Forex News
- USD/JPY closed 0.92% lower, the largest decline since the intervention.
- Japan's policy rate is 1.00% against a 3.50% to 3.75% American band.
- July trade data at 23:50 GMT, national inflation 24 hours later.
USD/JPY closed Wednesday 0.92% lower just above 158.00, the largest single-session decline since the early-August intervention, and Tokyo did not lift a finger for it. The Yen's best session since Tokyo last spent money defending it was delivered instead by the United States Treasury, which was not aiming at the Yen and never mentioned it. The pair ended the session sitting on its 200-day Exponential Moving Average (EMA).
The Yen trades the American long end, not Tokyo
The Treasury said it would at least double the size of its liquidity support buyback operations in longer-dated bonds, taking each operation from 2 billion Dollars to at least 4 billion, effective September 9 through November 4. The thirty-year had printed above 5.33% on August 18, its highest since June 2007, and gave back close to ten basis points inside the afternoon, with the ten-year easing toward 4.65%.
Japan's policy rate is 1.00% against a 3.50% to 3.75% band in the United States, so this pair is a spread instrument wearing a currency ticker. Intervention moves the spot rate and leaves the spread exactly where it was, which is why a record joint operation of 8.45 trillion Yen in a single session, followed by roughly 5.3 trillion more alongside the American Treasury, bought about eight big figures and surrendered close to half of them inside a fortnight. A bond notice aimed at the 20-year sector took more than a hundred pips out of the pair in two hours.
Tokyo's own long end belongs to the same problem. Japanese government bond yields have been climbing alongside American ones, so the differential that drives this pair stayed wide even while both curves sold off, and a domestic argument over swelling budget requests and how a consumption tax cut gets funded keeps that premium in place. The absence of any follow-up operation through the first half of August was all speculators needed to take back half the intervention move without a fight.
September was Tokyo's problem and Washington just eased it
The Bank of Japan (BoJ) held at 1.00% in July while warning that underlying inflation could overshoot its target, and market pricing for a September increase now sits just under 80%, up from around 65% in the first week of August. That case rests on imported inflation rather than domestic strength. Wholesale prices rose 7.2% annually in July and the Yen-based import price index rose 29.1%, which is the exchange rate arriving in the price level.
The domestic side is not carrying the argument at all. Second-quarter Gross Domestic Product (GDP) grew 1.1% annualised against a 2% consensus, weak household demand offsetting robust exports. A tightening justified by a weak currency gets harder to justify every time somebody else strengthens that currency, and Wednesday's work was done by a Washington bond desk rather than by anything said in Tokyo.
That is the loop worth holding onto through the next four weeks. Every big figure the Dollar surrenders on American fiscal news takes a slice out of the imported-inflation case that the September hike is built on, which means a Yen strengthened from the outside quietly lowers the odds of the domestic tightening that would strengthen it from the inside. A currency rescued by somebody else's balance sheet does not get to keep the rescue.
Trade tonight, national inflation tomorrow
July trade figures land at 23:50 GMT Wednesday, with the total merchandise balance forecast at a 680 billion Yen deficit against a 406.9 billion prior. Exports are seen at 19.9% annually from 19.3% and imports at 26.5% from 25.4%. Imports outrunning exports by that margin is the war's energy bill and the currency's arithmetic printed on the same line, and it is the deficit rather than the export headline that decides how the Asian session reads it.
National inflation follows at 23:30 GMT Thursday, the reading excluding fresh food forecast at 1.8% from 1.6% with the headline and core series both carrying a 1.7% prior. Both national gauges sit beneath the 2% target while wholesale prices run above 7%, and that split is what the September decision has to resolve. A firm print hardens the hike case. A soft one leaves the Yen holding a Dollar story it has no control over.
Japanese Yen levels
Resistance: 158.50 is the first line, then the session high near 159.50, with the declining 50-day E
xponential Moving Average (EMA) just beneath 160.50 capping any recovery. A daily close back above 159.50 puts the August range back in play.
