Forex News
- GBP/USD struggles to lure buyers as the USD stands firm near its highest level since March 2025.
- Oil-driven inflation fears keep US bond yields near multi-year highs, underpinning the Greenback.
- Geopolitical risks further benefit the buck, while UK fiscal concerns contribute to the GBP decline.
The GBP/USD pair languished near its lowest level since June 26, touched the previous day's low, trading below the 1.3200 mark during the Asian session on Friday amid a bullish US Dollar (USD). Spot prices seem poised to register modest losses for the third straight week as traders now look to the US monthly employment details for a fresh impetus.
The popularly known US Nonfarm Payrolls (NFP) report will be looked upon for more cues about the Federal Reserve's (Fed) future policy path amid receding bets for an October rate hike, which will play a key role in influencing the near-term USD price dynamics. In the meantime, the USD Index (DXY), which tracks the Greenback against a basket of currencies, stands firm near a one-and-a-half-year top as oil-driven inflation fears limit the overnight pullback in US bond yields from multi-year highs.
Apart from this, persistent geopolitical uncertainties stemming from the US-Iran standoff benefit the safe-haven buck. Meanwhile, 30-year gilt yields topped 6% for the first time since early 1998, fueling fiscal worries ahead of the Autumn Budget on October 28. This, in turn, undermines the British Pound (GBP), which is seen as another factor weighing on the GBP/USD pair. The downside, however, seems limited as traders might refrain from placing aggressive directional bets ahead of the key data risk.
GBP/USD daily chart
Technical Analysis
The GBP/USD pair keeps a bearish near-term tone, and the overnight break below the 1.3200 mark has set the stage for a fall towards retesting the year-to-date low, around the 1.3140 region, touched in June. This is followed by the 1.3100 round figure, which, if broken, should pave the way for an extension of the recent downtrend witnessed over the past month or so.
On the top side, any attempted recovery is more likely to confront stiff resistance ahead of the 1.3300 mark, and sustained strength beyond the said barrier is needed to back the case for further upside. The GBP/USD pair might then aim to test the technically significant 200-day Simple Moving Average (SMA) at 1.3448.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
US official said that the Pentagon may soon send a third aircraft-carrier strike group and 10,000 sailors and Marines to the Persian Gulf, the Wall Street Journal reported on Thursday. The move came as US President Donald Trump said increased military strikes against Iran were “possible” after the November midterm elections.
Meanwhile, the US Central Command (CENTCOM) said in a statement that “we don’t discuss unit schedules for operational security reasons.”
Iran’s Foreign Minister Abbas Araghchi suggested in private talks recently that the country was willing to restore nuclear inspectors’ access to bombed facilities in exchange for sanctions relief, according to Bloomberg.
Elsewhere, Saudi Civil Defense officials said on Thursday that the drones and ballistic missile launched by Yemen's Houthis were intercepted over Khamis Mushait.
Market reaction
At the time of writing, the West Texas Intermediate (WTI) is up 0.09% on the day at $92.00.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
The US President Donald Trump administration told European allies to release diesel from national emergency stockpiles, Bloomberg reported on Thursday.
This move is seen as potentially averting a ban on US exports of the critical fuel. The White House said that additional diesel from Europe would increase global supplies and lower prices. One source said Washington wants the European Union (EU) to release 120 million barrels of diesel over six months
“Our European partners should accelerate delivery on their existing commitments and make additional supplies immediately available to address ongoing disruptions” to energy markets, Treasury Secretary Scott Bessent said Thursday on X. “American farmers, truckers, and businesses should not be left carrying the burden of a global diesel shortage,” he added.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
- USD/JPY dips only back below 158.00 on a hot Tokyo inflation report.
- Tokyo prices excluding food and energy rise to 3%, a full point in a month.
- Speculators still net long the Yen near the 88th percentile of five years.
Tokyo's core inflation rate came in at 2.7% against a 2.4% forecast, a beat that should have done more for the Yen than it did. USD/JPY slipped back below 158.00 on the release and is still up on the week. Speculators bought Yen in record size before the Bank of Japan (BoJ) raised rates on September 18, and the Yen has weakened since.
