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Christopher Wong at OCBC Bank notes that USD/KRW continues to trade heavy as exporter US Dollar (USD) selling and a softer external backdrop support the Korean Won (KRW), even as foreign equity outflows cap gains. The pair is around 1339, with risks skewed lower towards supports at 1333 and 1320, while resistance is seen at 1350 and 1357, making upcoming technology earnings crucial for sentiment.

Exporter flows and softer backdrop

"USD/KRW continued to trade heavy. Market chatters of exporter dollar selling provided some support, while importer demand and continued foreign equity outflows partially capped the currency’s gains. Foreign investors sold around USD1.2bn of Korean equities."

"On the policy front, Finance Minister Lee Hyoung-il said the government would work actively to stabilise the FX market amid uncertainty stemming from the Middle East conflict and monetary policy in major economies. He also reiterated plans to push ahead with the internationalisation of the won and lower barriers to foreign investment."

"The external backdrop has turned somewhat more supportive overnight, with the USD, US Treasury yields and oil easing. Near term, this could allow USD/KRW to extend lower, particularly if exporter dollar supply persists."

"However, continued foreign equity outflows remain a constraint, with upcoming technology earnings an important test of foreign investor sentiment."

"Pair was last at 1339 levels. Bullish momentum on daily chart faded while RSI fell. Risks skewed to the downside. Next support at 1333 (2026 low), 1320 levels. Resistance at 1350, 1357 (21 DMA)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• Gold falls 1.16% but recovers after briefly breaking $4,100.
• Fed Minutes show officials expect another rate hike this year.
• China extends Gold buying streak to 23 consecutive months.

Gold (XAU/USD) price pressures on the downside on Wednesday, yet it has reclaimed the $4,100 mark as US Treasury yields erased some of its earlier gains and turned negative. Meanwhile, the minutes of the latest meeting of the Federal Open Market Committee (FOMC) showed that all members supported September’s rate hike. At the time of writing, XAU/USD trades at $4,115, down 1.16%, after hitting a two-month low of $4,066 earlier in the day.

XAU/USD steadies as traders weigh further Fed tightening against softer Oil prices

The FOMC’s Minutes revealed that officials are divided on whether to raise rates as a precautionary move, while others see the move as the beginning of a tightening cycle aimed at curbing investment and spending to push prices lower.

The minutes revealed that “many participants” see the move as a means of “providing insurance against inflation remaining persistently above target.” Other members saw the decision as a measure to prevent inflation from broadening to other prices, while “a couple” said that the rate increase was intended to match a higher-than-expected neutral interest rate. Worth noting that Fed members expect another rate hike as "appropriate by year's end,” the minutes showed.

So far, money markets have priced out a potential rate hike at this month's meeting, with odds at 19%, while the chances of a hold are 80%, according to Prime Terminal.

After the release of the minutes, the yellow metal barely flicked. However, the US 10-year Treasury note yield is down one basis point to 5.27%, after hitting a 24-year high of 5.365%. At the time of writing, the US Dollar Index (DXY), which measures the performance of the Greenback against its peers, is up 0.40% at 102.24.

On Tuesday, two Fed officials crossed the wires. Kansas City Fed Jeffrey Schmid said that additional rate increases would be needed to curb high inflation, while San Francisco Fed Mary Dalysaid further adjustments to interest rates would be data-dependent and subject to external shocks, easing.

Despite this, Gold could recover in the near term as China’s central bank continued its purchases of the yellow metal for the 23rd straight month.

The drop in Oil prices, with West Texas Intermediate (WTI) aiming down 1.66% at $88.45, capped Bullion’s fall below $4,100, opening the door for a recovery.

Ahead, the US economic docket will feature the release of Initial Jobless Claims on Thursday, followed on Friday by the University of Michigan's Consumer Confidence report.

XAU/USD technical analysis: Gold remains bearish, but supported near $4,100

Gold’s downtrend faced key support at $4,100, and so far, sellers have been unable to decisively push prices lower, towards the $4,000 mark. Despite this, the overall trend suggests further XAU/USD weakness in the near term, with price action respecting the structure of lower highs and lower lows, while momentum remains negative, as indicated by the Relative Strength Index (RSI).