Support: The 200-day EMA just beneath 158.00 is the line the session stopped on, then 157.50 and the 156.50 area, with the intervention low just above 155.00 the structural floor. Daily Stochastic Relative Strength Index (Stoch RSI) near 32 has room lower before it becomes an argument for a bounce.
Bias: Bearish beneath 159.50, objectives 157.50 then the 156.50 area, invalidation on a daily close back above 159.50.
USD/JPY daily chart
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
- GBP/USD closed 0.53% higher, the best close in three months.
- UK core inflation held at 2.6% against a 2.5% consensus.
- Retail sales and August PMIs both forecast lower on Friday.
GBP/USD closed Wednesday 0.53% higher just above 1.3600, its best close in three months, and the United Kingdom inflation report that opened the session had almost nothing to do with it. Sterling spent the London morning up barely twenty pips on the day. The entire advance arrived after midday, when a Treasury notice in New York pulled the floor out from under the Dollar.
An energy cap is not a hike case
Annual Consumer Price Index (CPI) inflation rose to 2.9% in July from 2.6%, matching consensus and marking the first increase in the headline rate since March. Core held at 2.6% against a 2.5% forecast, the only line on the page that beat. Services inflation, the series the Bank of England (BoE) actually watches, slowed to 3.4% from 3.6%.
The composition kills the hawkish reading. The move came out of a 13.5% increase in the regulated household energy cap that took effect in July, with domestic gas prices up 14.7% on the month, against transport inflation falling to 3.6% from 5.7% on cheaper diesel and food easing to 1.3%. That is an administered price working through an index rather than domestic demand pushing on it, and a committee that already held 6-3 in July has been handed no new reason to move on September 17.
None of it was a surprise to the people setting the rate. The July projection already had inflation peaking near 3.2% in the final quarter of the year on exactly this energy passthrough, which means Wednesday's rise was forecast, absorbed and priced long before it printed. Tuesday's labour market report had gone the other way and pressured Sterling, so the pair arrived into Wednesday carrying a domestic negative and left it carrying a foreign positive.
The move was made in Washington
The Treasury said on Wednesday it would at least double the size of its liquidity support buyback operations in longer-dated bonds, taking each operation from 2 billion Dollars to at least 4 billion from September 9. Long yields fell hard, the thirty-year giving back close to ten basis points from a print above 5.33% the previous day, and the Dollar was sold against every major counterpart into the American afternoon.
Sterling was not among the leaders of that move. The Swiss Franc gained close to 1.8% against the Dollar on the session and the New Zealand Dollar roughly 1%, which is what a broad unwind looks like when the seller is indifferent to what it buys instead. A three-month high built on another country's fiscal housekeeping is a Dollar position wearing a Sterling label, and it cleared the moving average band near 1.3400 that capped this pair through June and July with no domestic catalyst in it anywhere.
The mechanism is worth naming because it decides how durable the level is. An issuer announcing that it will buy back more of its own long-dated paper reduces yields by supplying a bid rather than by improving the inflation outlook, and currency markets treat those two routes to the same yield very differently. Gold ran toward $4,500 an ounce on the same news, which is not the behaviour of a market that thinks American inflation risk just fell.
Every British number left this week is forecast lower
GfK consumer confidence for August lands Thursday at 23:01 GMT with a consensus of -18 against a -17 prior. Friday opens at 06:00 GMT with July retail sales, forecast at -0.5% on the month against a 1% prior, -0.5% excluding fuel from 1.1%, and 2.2% annually against 4.2%. The annual line roughly halving is the number that matters, because it converts one soft month into a direction.
The preliminary August S&P Global Purchasing Managers Index (PMI) series follows at 08:30 GMT, composite at 51.5 from 52.2, services 51.8 from 52.1 and manufacturing 51.5 from 51.9. Every domestic release left on the week is forecast beneath its prior, which leaves the Pound at its best level since May going into a calendar consensus already expects to disappoint. The Dollar leg is the only thing holding this trade together, and it is the only leg worth watching.