Tokyo reaches the inflation rate the BoJ expected later in the fiscal year
In Tokyo, core inflation, the measure that excludes fresh food, reached 2.7% in September after 1.8% in August, its fastest since November 2025, and headline inflation was also 2.7%, up from 1.9%. Stripping out energy as well as food leaves 3%, up from 2%, so the acceleration isn't confined to fuel and electricity. The figures came out alongside Japan's August unemployment rate, which ticked up to 2.5% against a 2.4% forecast.
Nationally, core inflation was 1.7% in August, below the BoJ's 2% target for an eighth straight month as government subsidies on utility bills held it down. Tokyo covers only the capital's 23 wards, and the national core rate has come in a tenth below Tokyo's in each of the last two months. National figures for September come out on October 22, before the BoJ's next decision at the end of the month. The BoJ raised rates twice during that eight-month run, in June and on September 18.
The Yen's most likely buyers bought early
Speculators bought a net 216K Yen futures contracts in the two weeks to September 15, a record for any fortnight and worth about $17.3 billion, according to Commodity Futures Trading Commission (CFTC) data. That took their net long to about 120K contracts, the most in 14 months, and they cut it to about 72K in the week to September 22 as the Yen weakened after the hike.
The remaining net long still ranks around the 88th percentile of the past five years, so the funds most likely to buy the Yen on a hot Japanese number largely own it already. Friday's CFTC report counts positions as of Tuesday, which means it describes a market that had seen neither the BoJ's meeting summary nor Tokyo's numbers.
A soft US jobs count could do what Tokyo's numbers didn't
US Nonfarm Payrolls (NFP) for September arrive at 12:30 GMT on Friday, forecast to show 90K new jobs after 162K, with average hourly earnings expected to rise 3.2% YoY. Japan's August pay data follow at 23:30 GMT on Tuesday.
Total cash earnings in Japan rose 4.7% from a year earlier in July, faster than Tokyo's prices even after Thursday's jump. Pay rising ahead of prices is what the BoJ has said it wants to see as it keeps raising rates, which makes October easier to argue than USD/JPY's reaction suggests.
Yen levels after the Tokyo numbers
Resistance: 158.00 is the level the release took USD/JPY back under, with the 50-day Exponential Moving Average (EMA) at the same level. Thursday's high, just short of 158.50, is next.
Support: 157.50 held through the release bar. Thursday's low sits just above 157.00, with 156.50 below it near the September 28 and September 30 lows.
Bias: Long above 157.50 on a closing basis, aiming first at 158.50 and then at 159.00. The daily Stochastic Relative Strength Index (Stoch RSI) reads near 82, high in its range, so another dip like the one on the release could come without breaking the call. The trade is wrong on a daily close below 157.00.
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.
- Gold price recovers some lost ground to around $4,180 in Friday’s early Asian session.
- US Treasury yields eased across the curve, with the 10-year retreating from the highest since 2002.
- The US September employment data will take center stage on Friday.
Gold price (XAU/USD) rises to near $4,180 during the early Asian session on Friday. The precious metal rebounds as US Treasury bond yields retreat from multi-decade highs. However, the potential upside might be limited amid lingering inflation concerns from elevated energy costs and the prospect of higher US interest rates.
The US 10-year Treasury yield, a yardstick for global borrowing costs and asset prices, eased to 5.24% afterspiking earlier in the session to 5.34%, reaching a new multi-decade peak. The 30-year Treasury bond yield similarly hovered near levels not seen in 24 years before moderating into the close.
“Geopolitical uncertainty, particularly around the stalled US-Iran ceasefire discussions, continues to provide a safe-haven underpinning, while higher oil prices remain an inflation risk,” said Manav Modi, commodity analyst Motilal Oswal Financial Services Ltd.
All eyes will be on the US September employment data on Friday, which could offer some hints about the US interest rate path. Economists expect the Nonfarm Payrolls to show an increase of 90,000 job additions in September, versus 162,000 prior. The Unemployment Rate is projected to stay unchanged at 4.1% during the same period.
"Anything that would increase the likelihood of a Fed rate hike would certainly dent sentiment in the gold market. Any additional strong rise in energy prices or any escalation in the Middle East would also do the same," said David Meger, director of metals trading at High Ridge Futures.
Markets are now pricing in nearly a 24.9% chance of a Fed rate hike in October and a 79.4% odds of an increase in December, the CME FedWatch Tool showed.
