Forex News
Societe Generale notes the Korean Won has been one of Asia’s standout performers, with USD/KRW slipping from around 1,390 to 1,360 as local exporters sold Dollars ahead of the Chuseok holiday. The bank highlights a supportive backdrop, citing South Korea’s strong export engine and a sharp early-September surge in exports, driven by AI-related shipments alongside faster import growth.
Won benefits from robust exports
"The KRW remained one of the region’s standout performers, although the week was far from smooth."
"USD/KRW started the week around 1,390 and retreat to 1,360 this morning as local exporters sold dollars ahead of Chuseok holiday."
"The broader backdrop remains supportive, with South Korea’s export engine continuing to fire on all cylinders."
"Early-September exports surged 78.3% yoy, led by AI-related shipments, while imports accelerated 26.7%."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
UOB’s Quek Ser Leang and Lee Sue Ann describe USD/CNH as consolidating after a move to 6.7200, with momentum slowing in the very near term. For the coming days and weeks, they see the pair likely trading between 6.7120 and 6.7220, while a rapid build-up in momentum suggests potential gains toward 6.7250 and major resistance at 6.7330. Longer term, they expect gradual downside while below 6.7815.
Range trade with upside potential
"24-HOUR VIEW: USD rose to 6.7200 yesterday before closing little changed at 6.7168 (+0.08%). Upward momentum appears to be slowing, but it is too early to expect a sustained pullback. Today, USD is more likely to consolidate at these higher levels, probably between 6.7120 and 6.7220."
"1-3 WEEKS VIEW: We turned neutral on USD two days ago (23 Sep, spot at 6.6965), and we expected it “to consolidate between 6.6900 and 6.7080.” We did not expect USD to break above 6.7080 as it rose to a high of 6.7200 yesterday. The rapid build-up in momentum suggests USD could rise to 6.7250, potentially reaching the major resistance at 6.7330."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- Thirty-year yield touches 22-year high as long-end pressure builds.
- Fed hawks lift year-end tightening odds after September rate increase.
- Rising inflation expectations keep 10-year yield anchored near 5.20%.
US Treasury yields turned mixed on Friday as the long-end of the curve, the 20s and 30s, posted gains while the short-end and the belly of the yield curve retreated from multi-year high levels. The US 10-year Treasury yield holds firm at 5.20% after peaking at a 19-year high of 5.228%.
Long-end yields climb while Fed tightening bets keep 10-year near 5.20%
During the session, the 30-year bond yield rose to its highest level in 22 years. Hawkish commentary from Federal Reserve (Fed) officials and last week's 25-basis-point rate hike were the two main catalysts that pushed US Treasury yields higher during the week.
The sudden shift from known doves, New York Fed John Williams (voter) and Philadelphia Fed Anna Paulson (voter in 2026), has increased the hawkish tilt on the FOMC board. Also, Fed Governor Michael Barr, acknowledging the need for further rate hikes on Wednesday, has almost cemented the case for a 25-basis-point rate hike towards the end of the year.
Money markets see a 64% chance of a Fed rate hike at the October 28 meeting, according to Prime Terminal. For the December meeting, the chances are higher at 92%.
Worldwide yields remain underpinned by high Oil prices as the US-Iran war continues, keeping inflationary pressures elevated.
Data-wise, US Consumer Sentiment deteriorated, with households seeing a leg up in inflation for one year from 4% to 4.6% and for a five-year period from 3.3% to 3.4%. Earlier, core capital goods increased 1.6% in August, boosted by the investment boom in AI.
The yield on the 30-year bond was last unchanged at 5.488%, after peaking at 5.5016%, the highest level since June 2004.
US 10-year Treasury yield chart
Interest rates FAQs
Interest rates are charged by financial institutions on loans to borrowers and are paid as interest to savers and depositors. They are influenced by base lending rates, which are set by central banks in response to changes in the economy. Central banks normally have a mandate to ensure price stability, which in most cases means targeting a core inflation rate of around 2%. If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation.
Higher interest rates generally help strengthen a country’s currency as they make it a more attractive place for global investors to park their money.
Higher interest rates overall weigh on the price of Gold because they increase the opportunity cost of holding Gold instead of investing in an interest-bearing asset or placing cash in the bank. If interest rates are high that usually pushes up the price of the US Dollar (USD), and since Gold is priced in Dollars, this has the effect of lowering the price of Gold.
The Fed funds rate is the overnight rate at which US banks lend to each other. It is the oft-quoted headline rate set by the Federal Reserve at its FOMC meetings. It is set as a range, for example 4.75%-5.00%, though the upper limit (in that case 5.00%) is the quoted figure. Market expectations for future Fed funds rate are tracked by the CME FedWatch tool, which shapes how many financial markets behave in anticipation of future Federal Reserve monetary policy decisions.