Pound Sterling levels
Resistance: The session high short of 1.3650 is the first barrier, then the early-May peak just above 1.3650, with 1.3700 the level that turns this into a trend break rather than a Dollar accident.
Support: The 1.3600 handle now has to hold as the floor of the breakout, then 1.3550, with the 50-day Exponential Moving Average (EMA) near 1.3450 and the 200-day near 1.3400 far beneath. Daily Stochastic Relative Strength Index (Stoch RSI) near 90 sits deep in overbought territory and argues for consolidation before any extension.
Bias: Bullish while 1.3550 holds, objectives the early-May peak just above 1.3650 then 1.3700, invalidation on a daily close back beneath 1.3550.
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.
- NZD/USD climbs toward its highest since early June, holding north of the 0.5930 mark.
- A sharp drop in US Treasury yields after the Treasury's buyback plan has broadly weakened the US Dollar, lifting the Kiwi.
- The Reserve Bank of New Zealand's (RBNZ) hawkish lean adds support, with the July FOMC minutes read as backward-looking.
The New Zealand Dollar (NZD) rallies against the US Dollar (USD), pushing north of the 0.5930 mark. The move is driven by broad weakness in the Greenback rather than anything out of New Zealand.
The trigger was the United States (US) Treasury Department. It said it will at least double its buyback operations for longer-dated coupon securities in the 10-year to 20-year and 20-year to 30-year sectors, lifting each operation from $2 billion to at least $4 billion between September 9 and November 4. The plan aims to support liquidity and cap the recent climb in long-end yields. It worked quickly, with the US 10-year yield falling back toward 4.65% after trading above 4.70% earlier in the day.
The July Federal Open Market Committee (FOMC) minutes, released on Wednesday, did little to change the picture. The record showed policymakers still regard inflation as elevated and confirmed three officials voted for a hike, but traders treated it as backward-looking given the softer inflation and weak jobs data since the meeting. A September hold remains the base case, keeping the Dollar on the back foot.
Attention now turns to New Zealand's July trade balance on Thursday, though the bigger driver for NZD/USD remains the US side, with the path of yields and the Dollar setting the tone into the end of the week.
Short-term technical analysis:
On the 4-hour chart, NZD/USD trades at 0.5932. The pair retains a constructive near-term bias as it holds above both the 20-period Simple Moving Average (SMA) at 0.5896 and the 100-period SMA at 0.5868, suggesting underlying demand on dips. Momentum is firm, with the Relative Strength Index (RSI) hovering near 68, hinting at strong bullish pressure without yet crossing into extreme overbought territory.
On the topside, immediate resistance is seen at 0.5935, followed by a nearby cap at 0.5939; a sustained break above this cluster would open the way toward 0.5965. On the downside, initial support emerges at 0.5929, ahead of a secondary floor at 0.5922, with the 20-period SMA at 0.5896 and the 100-period SMA at 0.5868 reinforcing a broader bullish structure on any deeper pullback.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
- The Australian Unemployment Rate is forecast to hold steady at 4.4% in July.
- Australia is expected to have added 15K jobs in the month, fewer than the 76.3K gained in June.
- AUD/USD gains upward momentum ahead of the Australian employment report.
Australia will release the July monthly employment report on Thursday at 01:30 GMT. Ahead of the announcement, analysts anticipate a modest 15K increase in job creation, while the Unemployment Rate is expected to remain steady at 4.4%. The Australian Bureau of Statistics (ABS) report is also expected to show that the Participation Rate stood at 66.9% in the month following the 67% recorded in the previous month.
ABS separately reports full-time and part-time positions through the monthly Employment Change. Generally speaking, full-time jobs entail working 38 hours or more per week, usually include additional benefits, and typically provide a consistent income. On the other hand, part-time employment generally means higher hourly rates but lacks consistency and benefits. That’s why the economy prefers full-time jobs. In June, Australia added 47K part-time positions and a modest 29.3K full-time ones.
Australian unemployment rate seen steady in July
The soft anticipated figures could have a near-term negative impact on the Australian Dollar (AUD), although market attention remains elsewhere: the Middle East.