Gold softens as elevated US real yields and PCE revisions temper inflation narrative
According to analysts at UOB Group, “Gold spot reversed earlier gains – which saw it trade as high as $4,219/oz – to close 0.6% lower at $4,157/oz as elevated real yields continued to cap the bullion's upside.” On the macro side, UOB Group notes that “US headline PCE rose 0.3% m/m in Aug, in line with estimates, while the y/y rate fell to 3.4% from 3.7% in prior month,” adding that recent “BEA methodology revisions improved the optics but did not materially alter the underlying inflation narrative.”
Technical Analysis: Gold retains a negative outlook below the 100-day SMA
In the daily chart, XAU/USD maintains a bearish near-term bias as price holds below the 100-day moving average (MA) and the Bollinger Bands’ 20-day simple moving average (SMA). The metal is hovering closer to the lower half of the Bollinger envelope, while the 14-day Relative Strength Index around 40.83 stays in neutral-to-soft territory, which suggests subdued bullish momentum and leaves the downside exposed while these overhead averages cap recovery attempts.
On the topside, initial resistance emerges at the 100-day MA at $4,285, followed by the Bollinger 20-day SMA at $4,300, with a stronger barrier at the upper Bollinger band around $4,470. On the downside, immediate support is located at the lower Bollinger band near $4,130; a sustained break below this band would reinforce the bearish bias and open the door for a deeper slide, while a daily close back above the clustered moving averages would be needed to ease the current downside pressure.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Federal Reserve (Fed) Bank of Dallas President Lorie Logan said on Thursday that the central bank will need to raise short-term borrowing costs by at least another half of a percentage point to turn monetary policy "modestly restrictive" and get inflation back on track to the target.
Key quotes
Higher yields may also indicate increased term premiums, lowering need to tighten monetary policy.
Fed policy is not restrictive, must be modestly tight.
Economic expansion strengthening, labor market well balanced.
We must revive price stability.
Increase in long-term yields signals market expects higher interest rates.
Will monitor bond yield changes and evaluate their impact.
Policy rate must increase by additional 50 bps or more.
Uncertainty remains on how high policy rate must rise to bring inflation to 2%.
Without higher rates, inflation won’t reach Fed’s 2% target.
At minimum, several more rate hikes would reverse last fall's reductions.
Market reaction
As of writing, the US Dollar Index (DXY) is up 0.52% on the day at 102.00.
Logan’s hawkish tilt lifts Fed expectations and supports the Dollar
Fed’s Logan delivers a notably more hawkish message, with a 9.2/10 FXS Speechtracker score standing well above the 8.1/10 historical average, underscoring a stronger tightening bias relative to the established baseline. The emphasis that higher long-term yields may reflect rising term premiums, potentially reducing the need for additional tightening, sits in tension with explicit calls for at least 50 bps more in rate hikes and several additional moves to ensure inflation returns to 2%, reinforcing a net hawkish tone supportive of the Dollar and U.S. yields. The characterization of policy as not yet restrictive, alongside a strengthening expansion and balanced labor market, signals scope for further tightening despite acknowledgment of uncertainty around the terminal rate.
The FXS Fed Sentiment Index rises by 1.68 points to 136.59, firmly in hawkish territory well above the neutral 100 threshold and consistent with the elevated FXS Speechtracker score. This move confirms that market-implied Fed rhetoric has shifted toward a more aggressive tightening stance, likely underpinning Dollar demand while keeping pressure on risk-sensitive currencies.
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.
The headline Tokyo Consumer Price Index (CPI) for September rose 2.7% YoY as compared to 1.9% in the previous month, the Statistics Bureau of Japan showed on Friday.
Additionally, Tokyo CPI ex Fresh Food climbed 2.7% YoY in September against 2.4% expected and 1.8% in the prior month. The Tokyo CPI ex Fresh Food, Energy jumped 3.0% YoY in September, compared to the previous reading of 2.0%.
USD/JPY reaction to the Tokyo Consumer Price Index data
The Japanese Yen (JPY) attracts some buyers following Tokyo CPI inflation report. As of writing, the USD/JPY pair is up 0.28% on the day at 157.85.
Inflation FAQs
Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
- AUD/USD slips as Dollar extends winning streak into fourth day.
- Fed hold odds reach 70%, but US data stay resilient.
- September NFP now becomes next test for Aussie downside.
