Forex News
- Silver price jumps to near $57.30 as US Treasury Yields fall.
- AI growth concerns weigh on US bond yields.
- Lower US bond yields push the US Dollar Index down to 101.75.
Silver price (XAG/USD) trades 0.35% higher at around $57.30 during the European trading session on Tuesday. The white metal rises as United States (USD) Treasury Yields come under pressure after a sharp upside move the previous day.
As of writing, 10-year US Treasury Yields are down 0.5% to near 5.12%. Yields on US-backed securities gained almost 1.2% to near 5.14%. Theoretically, a drop in US bond yields comes in as a relief of non-yielding assets, such as Silver.
Lower US bond yields have also weighed on the US Dollar (USD). In European trade, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.22% lower to near 101.75.
AI growth concerns hit long-end yields
According to Deutsche Bank, mounting “Artificial Intelligence (AI)-related growth concerns helped to drive a decent rally for sovereign bonds,” with the US 10-year Treasury yield falling “down -16.5bps last week (+1.5bps Friday) to 5.07%.” Strategists highlight that “it was the biggest weekly decline for the 10yr yield since August 2025,” while the “30yr Treasury yield fell -17.5bps (+1.5bps Friday) in its biggest weekly decline since April 2025,” underscoring the intensity of the move at the long end of the curve.
Silver Technical Analysis
In the daily chart, XAG/USD trades at $57.34, keeping a bearish near-term tone as it remains capped beneath the 20-day exponential moving average (EMA) at $59.85. Price action stays below this key dynamic barrier, suggesting rallies are likely to face selling interest, while the Relative Strength Index (RSI) at 38.15 holds in bearish territory just above oversold, hinting that downside pressure persists but is not yet extreme.
On the topside, the 20-day EMA at $59.85 is the immediate resistance level that bulls need to reclaim to alleviate the current negative bias. On the downside, the July 17 low at $54.77 is the key support level.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
Claire Fan at Royal Bank of Canada (RBC) reports that Canadian business sentiment improved until August 21 but weakened markedly after Canada-U.S. trade talks broke down. Export and investment expectations deteriorated while inflation expectations rose, with half of firms planning to pass cost increases on to customers. Consumer near-term inflation expectations remain elevated, while longer-term expectations have risen significantly, driven primarily by the ongoing Middle East conflict.
Trade tensions lift inflation expectations
"Conditions among firms generally improved through early August, but evidence collected after the breakdown of Canada-U.S. trade talks on August 21 pointed to renewed weakness in sentiment, exports and investment alongside rising inflation expectations."
"Firms' one- to two-year-ahead inflation expectations declined between May and August as oil prices and trade uncertainty moderated, but resurged in September to near spring highs as those trends reversed."
"Firms' near-term inflation expectations remained below elevated April levels through July and August but rose sharply in September, to 3.7% one-year-ahead and 3.1% two-years-ahead."
"Concerningly, half of firms surveyed—more than last quarter—plan to pass on cost increases to customers."
"Consumer near-term inflation expectations were little changed at elevated levels. New development in Q3 was that longer-term (five-year-ahead) expectations rose significantly to match elevated shorter-term expectations, driven primarily by the ongoing war in the Middle East."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- NZD/USD rose following PBOC's decision to keep benchmark rates unchanged at 3.00% and 3.50%.
- RBNZ rate hike expectations remain high ahead of crucial upcoming inflation data.
- USD weakness supported the pair as markets bet on unchanged Fed rates in October.
NZD/USD extends its gains for the fourth consecutive day, trading around 0.5690 during European hours on Tuesday. The pair appreciated as the New Zealand Dollar (NZD) held its losses following the latest interest rate announcement from the People’s Bank of China (PBOC). On Tuesday, China's central bank decided to keep its benchmark Loan Prime Rates (LPRs) unchanged, maintaining the one-year LPR at 3.00% and the five-year LPR at 3.50%.
Markets are largely pricing in a third consecutive rate hike next week, which would lift the policy rate to 3.00%, with further increases expected to push rates to 3.75% or higher next year, well above the Reserve Bank of New Zealand’s (RBNZ) estimate of 3.20%. Last week, Chief Economist Paul Conway stated that the late-October decision remained open, adding that the central bank still viewed a higher official cash rate as the most likely next move, though it had not yet decided on the timing. Consequently, the upcoming inflation report will be crucial in assessing whether further tightening is warranted.