While Australian employment data can shape future Reserve Bank of Australia (RBA) monetary policy decisions, policymakers are clearly focusing on inflation. At the August meeting, the Board decided to keep the Official Cash Rate (OCR) unchanged at 4.35%, as expected.
“While the impact of the Middle East conflict on inflation has so far been less than expected, headline inflation is still too high. Trimmed mean inflation also remains elevated and is little changed from the March quarter. Oil and most related commodity prices remain higher than they were prior to the Middle East conflict,” the RBA’s August statement reads.
Inflation risks are tilted to the upside, while “labour market conditions have eased by a little more than expected in recent months. Labour market leading indicators point to only limited easing in the near term,” the statement adds, suggesting that the anticipated soft outcome will be considered encouraging by the RBA rather than a new point of concern.
Regarding the United States (US)-Iran war, there’s not much new going on, and that’s actually concerning. Both sides refrain from launching fresh attacks on the other, yet negotiations to end the conflict seem utopian at this point. Each side's demands are a line the other side will not cross. As a result, Oil prices are slowly but steadily rising, which ultimately exacerbates and confirms inflation-related concerns.
Back to the Australian employment data release, and as previously mentioned, the anticipated figures are expected to have a negative, yet temporary impact. A much better-than-anticipated outcome could spur some near-term AUD demand, yet whether the currency could sustain such gains will depend on risk-related sentiment and US Dollar (USD) weakness or strength.
When will the Australian employment report be released and how could it affect AUD/USD?
The ABS July employment report will be released early on Thursday. As previously noted, the Australian economy is expected to have added 15K new jobs in the month, while the Unemployment Rate is forecast at 4.4%. Market participants will also be attentive to the breakdown of full-time and part-time positions.
Valeria Bednarik, Chief Analyst at FXStreet, notes: “The AUD/USD pair trades around the 0.7100 mark amid broad USD weakness, not far below the August peak at 0.7129. Technically, the pair is bullish, with the daily chart showing buyers aligned around the 100-day Simple Moving Average (SMA) at around 0.7060. The 20-day SMA meanwhile advances below the longer one, signaling increased buying interest. Finally, technical indicators in the same chart remain within positive levels, although lacking clear directional strength.”
Bednarik adds: “ As long as the pair holds above the mentioned 0.7060 region, the bullish stance will remain in place regardless of intraday movements. Below the level, however, the retracement can extend towards the 0.7030 price zone before buying interest shows signs. Immediate near-term resistance is located at 0.7030, while additional gains could see AUD/USD reaching 0.7070 before some selling interest appears.”
Employment FAQs
Labor market conditions are a key element to assess the health of an economy and thus a key driver for currency valuation. High employment, or low unemployment, has positive implications for consumer spending and thus economic growth, boosting the value of the local currency. Moreover, a very tight labor market – a situation in which there is a shortage of workers to fill open positions – can also have implications on inflation levels and thus monetary policy as low labor supply and high demand leads to higher wages.
The pace at which salaries are growing in an economy is key for policymakers. High wage growth means that households have more money to spend, usually leading to price increases in consumer goods. In contrast to more volatile sources of inflation such as energy prices, wage growth is seen as a key component of underlying and persisting inflation as salary increases are unlikely to be undone. Central banks around the world pay close attention to wage growth data when deciding on monetary policy.
The weight that each central bank assigns to labor market conditions depends on its objectives. Some central banks explicitly have mandates related to the labor market beyond controlling inflation levels. The US Federal Reserve (Fed), for example, has the dual mandate of promoting maximum employment and stable prices. Meanwhile, the European Central Bank’s (ECB) sole mandate is to keep inflation under control. Still, and despite whatever mandates they have, labor market conditions are an important factor for policymakers given its significance as a gauge of the health of the economy and their direct relationship to inflation.
Economic Indicator
Unemployment Rate s.a.