For a recovery, Gold must clear the $4,200 mark, ahead of a challenge to key ceiling levels at the 100- and 50-day Simple Moving Averages (SMAs), each at $4,267 and $4,331, respectively.

Conversely, the path of least resistance is for Bullion to fall below $4,100, test the July 29 swing low of $3,996, and then challenge the year-to-date (YTD) low of $3,941.

Commerzbank economists note Thailand’s September CPI rose 2.8% year-on-year, below consensus but the highest since April, bringing headline inflation close to the upper end of the Bank of Thailand’s target range. They expect headline inflation to rise further on persistent supply-side pressures, yet see demand-side forces as benign. USD/THB fell to 33.62, though downside risks to the Baht remain elevated.

BoT seen on extended hold

"September CPI inflation surprised to the downside, rising 2.8% yoy (Bloomberg consensus: 3.1%) vs 2.5% in August, driven mainly by higher energy and food prices. The Commerce Ministry lowered its 2026 inflation forecast to 1.8-2.2% from 1.5-2.5% initially as year-to-date inflation averaged around 1.5%. Nonetheless, the September data was the highest inflation reading since April and the headline inflation is approaching the upper end of the Bank of Thailand’s (BoT) target range of 1-3%."

"Looking ahead, headline inflation is likely to rise further in the final months of the year. The myriad of supply-side pressures are expected to persist. Fuel prices should remain elevated due to continued energy supply chain disruptions while food prices should rise from crop damage amid recent flooding. Nonetheless, high household debt and elevated cost of living limits the purchasing power of Thai consumers, suggesting that demand-side pressures should remain benign in the months ahead."

"The September data do little to alter the BoT’s policy outlook: the rise in headline inflation remains largely supply-driven, while core inflation and medium-term inflation expectations remain well-behaved. This reinforces our view that the BoT is likely to keep the policy rate at 1.00% for an extended period rather than respond to a temporary supply-driven rise in headline inflation."

"In FX, USD/THB fell 0.2% to 33.62 yesterday amid easing oil prices and a softer USD. However, downside risks to THB remain elevated. The yield spread between the 10Y US Treasury and 10Y Thai government bond widened to 291bps, the largest in a year, reducing the attractiveness of THB-denominated assets."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

All participants at the Federal Reserve's (Fed) September 15–16 meeting supported the 25-basis-point rate increase, while most judged that another hike would probably be appropriate by the end of the year. The Minutes show policymakers increasingly focused on upside inflation risks, a resilient economy and the possibility that strong AI investment could add to demand pressures.

Participants generally agreed that inflation remained elevated, while the labour market was close to full employment. Almost all saw inflation risks tilted to the upside, with some saying those risks had become more pronounced recently. Job-market risks were viewed as broadly balanced, giving the Fed greater scope to concentrate on restoring price stability.

Several officials warned that the AI buildout could eventually push aggregate demand ahead of supply, creating additional upward pressure on prices. The staff’s economic outlook was also stronger than in July, reinforcing the view that the economy could withstand further policy tightening. Against that backdrop, most participants considered another rate increase by year-end likely to be appropriate.

Financial conditions were also judged to remain supportive of growth despite the recent rise in long-term Treasury yields. A few participants said the Treasury market was functioning smoothly, while they stressed the importance of preparing for episodes of market stress.

Overall, the minutes reinforce a hawkish policy bias: the September hike was supported unanimously, and further tightening remained the most likely path if inflation fails to moderate.

Market reaction

The Greenback remains well bid on Wednesday, motivating the US Dollar Index (DXY) to keep its trade above the 102.00 yardstick as investors continue to assess the latest release of the FOMC Minutes.

This section below was published as a preview of the FOMC Minutes of the September 16-17 meeting at 16:30 GMT.

• The Fed Minutes are expected to shed some light on the extent and the timing of the monetary tightening cycle.
• Lower-than-expected price pressure and disappointing employment data have curbed hopes of back-to-back rate hikes.
• Futures market prices in a 20% chance of a rate hike in October and an 80% chance of at least one hike before year-end.