ING’s Asia-Pacific research notes that South Korea’s upcoming data should show stronger industrial production and a widening trade surplus, even as export and import growth moderates. Technology and semiconductor exports are expected to underpin the surplus. At the same time, headline CPI is forecast to ease slightly, with core inflation decelerating more sharply, pointing to reduced underlying price pressures.
Stronger output with softer inflation
"South Korea releases August industrial production data on Wednesday. Market consensus expects industrial production growth to accelerate to 4.5% YoY, from 3.6% in July. Monthly output is forecast to rise 0.5%."
"September trade data, out Thursday, is expected to show a moderation in both export and import growth to 61.2% YoY and 20.7% YoY, respectively."
"Despite slower growth, the trade surplus is forecast to widen to $38.4bn, supported by continued strength in technology and semiconductor exports."
"Headline CPI inflation is expected to ease to 3.0% YoY in September, from 3.1% in August. Core inflation is forecast to slow more sharply to 2.8% YoY, from 3.4%."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Societe Generale describes a limited impact from President Xi’s US visit, with no new tariff cuts or AI dialogue mechanism agreed as the trade truce was only extended to January. USD/CNY rebounded after briefly dipping below 6.70, helped by higher US Treasury yields and a modest easing of PBoC control, while the central bank reiterated a moderately loose stance and commitment to Yuan stability.
Policy support and controlled flexibility
"China and US extend trade truce until January, but no major new outcomes emerged from President Xi's visit - even the much-anticipated agreements on additional tariff cuts and an AI dialogue mechanism failed to materialize."
"USD/CNY bounced back after a brief move below 6.70 as higher Treasury yields combined with a modest easing of the PBoC’s grip on the currency."
"The PBoC reiterated its commitment to a moderately loose monetary stance, pledged to keep the yuan broadly stable and signalled a willingness to adjust policy tools as required. Chinese banks left both the 1y and 5y loan prime rates unchanged at 3.0% and 3.50%, respectively."
"Liquidity support was stepped up, with the PBoC raising the daily reverse repo cap to CNY1tn and injecting a net CNY200bn through MLF operations."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Cleveland Federal Reserve (Fed) President Beth Hammack said on Friday the two sides of the Fed's dual mandate are not in conflict. She said that “high inflation complicates economic planning,” and that she doesn’t see current policy as restraining the economy.
Hammack added that inflation expectations are “well anchored.”
Key highlights:
There are lots of long-term questions on what AI will mean for inflation
Sides of Fed mandates are generally not in conflict
Persistently high inflation has 'real costs', pressures wages
High inflation complicates economic planning
Fed policy is not restraining activity outside of housing
Don't see current policy as restraining the economy
Rising bond yields driven by a number of factors
Good economic outlook is pressuring up bond yields
Some of what the bond market is doing is in reaction to the Fed and government policy
AI investment demand is competing for investors in the bond market
Inflation expectations are reasonably well anchored
The US is on an unsustainable fiscal path
I am mindful of financial conditions, but the Fed is the decision maker on monetary policy
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 Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.16% | -0.23% | -1.08% | 0.05% | -0.24% | -0.07% | 0.05% | |
| EUR | 0.16% | -0.07% | -0.91% | 0.22% | -0.08% | 0.07% | 0.20% | |
| GBP | 0.23% | 0.07% | -0.83% | 0.28% | -0.01% | 0.15% | 0.27% | |
| JPY | 1.08% | 0.91% | 0.83% | 1.16% | 0.85% | 1.01% | 1.14% | |
| CAD | -0.05% | -0.22% | -0.28% | -1.16% | -0.30% | -0.14% | -0.02% | |
| AUD | 0.24% | 0.08% | 0.01% | -0.85% | 0.30% | 0.16% | 0.29% | |
| NZD | 0.07% | -0.07% | -0.15% | -1.01% | 0.14% | -0.16% | 0.14% | |
| CHF | -0.05% | -0.20% | -0.27% | -1.14% | 0.02% | -0.29% | -0.14% |
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).
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named 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 during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
UOB’s Quek Ser Leang and Lee Sue Ann note USD/SGD held steady around 1.2800 after Wednesday’s surge, with the Singapore Dollar (SGD) supported by expectations of further MAS tightening. Their Singapore Dollar (SGD) Nominal Effective Exchange Rate (NEER) model sits 1.76% above the mid-point, implying a USD/SGD range of 1.2764–1.2828 today, while renewed Dollar momentum keeps focus on resistance at 1.2835.
Dollar holds firm against Singapore Dollar
"24-HOUR VIEW: Following the strong surge on Wednesday, USD consolidated between 1.2788 and 1.2811 yesterday, closing unchanged at 1.2800. USD is likely to continue to consolidate today, probably between 1.2780 and 1.2815."