The Unemployment Rate, released by the Australian Bureau of Statistics, is the number of unemployed workers divided by the total civilian labor force, expressed as a percentage. If the rate increases, it indicates a lack of expansion within the Australian labor market and a weakness within the Australian economy. A decrease in the figure is seen as bullish for the Australian Dollar (AUD), while an increase is seen as bearish.
Read more.Next release: Thu Aug 20, 2026 01:30
Frequency: Monthly
Consensus: 4.4%
Previous: 4.4%
Source: Australian Bureau of Statistics
The Australian Bureau of Statistics (ABS) publishes an overview of trends in the Australian labour market, with unemployment rate a closely watched indicator. It is released about 15 days after the month end and throws light on the overall economic conditions, as it is highly correlated to consumer spending and inflation. Despite the lagging nature of the indicator, it affects the Reserve Bank of Australia’s (RBA) interest rate decisions, in turn, moving the Australian dollar. Upbeat figure tends to be AUD positive.
- DXY closed 0.86% lower, the weakest close since mid-May.
- Long-end buyback operations at least doubled to 4 billion Dollars.
- Hawkish July minutes landed at 18:00 GMT and moved nothing.
The Dollar Index closed Wednesday 0.86% lower just beneath 98.80, its weakest close since mid-May, and it closed on the session low. The document that did the damage was not a central bank document. A Treasury notice on the government bond buyback programme, released in the middle of the London afternoon, took the currency apart against every major counterpart on the board and left the index almost a full point under its 200-day Exponential Moving Average (EMA).
The debt manager wrote the session
The Treasury said it would increase, by at least double, the size of its liquidity support buyback operations in longer-dated nominal coupons, taking each operation from 2 billion Dollars to at least 4 billion across the 10-to-20-year and 20-to-30-year sectors. The change runs from September 9 through November 4, with anything beyond that left to the November refunding. It arrived barely two weeks after the quarterly buyback schedule had been published, and it arrived in front of a 16 billion Dollar auction of 20-year paper.
Long yields did what an announced buyer makes them do. The thirty-year had printed above 5.33% on August 18, its highest since June 2007, and it gave back close to ten basis points inside the afternoon, with the ten-year easing toward 4.65%. Long yields falling on disinflation leave a currency roughly where they found it. Long yields falling because the issuer had to show up as a bidder are something else entirely, and the foreign exchange market priced the difference within minutes.
The selling was indiscriminate, which is the tell worth keeping. The Swiss Franc took close to 1.8% out of the Dollar on the session, the New Zealand Dollar roughly 1%, and the Mexican Peso ran to a two-year high. Gold climbed toward $4,500 an ounce with Silver alongside it. A currency losing ground to a funding currency, a high-yielder and a metal inside the same afternoon is not repricing a rate spread. It is repricing the issuer.
The minutes nobody traded
The record of the July 28-29 Federal Open Market Committee (FOMC) meeting arrived at 18:00 GMT and described a committee considerably more hawkish than its own vote tally. Several policymakers favoured an immediate increase against the three who actually dissented, many judged that tightening would probably become necessary if inflation failed to decline, and a few argued that moving early would spare the committee larger moves later.
The language matters more than the arithmetic here, because the account of the June meeting credited only a few participants with a hike case. The ladder has climbed a rung while the vote has not moved at all, and two regional presidents without a vote in July have since said they would have backed an increase. The hawkish bloc is wider than the vote count showed, and it is still widening.
For all of that, the currency market treated the release as a non-event. The index was already sitting at its lows when the document landed and it stayed there. Futures had already trimmed September increase odds to roughly a third from around two-thirds in the days after the meeting, and nothing in the record put them back. A committee that switched off forward guidance on purpose now competes for attention with a debt manager who has not.
The week's real tests come after the minutes
Thursday's American calendar opens at 12:30 GMT with initial jobless claims against a 210K consensus and a 209K prior, alongside the Philadelphia Fed manufacturing survey for August, where a consensus of 25 sits against a 41.4 prior. That is a forecast collapse of more than sixteen points in a regional survey, and a print anywhere near it will do more to September pricing than a three-week-old account of a meeting. A regional Fed president speaks at 15:10 GMT.