The Aussie Dollar drifts lower, down 0.26% against the US Dollar, as the latter extends its gains for the fourth straight day amid continued trimming of Fed-hawkish bets, while Fed policymakers suggest patience is warranted ahead of the October 28 meeting. The AUD/USD trades at 0.6928.
AUD/USD weakens despite fading Fed hike bets as resilient US data dominate
Sentiment has improved during the day, despite harsh comments by US President Donald Trump, who reiterated that Iran will never have a nuclear weapon. In earlier comments, he said that the war will end soon, one way or the other and that he expects to resume bombing Iran in November.
Fed officials, including Vice Chairman Philip Jefferson, indicated the economy is near maximum employment and emphasised patience on rate changes. Meanwhile, Minneapolis Fed President Neel Kashkari advocated for more rate hikes.
Key data in the US were released on Thursday, led by the ISM Manufacturing PMI, which was little changed at 54.5, down from 54.6 and below forecasts. Digging into the report, New Orders improved, the Employment Index continued to expand, and Prices Paid jumped sharply from 71.1 to 77.9, indicating high energy prices.
On the jobs data, jobless claims for the week ending September 26 were 197K, below estimates and the previous week's downward-revised figure to 198K.
Given the backdrop, recent data show the economy remains resilient: manufacturing activity expanded, and Wednesday’s Q2 2026 GDP final reading, at 2.2% QoQ, up from 1.5%, indicates that the economy is faring better than expected, while the labour market is consistent with “maximum employment.”
Despite this, expectations that the Fed will raise rates in October fell to 30%, while the odds for a hold stand solid near 70%, according to Prime Terminal.
In Australia, the economic docket is absent, but next week’s Flash PMIs and the TD-MI Inflation Gauge will update the status of the economy. In the US, traders are eyeing Friday’s Nonfarm Payrolls report for September, which is expected to dip from 162K to 90K, while the Unemployment Rate is forecast to stand pat at 4.1%.
AUD/USD Price Forecast: Technical Outlook
In the daily chart, AUD/USD trades at 0.6929, extending a bearish near-term bias as spot holds beneath the clustered triple simple moving average (SMA) set at 0.7091. Downside pressure is reinforced by the presence of a broader descending resistance line off 0.8015, while the Relative Strength Index (14) at 25.55 slips into oversold territory, hinting that while sellers remain in control, the pace of the decline could start to moderate rather than accelerate aggressively.
On the topside, initial resistance is located at the triple SMA area around 0.7091, with a stronger barrier at the horizontal line near 0.7198, where prior supply is likely to re-emerge on any corrective bounce. On the downside, price is now probing the lower band of a series of upward-sloping support trend lines originating between 0.6833 and 0.6865, suggesting that the zone just below the current level could offer interim demand, but only a daily close back above 0.7091 would start to weaken the prevailing bearish structure.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the Euro.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.75% | 0.51% | 0.35% | -0.07% | 0.24% | 0.58% | -0.59% | |
| EUR | -0.75% | -0.25% | -0.43% | -0.83% | -0.52% | -0.19% | -1.33% | |
| GBP | -0.51% | 0.25% | -0.17% | -0.57% | -0.28% | 0.05% | -1.08% | |
| JPY | -0.35% | 0.43% | 0.17% | -0.42% | -0.11% | 0.19% | -0.93% | |
| CAD | 0.07% | 0.83% | 0.57% | 0.42% | 0.31% | 0.61% | -0.51% | |
| AUD | -0.24% | 0.52% | 0.28% | 0.11% | -0.31% | 0.33% | -0.79% | |
| NZD | -0.58% | 0.19% | -0.05% | -0.19% | -0.61% | -0.33% | -1.09% | |
| CHF | 0.59% | 1.33% | 1.08% | 0.93% | 0.51% | 0.79% | 1.09% |
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 Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
- USD/JPY climbs back above 158.00 to a one-week high as BoJ October hike bets fade.
- October BoJ hike pricing roughly halved since Monday.
- Tokyo core inflation due at 23:30 GMT, with a 2.4% forecast above target.
The Yen is falling on the timetable of the Bank of Japan (BoJ) rather than on Japanese inflation. The BoJ published its September meeting summary at 23:50 GMT on Wednesday, and traders cut bets on an October follow-up. Japanese rate markets now price about half the October move they did on Monday, a day before a Tokyo inflation figure forecast well above the BoJ's 2% target. USD/JPY trades just above 158.00 and is heading for its third weekly gain in a row.