The United States (US) Federal Reserve (Fed) will release the Minutes of September’s Federal Open Market Committee (FOMC) meeting on Wednesday. Investors are eager for some details that shed light on the extent and the timing of the central bank´s tightening cycle after approving the first interest rate hike in three years in September.

The FOMC met expectations and raised the fed funds rate by 25 basis points to the 3.75%-4.00% range in September in a unanimous decision. Chair Kevin Warsh surprised with unequivocally hawkish rhetoric, considering his natural reluctance to give excessive forward guidance. This reaffirmed investors’ confidence in the bank’s independence and sent the US Dollar rallying across the board. 

Warsh stated that inflation has been “too high for too long” in the press conference following the decision. The monetary policy statement endorsed that view and reaffirmed the committee’s commitment to deliver price stability and pursue a monetary policy to “support a timelier return to the Committee’s 2% target.”

The statement also highlighted the strength of the US labour market, which boosted expectations of back-to-back rate hikes. Data released last week, however, has tempered those hopes, and investors will be analysing the Minutes to confirm a rate hike in December after practically discarding a tightening move later this month.

Inflation and labour data have dampened hopes of an October rate hike

US Personal Consumption Expenditures (PCE) Prices Index revealed that inflation remained steady in August, providing some leeway for the bank to take some time to better assess the impact of September’s rate hike before tightening monetary policy further. Beyond that, September’s Nonfarm Payrolls data has raised some doubts about the strength of the labour market altogether, strengthening the case for a pause at the next meeting. 

Economic activity, however, remains solid. The US ISM Services Purchasing Managers' Index (PMI) Index slowed down but remains at levels consistent with a strong expansion of business activity, reflecting strong demand and an improvement in employment. Data by GDPNow estimates that the US economy accelerated to 3.7% annual growth in the third quarter from the 2.2% increase seen in the previous quarter, providing an ideal scenario for a tightening cycle.

The question, thus, is on the timing, especially after mixed messages by Fed officials. Chicago Fed President Austan Goolsbee affirmed last week that inflation outweighs labour market concerns at this moment, and Dallas Fed President Lorie Logan stated that more rate hikes will be needed to bring inflation to target. The central bank’s Vice Chair for Supervision, Michelle Bowman, on the other hand, said that there is not an urgent need for further rate hikes this year, and New York Fed President John Williams supported that idea.

Analysts at ING describe the latest data as slightly hawkish “but not enough to materially alter the Fed narrative.” In their view, “markets are likely to remain comfortable with an October hold provided September core CPI (released on 14 October) prints at 0.2% MoM, which is where consensus is converging.” ING reiterates that “a hike in December remains the base case,” keeping risks for the Dollar (USD) skewed to the upside.

When will FOMC Minutes be released, and how could they affect the US Dollar?

The FOMC will release the Minutes of its September 15-16 monetary policy meeting on Wednesday at 18:00 GMT.

The bank hiked interest rates by a quarter point and hinted at further rate hikes ahead, but recent data has dampened hopes of back-to-back rate hikes. Data from the CME’s FedWatch Tool shows a 78% chance that the bank will leave rates unchanged later this month, up from 50% last week. Hopes of some hike before the year-end, however, remain practically unchanged around an 85% chance.

Fed tightening hopes, combined with the US economic exceptionalism, concerns about high Oil prices that are weighing on most of the US Dollar’s rival currencies and, above all, a bond rout that has put the focus on the Euro Area, have propelled the US Dollar since early September. The US Dollar Index (DXY), which measures the value of the US Dollar against six majors, has rallied about 3.4% over the last four weeks to hit 18-month highs at 102.50.

Within this framework, the market expects the September Minutes to confirm that inflation remains front and center in the bank’s monetary policy plans, which would add to the case for a December hike. 

The impact on the US Dollar, however, is likely to be limited as the report predates last week’s Personal Consumption Expenditures (Prices Index) and Nonfarm Payrolls reports. In that sense, next week’s US Consumer Price Index (CPI) and Producer Price Index (PPI) releases might have a higher impact, as they may set the outcome of the next meeting.