Meanwhile, the NZD/USD pair gained ground as the US Dollar (USD) struggled amid growing market expectations that the Federal Reserve (Fed) will leave interest rates unchanged. Fed Chair Kevin Warsh expressed optimism last week regarding the resilience of the US economy, though he refrained from offering specific guidance on the timing or likelihood of future rate adjustments.
According to the CME FedWatch tool, Fed funds futures traders expect the central bank to maintain current rates at its October policy meeting, while pricing in a 93.5% probability of a rate hike in December.
Dollar rally seen losing steam as TD Securities flags signs of topping
According to TD Securities, “after a month of relentless rally, the USD shows signs of topping,” with the team highlighting that the recent surge in the Dollar now appears to be running into resistance as momentum fades.
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.
Valentin Tataru at ING highlights that the National Bank of Romania’s preference for limited EUR/RON moves has anchored prices but fostered real appreciation. The Leu has weakened modestly from around 5.00 to 5.34 per Euro, while domestic wages and costs rose faster than trading partners, raising concerns about overvaluation, competitiveness and the current account over the coming years.
Exchange rate anchor, competitiveness strain
"The leu formally floats, but the NBR has historically limited large EUR/RON movements. For an import-intensive economy, that policy has clear benefits. A large depreciation would quickly raise the domestic cost of imported goods."
"The euro traded near RON 5.09 in March 2026, around RON 5.23 by May and roughly RON 5.34 by early October – a noticeable weakening of the leu after years of remarkable stability not far from the 5.00 level. Even so, the currency has moved far less than domestic costs."
"That leaves the NBR facing a genuine trade-off. Allow more nominal depreciation and import additional inflation in the short term, or limit depreciation and accept a gradual deterioration in cost competitiveness when domestic costs rise faster than those of trading partners."
"Romania has largely opted for a modified version of the latter approach, managing to combine exchange rate stability with rapid wage growth and persistent inflation for several years. The needed adjustment did not disappear, however, but it was largely redirected into real appreciation and a wider current-account deficit."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
United Overseas Bank’s (UOB) Quek Ser Leang notes USD/CHF closed firmer at 0.8265 after trading in a tight 0.8228–0.8270 band. Intraday, a slight uptick in momentum points to modest gains within 0.8240–0.8285. However, on a 1–3 week view, UOB still sees scope for a decline toward 0.8200, as long as the pair stays below strong resistance at 0.8300.
Dollar-Swiss rebound seen as corrective
"24-HOUR VIEW: Yesterday, we expected USD “to range-trade between 0.8220 and 0.8270.” USD then traded within a narrower range of 0.8228/0.8270 before closing on a firm note at 0.8265 (+0.32%). The slight increase in upward momentum suggests USD could edge higher today, but any advance should stay within a 0.8240/0.8285 range."
"1-3 WEEKS VIEW: Last Friday (16 Oct, spot at 0.8280), we highlighted that “downward momentum is building and if USD closes below 0.8245, it could decline toward 0.8225.” After USD subsequently fell to a low of 0.8215, we highlighted yesterday (19 Oct, spot at 0.8240) that USD “could decline further to 0.8200.” We will continue to hold the same view as long as USD holds below 0.8300 (no change in ‘strong resistance’ level)."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Commerzbank’s Tatha Ghose expects the MNB to keep its base rate at 5.50% and argues that Hungary’s recovering real economy and re‑accelerating seasonally adjusted inflation momentum do not justify easing. With a large fiscal deficit, a lower future inflation target and ERM II ambitions, he sees scope for tighter policy and warns that ongoing rate‑cut talk is holding back HUF’s next leg higher.
MNB stance seen too loose for HUF
"Hungary's National Bank (MNB) is unanimously expected by analysts to leave its base rate unchanged at 5.50% later today; we hold the same view. The crucial point of interest will be whether or not MNB will still signal rate cuts as a realistic option for November or December."
"Our preferred seasonally-adjusted month-on-month measures, including the rate of change of MNB’s underlying core indicators, have re-accelerated from disinflationary territory to beyond target. Monetary policy should react to this prospective momentum, not take comfort from favourable base effect."
"Fiscal policy reinforces the same conclusion. IMF warned about potential 7.5% of GDP fiscal deficit this year, and no convergence back with the Maastricht ceiling in the medium-term under unchanged policies. Such a deficit outlook is already a key pro-inflationary factor."
"Yet further rate cuts appear to be still under consideration. Until this changes, HUF will not be ready for its next major leg up, in our view."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- Gold price falls to near $4,120 amid signs of recovery in US bond yields and higher oil prices.
