400 as UK inflation rises to 3.5%, the highest this year.
- Odds of a second BoE hike by December fall to about 48% from 58%.
- UK retail sales on Friday are forecast to fall 0.1% after a 0.5% rise.
UK inflation beat its forecast on the headline, core and monthly measures on Wednesday, and the Pound barely moved. GBP/USD holds just under 1.3400, with no daily close above it since September 15. Traders had a Bank of England (BoE) hike for November 5 almost fully priced before the release, so the number could only change how much of that hike was left to buy.
Hot inflation added three points to a hike priced at 93%
Consumer Price Index (CPI) inflation rose to 3.5% in September from 3.1%, against a 3.4% forecast, and the core rate rose to 2.8% from 2.6%. Prices rose 0.4% on the month against a 0.3% forecast. Transport made the largest upward contribution, with diesel at its dearest since July 2022 and Brent near $109.00 a barrel on the US-Iran war. Producer output prices rose 0.8% on the month, a tenth above forecast, so the costs feeding the next few months of shop prices are still climbing.
Traders put the chance that the BoE raises the UK's Bank Rate from 3.75% on November 5 at about 96% after the release, up from about 93% before it. The Pound gets a hike's lift when traders price it, and this one was already 93% priced. The same release cut the odds of a second hike by December to about 48% from 58%, so a hotter inflation report left the market expecting fewer UK hikes this year, not more.
Services inflation rose in the first report since Governor Bailey called the spillover limited
BoE Governor Bailey said on October 16 that he saw little evidence yet of the energy shock feeding into pay and the prices of everything else, which is what economists call second-round effects. Services inflation, the figure the BoE watches most closely for that, rose to 3.7% from 3.4% in Wednesday's report, and recreation and culture prices rose to 2.3% from 1.6%.
A spillover into services is what turns one hike into several, and several hikes are the part of the BoE story not yet in the Pound's price. October's inflation figures come out after the November 5 decision, which makes Wednesday's report the last one the Monetary Policy Committee (MPC) sees before it votes.
The Office for National Statistics (ONS) also put public sector net borrowing at £24.52 billion for September, with spending, debt interest included, rising faster than income. That bill goes into Chancellor Healey's first Budget on October 28. The 10-year gilt yield ended September just below 5.4% after a 19-year high earlier in the month, so a Budget that borrows more could reach the Pound through the bond market before the BoE votes.
The Budget lands on Fed day, a week before the BoE votes
GfK consumer confidence at 23:01 GMT on Thursday is forecast at -15 after -13. Retail sales follow at 06:00 GMT on Friday, forecast to fall 0.1% on the month after a 0.5% rise, with annual growth slowing to 1% from 2.4%. Sales excluding fuel are forecast to grow 1.5% on the year, faster than the total, so the forecasts have Britons buying less fuel than a year ago at the highest diesel prices since 2022.
S&P Global's preliminary UK Purchasing Managers Index (PMI) figures at 08:30 GMT on Friday are forecast at 51.8 for both manufacturing and services. The US versions at 13:45 GMT are forecast at 55.6 and 57.9, and University of Michigan sentiment at 14:00 GMT at 46.3, unchanged. A weak set of UK figures would hit the December odds first, since November is already in the price.
Chancellor Healey presents the Budget on October 28, the same day the Fed decides, with prediction markets near 86% for a hold at 3.75%-4.00%. The BoE follows on November 5 with a November hike already in the Pound's price and the December call still open.
The Pound's levels around its 200-day average
Resistance: 1.3400 stopped the highs on Tuesday and Wednesday, and GBP/USD hasn't had a daily close above it since September 15. 1.3500 is where the September 16 drop began.
Support: The 200-day Exponential Moving Average (EMA), just under 1.3400, is right under the price, and Tuesday was the first time the pair traded above it since mid-September. Wednesday's low just above 1.3350 comes next, then 1.3300, where Monday's dip ended.
Bias: Short below 1.3400 on a closing basis, looking for 1.3350 and then 1.3300. The daily Stochastic Relative Strength Index (Stoch RSI) has moved into overbought territory, near 85, after the climb from the October 14 low. A daily close above 1.3450 ends the short.