"1-3 WEEKS VIEW: We turned positive on USD two weeks ago. In our most recent narrative from two days ago (23 Sep, spot at 1.2750), we noted that “upward momentum is starting to ease, and a break below 1.2725 (‘strong support’ level) would indicate that the advance in USD has stalled.” USD subsequently surged to a high of 1.2813. The renewed upward momentum suggests USD could test the significant resistance level at 1.2835 (we highlighted this level on 17 Sep, as well as in the 1-3 months view below). On the downside, the ‘strong support’ level is now at 1.2770."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
European Central Bank (ECB) Vice President Boris Vujcic said on Friday that the ECB started a tightening cycle and sees a “risk of higher for longer energy prices." He added that diesel prices will stay high for a long time, feeding into inflation.
Key highlights:
We have started a tightening cycle
See risk of higher for longer energy prices
It seems the price of crude will come down but not that of refined products
Diesel prices will stay for long, feeding into inflation
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.14% | -0.23% | -1.05% | 0.07% | -0.24% | -0.06% | 0.07% | |
| EUR | 0.14% | -0.09% | -0.90% | 0.21% | -0.10% | 0.06% | 0.20% | |
| GBP | 0.23% | 0.09% | -0.81% | 0.30% | -0.02% | 0.16% | 0.29% | |
| JPY | 1.05% | 0.90% | 0.81% | 1.14% | 0.81% | 0.98% | 1.13% | |
| CAD | -0.07% | -0.21% | -0.30% | -1.14% | -0.32% | -0.15% | -0.02% | |
| AUD | 0.24% | 0.10% | 0.02% | -0.81% | 0.32% | 0.18% | 0.31% | |
| NZD | 0.06% | -0.06% | -0.16% | -0.98% | 0.15% | -0.18% | 0.15% | |
| CHF | -0.07% | -0.20% | -0.29% | -1.13% | 0.02% | -0.31% | -0.15% |
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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
ECB FAQs
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger 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.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
OCBC strategists Sim Moh Siong and Christopher Wong report that Asian FX traded broadly softer as higher Oil prices and rising US Treasury yields hurt risk sentiment, with Indonesian Rupiah (IDR) underperforming and Philippine Peso (PHP), Indian Rupee (INR) and Thai Baht (THB) also weaker. Renminbi (RMB) momentum faded as People's Bank of China's (PBoC) stronger fix trend stalled, while holiday closures in China, South Korea and Taiwan are expected to thin liquidity and potentially increase volatility.
Regional currencies under pressure
"Asian FX traded broadly softer as higher oil prices and US Treasury yields weighed on risk sentiment. IDR underperformed, while PHP, INR and THB also weakened."
"A firmer USD added to the pressure, while RMB gains lost momentum after the recent strengthening trend in the PBoC fix was halted. On the other hand, USD/SGD held steady but near recent highs."
"Market liquidity is expected to drop to razor-thin today, with China, South Korea and Taiwan closed for the Mid-Autumn/Chuseok holidays. And next week, China golden-week holidays start on Thu."
"Near term, elevated oil prices and US Treasury yields may continue to weigh on Asian FX, in differentiated magnitude while thinner liquidity could see moves turn choppier into the weekend."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The Cleveland Federal Reserve (Fed) President Beth Hammack said on Friday that “the biggest risk with inflation is the formation of an inflationary mindset”, in a panel discussion hosted by the Cleveland Fed, with Vujcic, the Vice President of the European Central Bank (ECB), and Bank of Mexico's (Banxico) Deputy Governor Jonathan Heath.
Hammack reiterated that the Fed needs to make progress in lowering inflation and that it is important to have restrictive policy rates.
Key highlights:
The biggest risk with inflation is the formation of an inflationary mindset
The public has been dealing with above-target inflation for an extended period
Growth has held up well, the job market is stable.
Worried about demand-related pressure on inflation
Capital expenditures will pressure inflation for a while
If we don't make progress lowering inflation, expectations could shift.
Consumer spending and CAPEX are sources of pressure
Important to have restrictive policy rates
The Fed needs to make sure policy is at a restrictive stance to lower inflation
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 Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.10% | -0.19% | -0.99% | 0.10% | -0.21% | -0.01% | 0.15% | |
| EUR | 0.10% | -0.09% | -0.88% | 0.21% | -0.08% | 0.11% | 0.24% | |
| GBP | 0.19% | 0.09% | -0.79% | 0.30% | -0.01% | 0.17% | 0.32% | |
| JPY | 0.99% | 0.88% | 0.79% | 1.11% | 0.78% | 0.97% | 1.14% | |
| CAD | -0.10% | -0.21% | -0.30% | -1.11% | -0.33% | -0.13% | 0.02% | |
| AUD | 0.21% | 0.08% | 0.00% | -0.78% | 0.33% | 0.20% | 0.35% | |
| NZD | 0.01% | -0.11% | -0.17% | -0.97% | 0.13% | -0.20% | 0.17% | |
| CHF | -0.15% | -0.24% | -0.32% | -1.14% | -0.02% | -0.35% | -0.17% |
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).
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named 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 during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
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