The daily chart shows the US Dollar Index (DXY) in a steady upward channel from early September lows, although the overbought Relative Strength Index (RSI) suggests that a consolidation or even some pullback should be considered. The Moving Average Convergence Divergence (MACD) remains at positive levels, which suggests that dips are likely to find buyers.

DXY bulls have met resistance at the 127.7% Fibonacci retracement of the July-August bearish cycle in the 102.50 area. Further up, a previous support-turned-resistance at the 103.20 area (March 2025 lows) is likely to offer some resistance ahead of the 161.8% Fibonacci resistance of the mentioned cycle, at the 103.60 area.

Downside attempts so far are contained above previous year-to-date highs near the 101.80 area. A bearish reaction below that level would bring the September 25 low, at the 100.90 area, into focus, ahead of the psychological 100 level.

The US Dollar (USD) has resumed its uptrend, advancing to two-day highs while rapidly forgetting Tuesday’s hiccup. The extra gains in the Greenback have come in tandem with the equally decent advance in US Treasury yields on the belly and long end of the curve.

Here is what you need to know on Thursday, October 8:

The US Dollar Index (DXY) has regained pace vs. its major peers, advancing to levels just shy of recent multi-month peaks well north of the 102.00 hurdle. The usual weekly Initial Jobless Claims are expected alongside Wholesale Inventories. In addition, the Fed’s Waller and Musalem are due to speak.

EUR/USD has retreated markedly, approaching the area of recent 17-month lows south of 1.1200. Balance of Trade results are next on the domestic calendar, along with the ECB’s Accounts and speech by ECB’s Lane.

GBP/USD was no exception on Wednesday, rapidly leaving behind Tuesday’s strong advance and refocusing on the downside at levels below 1.3200. The RICS House Price Balance and the BoE’s Credit Conditions Survey will be released across the Channel. Additionally, the BoE’s Greene and Baileys are expected to speak.

USD/JPY alternated gains and losses around the 158.00 region, further extending its multi-day consolidative mood. Current Account results will come next, ahead of the Eco Watchers Survey and the weekly Foreign Bond Investment data.

AUD/USD has come under fresh downside pressure, setting aside three daily advances in a row and retreating toward the low 0.6900s. The Melbourne Institute will publish its Consumer Inflation Expectations for the current month.

Front-month WTI futures have faded Tuesday’s small uptick, receding to the area below the $89.00 mark per barrel amid the drop in weekly US stockpiles and rising gasoline inventories, while concerns in the Middle East kept simmering.

Gold has tumbled to two-month lows, trading closer to the key $4,000 mark per troy ounce on the back of the strong climb in the US Dollar and the steady advance in US Treasury yields, particularly the 10y-30y segment of the curve.

Societe Generale strategist Michelle Lam analyzes recent Chinese policy moves, noting that new property and monetary easing should keep growth on track and help China meet its Gross Domestic Product (GDP) target at the lower end of the range. She highlights limited impact from mortgage subsidies, constrained infrastructure spending due to local government finances, and a K-shaped recovery driven by technology and manufacturing rather than household demand.

Incremental easing and structural limits

"In response to the activity slowdown, the Chinese government finally rolled out a fresh round of targeted property and monetary easing measures to stabilize growth last week. While these measures should be sufficient to keep growth on track and help China meet this year's GDP target, they fall well short of addressing the economy's deeper structural demand weaknesses."

"These measures should lead to a recovery in FAI on the coming months. But the weakness in fixed-asset investment this year highlights a growing disconnect between the central government's desire to support growth through infrastructure spending and the hard reality of increasingly binding budget constraints at the local government level."

"With these measures and the State Council recently reiterating the need to "work hard to achieve this year's development targets", we expect China to meet its GDP target at the lower end of the range, at 4.5%. Such targeted measures also mean the urgency for the PBoC to cut rates has much fallen, especially in light of Fed rate hikes."

"Growth has been driven primarily by technology investment and manufacturing upgrades, while household demand continues to lag. Until policymakers shift more forcefully toward demand-side measures that directly support households, the economy is likely to remain stuck in structural malaise."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• WTI turns lower as a stronger US Dollar and recovering Middle East exports outweigh supply concerns.
• US crude inventories unexpectedly fall by 3.186 million barrels, reversing the previous week’s increase.
• Tanker attacks and stalled US-Iran negotiations keep risks around the Strait of Hormuz elevated.