- US Treasury Yields rebound ahead of Meta's Q3 earnings scheduled for Wednesday.
- Energy supply risks accelerate as Iran warns extending blockade to other straits beyond Hormuz.
Gold price (XAU/USD) declines to near $4,120 in the European trade on Tuesday . The precious metal faces selling pressure amid a recovery in yields on United States (US) bonds and rising oil prices.
US Treasury Yields have shown signs of recovery, with US hyperscalers set to report their Q3 earnings in near time. As of writing, 10-year US Treasury Yields are down 0.35% to near 5.13%, but gained 1.2% on Monday. Theoretically, higher yields on US-backed assets diminish the appeal of non-yielding assets, such as Gold.
What to expect from Q3 earnings of US hyperscalers
The US Q3 earnings season has kicked off and Meta will one of five hyperscalers, which will be the first to report its quarterly performance on Wednesday. Microsoft, Amazon and Google are scheduled to report their Q3 results next week.
According to Goldman Sachs, Meta is one of five AI hyperscalers expected to increase combined capital expenditure to about $1.2 trillion next year, Reuters reports.
Such a case would accelerate US Treasury yields, making growth a compelling bet for investors compared to traditional assets.
US Treasury Yields were under pressure in the past few weeks, as market experts started doubting the sustainability of continued investments by hyperscalers in building data centres.
Analysts at Deutsche Bank highlighted that, against the backdrop of mounting AI-related growth concerns, fixed income markets saw a notable flight to safety, with these worries helping to “drive a decent rally for sovereign bonds.” In particular, they point out that the “US 10yr Treasury yield” was “down 16.5bps last week (+1.5bps on Friday) to 5.07%,” underscoring the extent of the move as investors reassessed the growth outlook and rotated into government paper.
Oil price rises amid high risk premium due to Middle East risks
The oil prices have gained almost 15% in the past two weeks from their recent lows of $86.32. At press time, the WTI Oil price trades slightly higher at around $98.45. Market participants continue to offer risk premium to oil prices amid ongoing conflicts in the Middle East.
Reports showing that Iran could extend the scope of blockade to the Bab al-Mandeb Strait and the Suez Canal, and is prepared for retaliation against US-Israel attacks have prompted fears of energy supply risks.
A secretary of Iran’s Supreme National Security Council, Mohsen Rezaei, warned this weekend that Tehran has prepared a new retaliation plan for any renewed US-Israeli attack.
Fed moves into blackout period
The blackout period for Federal Reserve (Fed) policymakers ahead of the monetary policy announcement has started. So far we know, several Fed officials have stressed on bringing inflation down to the 2% target, but have not indicated any urgency for another interest rate hike.
The CME FedWatch tool also shows traders are confident that the Fed will leave interest rates unchanged in October and raise them in December.
Gold Technical Analysis
In the daily chart, XAU/USD trades near $4,120.00, keeping a bearish near-term bias as it holds beneath the 20-day Exponential Moving Average (EMA) at $4,186.57. The metal has retreated from recent highs and now sits below this key dynamic barrier, suggesting that rallies are being capped by overhead supply. The Relative Strength Index (RSI) at 43.66 stays below the midline, hinting at still-negative, though not oversold, momentum.
On the topside, immediate resistance is defined by the 20-day EMA at $4,186.57, and a daily close above this level would be needed to ease downside pressure and open the way for a more sustained recovery towards $4,300. On the downside, the psychological level of $4,000 is expected to remain key support for the precious metal.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
AI stocks FAQs
First and foremost, artificial intelligence is an academic discipline that seeks to recreate the cognitive functions, logical understanding, perceptions and pattern recognition of humans in machines. Often abbreviated as AI, artificial intelligence has a number of sub-fields including artificial neural networks, machine learning or predictive analytics, symbolic reasoning, deep learning, natural language processing, speech recognition, image recognition and expert systems. The end goal of the entire field is the creation of artificial general intelligence or AGI. This means producing a machine that can solve arbitrary problems that it has not been trained to solve.
There are a number of different use cases for artificial intelligence. The most well-known of them are generative AI platforms that use training on large language models (LLMs) to answer text-based queries. These include ChatGPT and Google’s Bard platform. Midjourney is a program that generates original images based on user-created text. Other forms of AI utilize probabilistic techniques to determine a quality or perception of an entity, like Upstart’s lending platform, which uses an AI-enhanced credit rating system to determine credit worthiness of applicants by scouring the internet for data related to their career, wealth profile and relationships. Other types of AI use large databases from scientific studies to generate new ideas for possible pharmaceuticals to be tested in laboratories. YouTube, Spotify, Facebook and other content aggregators use AI applications to suggest personalized content to users by collecting and organizing data on their viewing habits.