Friday brings the preliminary August S&P Global Purchasing Managers Index (PMI) series at 13:45 GMT, manufacturing at a 53.8 consensus from 53.9 and services at 54 from 54.6, with the composite prior at 54.5. Both are forecast to soften without breaking, which is the shape that keeps a September hold alive without arming a cut. Beyond that sits the Jackson Hole symposium at the end of the month, the next scheduled chance for the Federal Reserve to take the narrative back off the Treasury.
Dollar Index levels
Resistance: The 99.00 handle is the first line back, with the 200-day EMA near 99.75 above it and the 50-day EMA just above the 100.00 handle capping the recovery case. Nothing short of a reclaim of 99.75 repairs the daily structure.
Support: The session low in the 98.75 area is the immediate shelf, then 98.50 and the 98.00 handle, with the early-May base near 97.60 the only structural level beneath that. Daily Stochastic Relative Strength Index (Stoch RSI) near 16 is already inside oversold territory, which caps how far a first push can run before it pauses.
Bias: Bearish. Rallies into 99.00 and the 200-day EMA near 99.75 are for selling, objectives 98.50 then the 98.00 handle, invalidation on a daily close back above 99.75.
DXY daily chart
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
- XAG/USD surges over 5%, reclaiming the $66.50 range top.
- Bullish RSI points higher, keeping buyers in near-term control.
- Break above $67 exposes the 100-day SMA and $71.88.
Silver (XAG/USD) price reversed course on Wednesday and soared over 5% as US Treasury yields edged lower, following the US Treasury stepping in to cap long-end US bond yields, which had reached levels last seen in 2007. At the time of writing, the XAG/USD pair trades at $66.68 after bouncing off daily lows of $62.19.
XAG/USD Price Forecast: Technical Outlook
In the short term, the trend is upward, but it has entered a phase of consolidation between $62.00 and $66.50. If buyers reclaim the top of the range, this clears the path to challenge higher prices.
Momentum remains bullish, as indicated by the Relative Strength Index (RSI), with the index aiming higher toward overbought territory. Hence, Silver’s path of least resistance is upside.
XAG/USD's first resistance is the day's high at $66.74, ahead of $67.00. Above is the 100-day Simple Moving Average (SMA) at 68.57, followed by the 200-day SMA at $71.88
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.
- EUR/USD jumps as Treasury buyback plan drags US yields lower.
- Fed Minutes show policymakers ready to tighten if inflation stalls.
- ECB hike bets firm as Eurozone inflation edges higher.
The Euro (EUR) gains over 0.85% against the US Dollar (USD) during the North American session on Wednesday, even though the latest Federal Reserve (Fed) minutes had a hawkish tone, with some participants, along with the three dissenters, suggesting that raising rates could be necessary if the disinflation process stalls. The EUR/USD trades at 1.1673, near two-and-a-half-month highs.
EUR/USD climbs as lower US yields offset hawkish Fed minutes
The Federal Reserve unveiled its July meeting minutes, in which the dissenters acknowledged that inflation appears broad-based and supported a more “restrictive policy.” The minutes revealed that policymakers are worried about inflation, with many participants assessing “that policy tightening would likely be necessary if inflation did not decline.”
The FOMC minutes showed no discussion of easing policy. The new Fed Chair, Kevin Warsh, asked the Committee whether it would be better for the US central bank to host only six monetary policy meetings, which would allow two months of full data. Meanwhile, the 2026 schedule will remain unchanged.
The US Treasury buyback of long-end bonds suggests that the Treasury is worried about elevated yields. Sources cited by Bloomberg said, “The measures are essentially a method of yield curve control designed to suppress long-term rates that are deemed too elevated and at risk of derailing the economic expansion.”
The Eurozone Harmonized Index of Consumer Prices (HICP) in July rose to 2.9% from 2.8% in June, matching preliminary forecasts. Underlying inflation rose to 2.5%, up from 2.4% in June.