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.
New Zealand's third-quarter Consumer Price Index (CPI) came in a tenth under forecast on both the quarterly and the annual measure, and it took the Kiwi off its four-week high. NZD/USD fell from just above 0.5700 to just under it on the release bar, back where it traded before climbing through that level earlier in the session.
Prices rose 0.7% on the quarter against a 0.8% forecast, and the annual rate eased to 3.7% from 4.1% against 3.8% expected. The Reserve Bank of New Zealand (RBNZ) had projected 3.9% in September. The Kiwi's five-session climb had priced an October 28 hike on that projection, and the release has undercut it.
Non-tradable prices rose 1.0% on the quarter and 3.3% on the year, so the softness sat in tradable prices, where petrol and diesel are counted. Westpac put fuel's drag on the quarterly rate at about 0.4 points. Westpac was the one bank in the survey to forecast 3.7%, and it called the dip a temporary reprieve before the number came out.
Market reaction
The release has taken back about a tenth of the five-session climb from the October 14 low just above 0.5550. That climb stopped short of the 50-day Exponential Moving Average (EMA), just above 0.5700, which NZD/USD has traded under since early September. Daily momentum was close to overbought going into the release.
NZD/USD 5-minute chart
Inflation FAQs
Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
MUFG’s Lloyd Chan highlights that MSCI reclassification risk could trigger a broader Indonesia risk-premium shock, weighing on the Rupiah and local assets. The bank notes existing IDR headwinds from high Oil prices, weaker external balances and elevated US yields, and maintains a depreciation bias with specific USD/IDR forecasts through mid-2027, alongside expectations for higher BI policy rates.
MSCI shock adds to rupiah pressures
"MSCI risk extends beyond equities. A potential move from Emerging Market directly to Standalone status risks becoming a broader Indonesia risk-premium shock, affecting foreign portfolio participation, IDR, BI policy and local bond yields."
"Foreign confidence is the key transmission channel. Passive selling could reach around USD3.1bn, with a stress scenario of up to USD5.5bn including assumed active de-risking. More importantly, persistent governance and investability concerns could keep foreign institutional participation structurally weaker."
"Equities are cheaper, but not yet compelling. The JCI correction has improved valuations, but persistent foreign selling, weaker earnings expectations and the absence of a clear marginal buyer argue against calling a durable bottom. Credible reforms and a return of foreign flows are needed for a sustained re-rating."
"Higher BI rates may slow, rather than reverse, the rupiah depreciation trend. We expect BI to raise the policy rate to 6.25% by end-2026, but tighter policy cannot directly resolve MSCI’s structural concerns. Local bond yields are increasingly attractive, but rupiah weakness would likely undercut their appeal."
"MSCI compounds existing IDR headwinds. Equity outflows add to an already difficult mix of high oil prices, weaker external balances and elevated US yields. We maintain a depreciation bias, with USD/IDR forecast at 18,350 in Q4 2026, 18,500 in Q1 2027 and 18,700 in Q2 2027."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)B
TD Securities strategists argue that USD/KRW’s roughly 14% decline from its June peak leaves the pair at the bottom of its two-year range. Historical mean-reversion patterns, overbought KRW valuation and fading equity inflows support a move higher in USD/KRW toward 1375 by year-end 2026 and 1400 in Q1 2027.
KRW rally seen losing momentum
"After a prolonged USD/KRW drawdown from the peak in June, history points to high likelihood of a near-term rebound. Current FX valuation and fading support from portfolio flows also reinforce the case for higher USD/KRW toward 1400."
"USD/KRW is at the bottom of its two-year range despite last week's KOSPI circuit breaker event. The pair is now down roughly 14% from its peak, placing the current decline among the largest drawdowns since 1999. Historically, drawdowns of a similar magnitude have been relatively rare."
"History points to a tendency for mean reversion. In the six prior instances since 1999 when USD/KRW experienced a drawdown of roughly -14% or more from a rolling 1y high, the pair generally went on to recover over the following 1-, 3- and 6-month horizons, suggesting that declines of this magnitude have often marked the start of the retracement. Across the three horizons, USD/KRW was consistently up 5 out of 6 times (83% up ratio)."