West Texas Intermediate (WTI) Oil trades lower on Wednesday, giving up earlier gains as a stronger US Dollar (USD) and recovering Middle East exports offset support from an unexpected decline in US crude inventories. At the time of writing, WTI trades around $87.65 per barrel after briefly rising above $90.00 earlier in the day.

Data from the US Energy Information Administration (EIA) showed that crude inventories fell by 3.186 million barrels in the week ending October 2, compared with expectations for a 1.9 million-barrel increase. The latest reading also reversed the previous week’s build of 922,000 barrels.

Supply risks remain elevated in the Middle East, even as regional crude exports show signs of improvement. The recovery has been led by Saudi Arabia following the restart of its East-West pipeline, which allows crude to reach the Red Sea without passing through the Strait of Hormuz.

Reuters reported that maritime security sources recorded at least 12 attacks or other incidents involving tankers between September 28 and October 5. Iran said on Wednesday that the Strait would remain closed until its demands are met and warned that it would soon block what it described as “illegal” shipping routes.

Meanwhile, efforts to end the US-Iran conflict remain deadlocked. US Vice President JD Vance told Reuters that Iran must make a “meaningful” reduction in its nuclear enrichment capacity to end the war. A senior Iranian official said Tehran would not give up its right to enrich uranium and argued that Washington’s proposals remain at odds with Iran’s demands.

Elsewhere, broad US Dollar strength adds pressure on crude prices. The US Dollar Index trades near its highest level since April 2025, supported by elevated Treasury yields. A stronger Greenback makes Dollar-denominated Oil more expensive for buyers using other currencies.

Standard Chartered economist Tim Leelahaphan expects the Bank of Thailand (BoT) to keep its policy rate at 1.0% through 2026 and 2027, with the BoT prioritising economic growth over inflation. He highlights asymmetric risks around this on-hold call, noting that any hikes would likely be gradual while cuts could be faster if domestic growth slows sharply.

BoT seen on hold through 2027

"We maintain our view that the Bank of Thailand (BoT) will keep its policy rate on hold at 1.0% for the rest of 2026 and 2027, despite possible further hike(s) by the Fed and a recent upward reversal in domestic inflation."

"We see risks to our on-hold call in both directions. The BoT may face pressure to tighten as major and regional central banks raise rates. At the same time, further BoT cuts cannot be ruled out in the event that domestic growth slows sharply."

"We see these risks as asymmetric: Any hikes would likely be gradual, whereas cuts could come faster."

"The updated inflation forecasts may show more gradual disinflation than the sharp decline currently projected; we expect them to remain within the BoT’s 1-3% target range, with inflation mainly supply-side-driven."

"Growth forecasts could be trickier given looming economic uncertainty."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• GBP/USD falls 0.48% after peaking near 1.3276.
• UK 30-year Gilt yield climbs above 6% amid fiscal concerns.
• Markets see 81% odds of a November BoE rate hike.

The Pound Sterling (GBP) dives over 0.48% against the US Dollar (USD) on Wednesday as US Treasury yields hit a 24-year high, boosting the Greenback’s appeal, while traders await the release of the Federal Reserve’s (Fed) last meeting minutes. At the time of writing, GBP/USD trades at 1.3210 after peaking near 1.3276.

Sterling slides as surging global yields boost the Dollar ahead of Fed Minutes

The UK economic docket remained absent, yet recent hawkish comments from Bank of England (BoE) member Catherine Mann and Governor Andrew Bailey, hinting at a potential interest-rate adjustment, capped Sterling losses against the Dollar.

The Bank of England has held rates unchanged throughout the year, but high energy prices have increased the chances of a November rate hike, with money markets now seeing an 81% chance.

In the meantime, borrowing costs in the UK saw the 30-year Gilt surpass the 6% mark, amid worries about France's fiscal fragility ahead of the 2027 presidential election. In the UK, the focus is on the release of the Autumn Budget on October 28 by Finance Minister John Healey.