Nvidia (NVDA) is a semiconductor company that builds both the AI-focused computer chips and some of the platforms that AI engineers use to build their applications. Many proponents view Nvidia as the pick-and-shovel play for the AI revolution since it builds the tools needed to carry out further applications of artificial intelligence. Palantir Technologies (PLTR) is a “big data” analytics company. It has large contracts with the US intelligence community, which uses its Gotham platform to sift through data and determine intelligence leads and inform on pattern recognition. Its Foundry product is used by major corporations to track employee and customer data for use in predictive analytics and discovering anomalies. Microsoft (MSFT) has a large stake in ChatGPT creator OpenAI, the latter of which has not gone public. Microsoft has integrated OpenAI’s technology with its Bing search engine.
Following the introduction of ChatGPT to the general public in late 2022, many stocks associated with AI began to rally. Nvidia for instance advanced well over 200% in the six months following the release. Immediately, pundits on Wall Street began to wonder whether the market was being consumed by another tech bubble. Famous investor Stanley Druckenmiller, who has held major investments in both Palantir and Nvidia, said that bubbles never last just six months. He said that if the excitement over AI did become a bubble, then the extreme valuations would last at least two and a half years or long like the DotCom bubble in the late 1990s. At the midpoint of 2023, the best guess is that the market is not in a bubble, at least for now. Yes, Nvidia traded at 27 times forward sales at that time, but analysts were predicting extremely high revenue growth for years to come. At the height of the DotCom bubble, the NASDAQ 100 traded for 60 times earnings, but in mid-2023 the index traded at 25 times earnings.
According to a Reuters report, four sources familiar with the Bank of Japan’s (BoJ) thinking have cited that the central bank will leave interest rates steady and raise its inflation forecast in the October policy meeting. The report claims that the BoJ may slightly upgrade their inflation forecast for the fiscal year 2027 as rising oil prices continue to feed through to consumer prices.
Bank of Japan FAQs
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
Here is what you need to know on Tuesday, October 20:
The British Pound gathers strength against its major rivals early Tuesday following the upbeat labor market figures, while the US Dollar (USD) struggles to find demand as US Treasury bond yields fail to build on Monday's rebound. Later in the European session ZEW sentiment data for Germany and the Eurozone will be watched closely by market participants. In the second half of the day, the US economic calendar will feature Housing Starts, Building Permits and Pending Home Sales figures for September.
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.17% | -0.36% | -0.24% | -0.24% | -0.27% | -0.44% | -0.15% | |
| EUR | 0.17% | -0.22% | -0.05% | -0.07% | -0.08% | -0.27% | 0.02% | |
| GBP | 0.36% | 0.22% | 0.17% | 0.14% | 0.15% | -0.07% | 0.23% | |
| JPY | 0.24% | 0.05% | -0.17% | -0.01% | -0.01% | -0.23% | 0.08% | |
| CAD | 0.24% | 0.07% | -0.14% | 0.01% | -0.01% | -0.20% | 0.09% | |
| AUD | 0.27% | 0.08% | -0.15% | 0.01% | 0.01% | -0.20% | 0.11% | |
| NZD | 0.44% | 0.27% | 0.07% | 0.23% | 0.20% | 0.20% | 0.30% | |
| CHF | 0.15% | -0.02% | -0.23% | -0.08% | -0.09% | -0.11% | -0.30% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
The UK's Office for National Statistics reported on Tuesday that the ILO Unemployment Rate declined to 4.7% in the three months to August from 4.9%. This print came in better than the market expectation of 4.9%. In this period, the Employment Change was 102K, compared to 67K previously, and the annual wage inflation, as measured by the change i the Average Earnings Excluding Bonus, rose to 3.7% from 3.6%. Following the employment data, GBP/USD gathered bullish momentum and was last seen trading near 1.3350, rising about 0.4% on the day. Reflecting the broad-based GBP strength, GBP/JPY gains about 0.2% and trades at ist highest level in a month at 211.20, while EUR/GBP loses 0.2% and trades near 0.8400.