The data further cement the case for higher interest rates in Europe. The European Central Bank (ECB), led by Christine Lagarde, is expected to increase rates by 25 basis points at the September 10 meeting. The money market had priced in an 88% chance of a rate hike, according to Prime Terminal data.
Ahead, the US economic docket will feature Initial Jobless Claims, a speech by St. Louis Fed President Alberto Musalem and S&P Global Flash PMIs. In Europe, traders will eye Germany’s Producer Price Index (PPI), the Trade Balance and speeches by ECB members,
EUR/USD Price Forecast: Technical outlook
In the daily chart, EUR/USD trades at 1.1678. The pair holds a bullish near-term bias as price advances above the cluster of longer-term support defined by the triple simple moving average set around 1.1470 and the reclaimed trend-line break near 1.1459, suggesting underlying demand on dips. Momentum is stretched, with the 14-period Relative Strength Index at 72.8, placing the market in overbought territory and hinting that upside progress could slow despite the constructive trend backdrop.
On the topside, the next significant hurdle is the horizontal resistance line at 1.1849, which caps the immediate upside and would need to give way to extend the current rally. On the downside, initial support is seen at the 1.1678 area, followed by the former trend-line barrier at 1.1459 and the triple simple moving average cluster around 1.1470, where buyers are likely to re-emerge on a deeper corrective pullback.
(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.
Here is what you need to know on Thursday, August 20:
The US Dollar Index (DXY) sold off broadly on Wednesday, sinking below the 99.00s region and holding well under 100.00. The slide followed the United States (US) Treasury's plan to at least double the size of its liquidity support buyback operations for longer-dated coupon securities, effective September 9.
The July Federal Open Market Committee (FOMC) Minutes did little to arrest the decline. The record showed policymakers still regard inflation as elevated and confirmed three officials voted for a rate hike. But traders treated the document as backward-looking, given the softer inflation and weak jobs data released since the meeting.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.86% | -0.55% | -0.85% | -0.62% | -0.52% | -1.02% | -1.80% | |
| EUR | 0.86% | 0.30% | -0.02% | 0.25% | 0.34% | -0.17% | -0.95% | |
| GBP | 0.55% | -0.30% | -0.28% | -0.05% | 0.06% | -0.47% | -1.26% | |
| JPY | 0.85% | 0.02% | 0.28% | 0.24% | 0.32% | -0.16% | -0.98% | |
| CAD | 0.62% | -0.25% | 0.05% | -0.24% | 0.08% | -0.42% | -1.21% | |
| AUD | 0.52% | -0.34% | -0.06% | -0.32% | -0.08% | -0.51% | -1.28% | |
| NZD | 1.02% | 0.17% | 0.47% | 0.16% | 0.42% | 0.51% | -0.81% | |
| CHF | 1.80% | 0.95% | 1.26% | 0.98% | 1.21% | 1.28% | 0.81% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
EUR/USD extended its advance beyond 1.1675, reaching its highest level since late May as the Dollar broadly retreated.
GBP/USD climbed past the 1.3600 mark to a three-month peak, with firm United Kingdom (UK) inflation adding to the pressure on the Greenback.
USD/JPY faded toward the 158.00 region as US yields fell and the Dollar lost ground.
AUD/USD pushed up toward the mid-0.7100s, holding its gains ahead of Thursday's Australian employment report.
Gold soared toward $4,500 per troy ounce with Silver also sharply higher, both lifted by tumbling yields.
West Texas Intermediate (WTI) Oil held steady near $84.00 per barrel.
The People's Bank of China (PBoC) announces its interest rate decision, with no change expected. The standout release is Australia's July employment report, where analysts look for a modest 15K rise in jobs and the Unemployment Rate to hold at 4.4%, a key input for the Reserve Bank of Australia (RBA). Germany publishes its Producer Price Index (PPI) for July, followed by the Bundesbank monthly report.
In the US session, the focus falls on the weekly Initial Jobless Claims and the Philadelphia Fed Manufacturing Survey for August, which is expected to cool sharply from the prior reading. The Fed's Alberto Musalem also speaks, offering a fresh read on the policy debate after the minutes.