Global bond yields began to rise after the resumption of hostilities between the US and Iran, amid fears that energy prices would remain elevated for longer, pressuring major central banks to act. Nonetheless, widening credit spreads between French and German debt are sounding the alarms in the European Union for a potential spread, triggering memories of 15 years ago, during Greece’s crisis.

In the US, the economic docket featured the New York Fed Survey of Consumer Expectations, which showed households are less optimistic about their financial situation and pushed one-year inflation expectations higher, from 3.6% in August to 3.9% in September.

Traders shifted to the Federal Reserve’s September meeting minutes as they look for clues about the future of interest rates in the US. The latest inflation and jobs data triggered a U-turn for the current month’s meeting, and now money markets see the US central bank keeping interest rates at the 3.75%-4% range, but they expect 20 basis points of tightening in December, according to Prime Terminal.

Ahead, the US economic schedule will feature the release of Initial Jobless Claims on Thursday, followed on Friday by the University of Michigan's Consumer Confidence report.

GBP/USD Price Forecast: Technical outlook

In the daily chart, GBP/USD trades at 1.3210, keeping a bearish near-term bias as spot holds beneath the cluster of simple moving averages (SMA) around 1.3448 and the descending trend-line resistance coming in first at 1.3302 and then at 1.3426. The Relative Strength Index (14) at 36.15 stays below neutral, hinting at lingering downside pressure rather than outright oversold conditions, while Fed Sentiment Index readings near 137.91 suggest a still-firm dollar backdrop that reinforces the pair’s capped tone below these overhead technical barriers.

On the downside, initial structural support is aligned with the rising trend line from 1.3159, ahead of a deeper floor at the second upward trend-line origin around 1.3140. On the topside, a recovery would first need to clear the broken resistance trend line at 1.3302, with further upside scope only emerging if the pair advances towards and over the descending barrier at 1.3426 and the grouped daily SMAs near 1.3448.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

• The Japanese Yen holds firm on hawkish BoJ signals and intervention concerns.
• USD/JPY trades above the 50-day SMA but remains capped by the 200-day and 100-day SMAs.
• Buyers need to clear the 158.53-160.00 region to strengthen the recovery.

USD/JPY trades in a narrow range on Wednesday, with the Japanese Yen (JPY) holding a slight advantage over the US Dollar (USD) as traders assess hawkish Bank of Japan (BoJ) signals. Intervention risks near the 160.00 level also keep traders cautious. At the time of writing, the pair trades around 158, little changed on the day.

New BoJ policymaker Ayano Sato backed raising interest rates in several stages, reinforcing expectations that the central bank will continue gradually normalising policy after lifting its rate to 1.25% in September. Speaking on Tuesday, BoJ Governor Kazuo Ueda said, “We’re to keep raising rates in response to the economy and inflation.” However, he added that the “pace and timing of future policy adjustment will be decided based on the likelihood of our baseline projections materialising, as well as risks.”

However, broad US Dollar strength leaves the Yen vulnerable, while concerns over Japan’s fiscal outlook, elevated Oil prices and relatively low interest rates remain additional headwinds. Surging US Treasury yields are also widening the yield gap between the United States and Japan, further limiting demand for the Yen.

Technical Analysis

On the daily chart, USD/JPY holds just above the 50-day Simple Moving Average (SMA) at 157.70, but remains capped beneath the 200-day SMA at 158.53 and the 100-day SMA at 159.53, keeping the near-term bias bearish despite a modestly constructive tone in momentum. The Relative Strength Index (RSI) around 54 suggests recovering upside pressure, while the Moving Average Convergence Divergence (MACD) stays in positive territory, hinting at fading downside but not yet overcoming the overhead supply defined by the medium- and long-term averages.

On the topside, initial resistance is located at the 200-day SMA at 158.53, followed by the 100-day SMA near 159.53, with a stronger cap at the horizontal barrier of 160. On the downside, immediate support aligns with the 50-day SMA at 157.70, ahead of the 157 horizontal floor. Deeper retreats would expose the next supports at 155 and 153.

(The technical analysis of this story was written with the help of an AI tool. Know more.)