After starting the day under modest bearish pressure, the US Dollar (USD) Index staged rebound and closed virtually unchanged on Monday, supported by the recovery seen in the US Treasury bond yields. Early Tuesday, the 10-year US yield retreats toward 5.1% and the USD Index stays in negative territory below 101.80.
EUR/USD struggled to gather recovery momentum despite the renrewed USD weakness and trades below 1.1250 in the European morning on Tuesday.
Euro volatility risk rises as ECB dilemma over France comes into focus
Analysts at Rabobank argue that the current turmoil in France leaves the Eurozone facing a stark policy dilemma. They frame the choice as a “whispered realpolitik binary” between “the European Central Bank (ECB) bailing France out if needed, at a cost to the Euro and the fury of Germany,” or refraining from support “at a cost to EU economic, political, and market stability.” Rabobank further questions whether “the ECB [could] bail everybody else out from French contagion and leave Paris to sort out its mess,” underscoring the potential for spillovers across the bloc. In their view, “whatever happens now, more volatility seems far more likely than a ‘reversion to mean’,” reinforcing the sense that markets will remain highly sensitive to any escalation in French risks and the ECB’s response.
During the early trading hours of the Asian session, the People’s Bank of China (PBOC), China's central bank, announced that it left its Loan Prime Rates (LPRs) unchanged, with the one-year and five-year LPRs holding steady at 3.00% and 3.50%, respectively.
USD/JPY stays on the back foot on Tuesday and declines toward 158.00 after closing in the green on Friday. Japanese Finance Minister (FM) Satsuki Katayama said on Tuesday that there are no decisions made on funding expected defense spending increase. Katayama added that the government will consider measures to ensure stable funding while focusing on fiscal sustainability.
USD/CAD declines for the fourth consecutive trading day on Tuesday and trades below 1.4100, losing about 0.2%. On Monday, the data from Canada showed that the Consumer Price Index increased by 0.1% on a monthly basis in September. This print followed the 0.1% decline recorded in August and came in below the market expectation of 0.2%.
Gold remained under modest bearish pressure on Monday as US yields rose and registered daily losses. The precious metal finds it difficult to attract buyers early Tuesday and trades below $4,150 amid a reescalation of geopolitical tensions in the Middle East.
Iran’s Islamic Revolutionary Guard Corps (IRGC) said on Monday that Tehran has not yet completely closed the Strait of Hormuz and can expand the scope of the blockade to the Bab al-Mandeb Strait and the Suez Canal, Tehran Times reported.
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.
Deutsche Bank strategists reports that US equities outperformed Europe, with the S&P 500 rising even as most constituents fell. The NASDAQ and Philadelphia semiconductor index led gains as the recent AI‑related selloff stabilised. This tech‑driven optimism pushed US Treasury yields higher, with real yields driving the move and markets pricing in slightly more Federal Reserve rate hikes into mid‑2027.
AI stabilisation lifts tech and yields
"The improvement was led by tech stocks, as the NASDAQ (+1.11%) had its best day in two weeks, and the Philly semiconductor index (+1.61%) finally ended a relentless run of 8 consecutive declines. So given the concentration of tech in the broader index, that actually helped the S&P 500 (+0.41%) to post a steady gain, even as almost two-thirds of components within the index lost ground on the day."
"That AI stabilisation also pushed US Treasury yields higher, as it countered fears about an AI-related slowdown. Indeed, that was clear from the fact that higher real yields drove the bulk of the rise in Treasury yields yesterday, rather than inflation breakevens. So Treasury yields saw a consistent rise across the curve, with the 2yr yield (+6.5bps) up to 4.77%, whilst the 10yr yield (+6.6bps) rose to 5.14%."
"The AI trade has reversed back again this morning with the KOSPI (-4.39%) leading the declines, dragged down by chip heavyweight SK hynix Inc. (-5.17%), which is on track for its lowest close since April. The Nikkei 225 (-1.08%) is also being weighed down by tech. Elsewhere, the Hang Seng (-0.95%) is also falling after reopening following a holiday, while China’s CSI 300 (-0.51%) is also soft."
"Additionally, the S&P/ASX 200 (-0.40%) is also edging lower with National Australia Bank (NAB) shares sliding around -3.0% after the lender announced restructuring charges and job cuts. Meanwhile, S&P 500 futures are up marginally (+0.06%), with Nasdaq 100 futures slipping (-0.20%) along with the overnight tech retreat. Stoxx (-0.60%) futures are continuing Europe's recent declines and 10yr USTs are -2.1bps lower standing at 5.12% as we go to print."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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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.