"Our high-frequency fair-value (HFFV) framework shows KRW is overbought and reinforces the view that USD/KRW should ultimately gravitate back toward short-term fair value now around 1400, in-line with historical magnitude of USD/KRW upside from the backrest and our official FX forecast (1375 for year-end '26 and 1400 for Q1 '27)."
"Investors who have turned more bullish USD should consider higher USD/KRW, where the USD positioning is likely still not long. We also see scope for KRW to weaken vs regional peers like JPY and CNY. JPY/KRW continues to trade near multi-decade low, while CNY is supported by FX settlements and upside data surprise in China."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- NZD/USD rises for a fifth straight session to just above 0.5700.
- RBNZ Chief Economist Conway calls the October 28 decision wide open.
- Annual inflation is forecast at 3.8%, above the RBNZ's 1%-3% target band.
Stats NZ's third-quarter Consumer Price Index (CPI) comes at 21:45 GMT on Wednesday, with NZD/USD just under its 50-day average and the Reserve Bank of New Zealand (RBNZ) deciding on October 28. The pair trades just above 0.5700 after five straight daily gains, its highest since September 23. Swaps price about an 80% chance that the RBNZ raises its Official Cash Rate (OCR) to 3.00% from 2.75%, so the release can make the hike a certainty or put it back in doubt.
Traders price at 80% a hike Chief Economist Conway calls wide open
The New Zealand Dollar was among the stronger majors on Wednesday, with the US Dollar softer against most of them. New Zealand's card spending rose 6.9% on the year in September after 3.5% in August, and faster spending at home is the sort of figure that keeps a hike on the table. The RBNZ raised its rate in July and again on September 2, and a third hike to 3.00% would take the OCR to within a point of the Fed's 3.75%-4.00% range, measured to its midpoint.
RBNZ Chief Economist Conway said the path for rates is most likely up but that the October decision is wide open. In the record of the September 2 hike to 2.75%, he was one of two committee members who saw the risks to inflation as balanced, while the other four saw them tilted higher. One of the committee's two balanced voices now says rates are most likely going up.
Chief Economist Conway also named Crude Oil prices and the exchange rate among the upside risks to inflation, which ties the decision straight back to NZD/USD. A weaker Kiwi raises the price of everything New Zealand buys abroad, so the five-session rally has trimmed one of the upside risks Chief Economist Conway named.
The last quarter's inflation beat the RBNZ's projection by two tenths
Third-quarter CPI is forecast to rise 0.8% on the quarter after 1.5%, with the annual rate easing to 3.8% from 4.1%. The RBNZ's projections are 0.8% and 3.9%, and its target band is 1%-3%, so even a release on forecast leaves annual inflation 0.8 points above the top of the band. The RBNZ expects inflation back inside the band by mid-2027 and at the 2% midpoint later that year.
Analysts expect a hike on October 28 unless the release falls well short of forecast. It's possible the third quarter comes in under the RBNZ's projection, though the second quarter came in at 4.1% against a projected 3.9%. For NZD/USD, an annual figure at or above 3.9% would leave the hike close to fully priced, and the 50-day average just overhead would be the first test of that. Some analysts already see the Kiwi as cheap against its short-term fair value.
The Fed is priced at about 90% to hike by December
Thursday's US jobless claims, at 12:30 GMT, are expected at 200K against the prior 199K. S&P Global's preliminary US Purchasing Managers Index (PMI) readings come out on Friday at 13:45 GMT, with manufacturing expected at 55.6 after 55.9 and services at 57.9 after 58.8.
Fed futures price a hold on October 28 and about a 90% chance of a hike by December, which matters to the Kiwi because the two banks move the same gap from opposite ends. A quarter-point RBNZ hike in October narrows it by a quarter-point, and a quarter-point Fed hike in December puts it back where it started. US data that firms the December case shrinks what an October RBNZ hike is worth to NZD/USD.