A hike in September, a fifth of one priced for October
The BoJ raised its rate to 1.25% on September 18 by a 7-2 vote and said it would keep raising if its outlook holds. Analysts read it as moving every three months, which is a way of saying the next hike comes in December rather than October.
If the BoJ waits that long, the next change in the gap between US and Japanese rates can only come from the Fed on October 28, where futures put the odds of a hike near one in three. USD/JPY's last leg higher on Thursday came on a report of a third US aircraft carrier group heading to the Middle East, and buyers chose the Dollar over the Yen as a haven on the news.
Tokyo's core rate was last above 2% in December 2025
Tokyo's core inflation rate for September, which leaves out fresh food, is due at 23:30 GMT on Thursday, forecast at 2.4% from 1.8%. Tokyo's figures usually lead the national ones by about three weeks. US payrolls follow on Friday at 12:30 GMT.
Japanese wage figures for August, last at 4.7% YoY, come on Tuesday at 23:30 GMT. A hot Tokyo number could bring October back, though the summary of a meeting where the BoJ raised rates was enough to take half of it out.
Levels for the Yen into Tokyo's data
Resistance: Thursday's high came in just short of 158.50, and 159.00 is the September 24 high, where the last push stopped.
Support: 158.00, where the 50-day Exponential Moving Average (EMA) sits, has held since Thursday's last leg higher. 157.50 is next, and Thursday's low sits just above 157.00.
Bias: The lean is long while 157.50 holds on a closing basis, with 158.50 the first objective and 159.00 the second. The daily Stochastic Relative Strength Index (Stoch RSI) is near 82 and still rising, so the move is stretched going into Tokyo's data. A daily close below 157.00 ends the trade.
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.
- NZD/USD extends its slide under 0.5600, its lowest since November 2025, as the Dollar hits a yearly high.
- Sixth straight weekly loss on track, from just under 0.6000 in late August.
- RBNZ cash rate at 2.75%, up from 2.25% after its last cut in November 2025.
Five losing weeks in a row and most of a sixth have taken NZD/USD to its lowest since the Reserve Bank of New Zealand (RBNZ) last cut rates, in November 2025. The RBNZ has raised its rate twice since, to 2.75%, and traders have built up bets on a third hike on October 28. NZD/USD trades just above 0.5600 and is down for a third session running.
The Fed's range is back where it was in November 2025, and so is the Kiwi
The Fed's range is 3.75%-4.00% after its September 16 hike, the same as in November 2025. The RBNZ's Official Cash Rate (OCR) is a quarter-point above where it stood before its November 2025 cut. The gap between the two policy rates is narrower than the last time NZD/USD traded this low.
What has changed is longer-term US borrowing costs, with the 10-year Treasury yield at its highest since 2002 on Thursday. The RBNZ may yet hike a third time on October 28, and the two hikes before it have left the Kiwi where it started.
Soft US data hasn't been enough to lift the Kiwi
US payrolls on Friday at 12:30 GMT are the next scheduled test for NZD/USD, with 90K jobs forecast after August's 162K. New Zealand's next release is third-quarter business confidence from the New Zealand Institute of Economic Research (NZIER), due on Monday at 21:00 GMT and last at 8%. China, New Zealand's largest export market, is on holiday until October 7.
Softer US inflation figures on Wednesday didn't stop NZD/USD falling that day. The 90K payroll forecast already describes a slowing job market, so a weak count would be the expected result rather than news.
The New Zealand Dollar's levels and bias
Resistance: 0.5650 kept Tuesday's and Wednesday's daily closes below it, near where the week opened, and every session since September 23 has peaked below 0.5700.
Support: The break under 0.5600 leaves Thursday's low just beneath it as the first marker, then 0.5550 and 0.5500.
Bias: The tape stays offered below 0.5650 on a closing basis, with 0.5550 the first objective and 0.5500 the second. The daily Stochastic Relative Strength Index (Stoch RSI) is near 9, roughly where it has been since mid-September, so the slide is old without having turned. A daily close above 0.5700 cancels the short.
NZD/USD daily chart
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.
The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.
Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.
The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
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