Late in the day, the UK releases GfK Consumer Confidence for August before attention turns back to Japan's inflation figures and the Asian open.
- Silver (XAG/USD) jumps near $65.80, riding a broad precious-metals rally.
- The US Treasury's plan to double long-dated debt buybacks has knocked the US Dollar and long-end Treasury yields lower.
- July FOMC Minutes shows officials still see inflation as elevated.
Silver (XAG/USD) trades sharply higher on Wednesday, changing hands near $65.80. The metal is riding a broad rally across precious metals with Gold (XAU/USD) soaring toward $4,500.
The trigger was the United States (US) Department of the Treasury, which said it will increase, by at least double, the size of its liquidity support buyback operations for longer-dated coupon securities, effective September 9. The plan aims to rein in the recent surge in long-end yields, and it did just that.
The other set-piece of the session was the release of the July Federal Open Market Committee (FOMC) Minutes. The record showed policymakers still regard inflation as elevated, with the labor market stable and the economy expanding. It also confirmed the divergence at the meeting, where three officials, regional Fed Presidents Lorie Logan, Beth Hammack and Neel Kashkari, voted for a rate hike.
Even so, the Minutes did little to shift the mood. Traders treated them as backward-looking, since the debate they captured took place before softer July inflation data and a weak jobs report that showed a 23K fall in payrolls. Markets now price in only a 34% chance of a September rate hike, down from around 60% three weeks ago, with a hold the clear base case. That softer rate path keeps the backdrop friendly for metals.
Short-term technical analysis:
On the 4-hour chart, XAG/USD trades at $65.77, maintaining a bullish near-term bias as it holds above both the 20-period Simple Moving Average (SMA) at $64.84 and the 100-period SMA at $62.16. The configuration of these underlying averages suggests the uptrend remains supported, while the Relative Strength Index (RSI) near 58 stays in positive territory without reaching overbought conditions, hinting that bullish momentum is constructive but not stretched.
On the topside, immediate resistance appears at the horizontal barrier at $65.92, where a break would open the way for a continuation of the advance. On the downside, initial support is seen at $65.29, ahead of the 20-period SMA at $64.84, with deeper demand zones at $63.83 and $63.54, followed by the 100-period SMA near $62.16, which reinforces the broader bullish structure as long as it holds.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
- USD/CHF breaks below the 50-day SMA after Treasury buyback shock.
- RSI drop signals sellers are gaining near-term momentum.
- Break below 0.7975 exposes 0.7932 and 0.7900 next.
The USD/CHF pair tumbles nearly 2% on Wednesday as a US Treasury buyback announcement sends the Greenback into a tailspin, while US Treasury yields also dive. The pair trades at 0.7979 after reaching a high of 0.8128.
USD/CHF Price Forecast: Technical Outlook
From a technical perspective, USD/CHF is upward-biased after it bottomed at 0.7604 in late January 2026. Since then, the pair has rallied towards a yearly high above 0.8200, before the US Treasury unveiled its bond buyback. This pushed USD/CHF below key support levels, including the 50-day Simple Moving Average (SMA) at 0.8084, and towards the 100-day SMA at 0.7975.
In the short term, momentum shifted bearish as the Relative Strength Index (RSI) fell from around 51 to 36.48. This suggests that sellers are gaining steam.
For a bearish continuation, USD/CHF must clear the 100-day SMA, followed by the 200-day SMA, at 0.7932. On further weakness, the next stop is 0.7900.
On the flip side, buyers must reclaim the 0.8000 level before challenging the March 31 high of 0.8042. Above lies the 50-day SMA at 0.8084, followed by the August 13 high of 0.8147.
USD/CHF Price Chart – Daily
Swiss Franc FAQs
The Swiss Franc (CHF) is Switzerland’s official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country’s economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc’s value, causing a turmoil in markets. Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone.
The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country’s currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in.
The Swiss National Bank (SNB) meets four times a year – once every quarter, less than other major central banks – to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.
Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc’s (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank’s currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate.
As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland’s main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.
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