The New Zealand Dollar's levels under its 50-day average
Resistance: NZD/USD has been under its 50-day Exponential Moving Average (EMA) since early September, and Wednesday's high stopped just short of it, a little above 0.5700. 0.5750 is where the September 22 bounce ended, and the September 18 high sits just under 0.5800.
Support: Wednesday's low just above 0.5650 held above Tuesday's. 0.5600 is the level the five-session run started from on October 15.
Bias: Long while 0.5650 holds on a closing basis, aiming at 0.5750 and then 0.5800. The daily Stochastic Relative Strength Index (Stoch RSI) is up to about 78 and heading for overbought, so a CPI miss would land on a stretched run. A daily close under 0.5600 ends the long.
NZD/USD daily chart
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.
The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.
Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.
The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
Commerzbank’s Lay and Hao highlight Taiwan’s record export orders driven by AI-related ICT and electronics, supporting a robust export-led expansion into Q4. The Central Bank of the Republic of China sees a sustained technology investment cycle and has raised its GDP forecasts, but maintains a wait-and-see stance on rates as USD/TWD climbs on capital outflows and wider rate differentials.
AI boom supports growth, weighs on TWD
"Taiwan's export orders surged 62.4% yoy to a record USD114.2bn in September, slightly above the Bloomberg consensus of 61.7%, although growth moderated from 71.4% in August. This marked the 20th consecutive month of annual growth. Q3 orders reached a record USD315.1bn, up 65.0% yoy, underscoring the sustained strength of global demand for AI-related products. "
"Nonetheless, the latest figures reinforce the Central Bank of the Republic of China’s (CBC) assessment that Taiwan's economy is benefiting from a sustained technology investment cycle rather than a short-lived recovery in external demand. CBC raised its 2026 GDP growth forecast to 11.48% in September, while projecting a moderation to 5.82% in 2027, partly reflecting a higher base."
"Despite the exceptionally strong growth outlook, the latest export orders are unlikely on their own to prompt further monetary tightening. CBC held its policy rate at 2.0% in September, although inflation risks are seemingly rising. Headline CPI inflation accelerated to 2.73% yoy in September, above the CBC's full-year forecast of 2.03%, while elevated energy prices and persistent services inflation remain key concerns. CBC is likely to maintain its wait-and-see stance, assessing whether price pressures become more persistent before considering further tightening."
"For TWD, strong export performance and Taiwan's substantial external surplus provide underlying support, but near-term movements remain dominated by foreign portfolio flows and global risk sentiment. USD/TWD has risen by 3.8% to 32.60 since its early September low of around 31.40."
"This was driven by the firmer USD, capital outflows, and higher interest rate differential vs USD. CBC has emphasised its willingness to intervene to contain excessive exchange-rate volatility. Given the rapid rise in the past month, we could see CBC step up intervention to restrain the upside in USD/TWD."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- XAG/USD retreats from $58.18 as buyers fail to establish higher highs.
- RSI remains bearish but flattens, signaling weakening directional momentum.
- A break below $56.38 exposes $55.00 and potentially $50.00 next.
Silver (XAG/USD) retreats on Wednesday after hitting a daily high of $58.18, falling below the $58.00 mark as the US Dollar strengthens amid rising US Treasury yields. At the time of writing, XAG/USD trades at $57.87 a troy ounce, down 0.20%.
XAG/USD Price Forecast: Technical outlook
The trend is downward, with Silver prices falling below $60.00. This week, after trending up for two of the last three days, XAG/USD failed to reach a higher high, hinting that buyers are losing steam and sellers are stepping in.
From a momentum standpoint, the Relative Strength Index (RSI) is bearish, though it has turned flat. This means that neither buyers nor sellers are in charge.
For a bearish continuation, XAG/USD must clear the October 20 low of $56.38. Beneath the next stop is the $55.00 psychological level, followed by the $50.00 milestone.
For a bullish reversal, buyers must push Silver above $60.00. A breach of that level will expose the March 23 low-turned resistance at $61.01, followed by the 100-day Simple Moving Average (SMA) at $62.56 and the 50-day SMA at $63.51.
XAG/USD Price Chart – Daily
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
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