Forex News
- WTI remains depressed amid easing concerns over supply disruptions from Saudi Arabia.
- The geopolitical risk premium remains in play, which should limit losses for the commodity.
- The bullish technical setup backs the case for the emergence of dip-buying at lower levels.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – turns lower for the fourth straight day following a modest gap-up open to the $96.55-$96.60 region and drops to an over one-week low during the Asian session on Monday. The black liquid currently trades just below the $94.00 mark, down nearly 1.50% for the day.
Saudi Arabia said that it expects the East-West pipeline to return to about half its capacity within days after it was shut down following a drone attack. Adding to this, a recovery in shipments from Saudi Arabia eases supply concerns and turns out to be a key factor exerting pressure on crude oil prices. However, intensifying fighting between the Iran-backed Houthi group in Yemen and Saudi Arabia keeps the geopolitical risk premium in play, which should help limit the downside for the commodity.
Even from a technical perspective, crude oil prices hold a constructive bullish bias above the 100-day Simple Moving Average (SMA) at $85.14. Moreover, the 38.2% Fibonacci retracement level of the August-September upswing, near $91.13, underpins the recent advance. Meanwhile, the Relative Strength Index around 56.0 suggests moderate positive momentum even as the Moving Average Convergence Divergence (MACD) has slipped marginally negative, hinting at a maturing but still supported uptrend.
On the downside, initial support is seen at the 38.2% Fibo. retracement at $91.13, followed by the 50.0% level near $87.80 and the 61.8% retracement at $84.47, with the 100-day SMA around $85.14 reinforcing this broader demand zone on pullbacks. On the topside, immediate resistance emerges at the 23.6% retracement around $95.25. A sustained break above this barrier would be seen as a fresh trigger for bulls and open the way for a move towards retesting the recent swing high at $101.91.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
WTI daily chart
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.
Iran’s Islamic Revolutionary Guard Corps (IRGC) warned that any new military attack could trigger a response fought across a different geographical area and with different weapons, Reuters reported on Monday.
'If a new attack occurs, there will definitely be significant changes in our defense and our counter-attack. These changes will involve a shift in the geography of the conflict, and a change in weapons and military equipment. We will introduce new weapons with new capabilities...Our goals are no longer necessarily the same as before. We have new goals that have not yet been targeted,’ said IRGC spokesperson Brigadier General Hossein Mohebbi.
Market reaction
At the time of writing, the West Texas Intermediate (WTI) is down 1.74% on the day at $93.60.
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.
- USD/JPY trades lower against its peers after the BoJ’s policy outcome.
- Both the Fed and the BoJ hiked interest rates last week.
- The Fed signaled at least one more interest rate hike this year.
The Japanese Yen (JPY) underperforms its major currency peers at the start of the week, with the USD/JPY pair trading 0.1% higher to near 157.00 in the early European trade. The Japanese currency has come under pressure after the Bank of Japan’s (BoJ) monetary policy announcement on Friday.
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the weakest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.06% | 0.14% | 0.11% | 0.16% | 0.04% | 0.07% | 0.10% | |
| EUR | -0.06% | 0.02% | 0.04% | 0.03% | -0.08% | -0.07% | 0.00% | |
| GBP | -0.14% | -0.02% | 0.00% | 0.02% | -0.09% | -0.10% | 0.00% | |
| JPY | -0.11% | -0.04% | 0.00% | 0.04% | -0.12% | -0.04% | 0.04% | |
| CAD | -0.16% | -0.03% | -0.02% | -0.04% | -0.15% | -0.10% | -0.02% | |
| AUD | -0.04% | 0.08% | 0.09% | 0.12% | 0.15% | 0.04% | 0.11% | |
| NZD | -0.07% | 0.07% | 0.10% | 0.04% | 0.10% | -0.04% | 0.07% | |
| CHF | -0.10% | -0.01% | -0.00% | -0.04% | 0.02% | -0.11% | -0.07% |
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 Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
What happened at the BoJ meeting
The BoJ hiked interest rates by 25 basis points (bps) to 1.25%, as expected, the highest level seen in 31 years. Two BoJ board members: Toichiro Asada and Ayano Sato opposed the hike decision.
The Japanese central bank kept the door open for further interest rate hikes and warned that “inflation might exceed the central bank’s 2% target”, adding, “Recent Yen depreciation likely to push prices higher.”
Meanwhile, investors seek fresh cues regarding how much more the BoJ could raise interest rates without hurting the economic growth.
On the US Dollar (USD) front, the currency flattens at the start of the week with investors awaiting commentary from various Federal Reserve (Fed) policymakers after the monetary policy announcement last week.
The Fed hiked its policy rates by 25 bps to the 3.75%-4.00% range, as expected. 16 of 18 Fed members signaled through the dot plot that there would be at least one more interest rate hike this year.
USD/JPY Technical Analysis
In the daily chart, USD/JPY trades at 157.06, holding a mild bullish bias as it clings above the 20-day Exponential Moving Average (EMA) at 156.56. The pair has stabilized after its recent pullback from higher levels, and the Relative Strength Index (RSI) around 50 suggests neutral momentum, hinting that directional conviction remains tentative despite the short-term recovery above the EMA.
On the downside, the 20-day EMA at 156.56 acts as immediate support, and a daily close below this level would expose a deeper retracement toward the September 17 low at 155.34. On the upside, the pair could rise toward the September 2 high at 160.39 if it manages to break above Friday's high near 158.00.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Bank of Japan FAQs
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
- GBP/USD softens to around 1.3375 in Monday’s early European session.
- The negative outlook for the pair remains intact below the 100-day SMA, with bearish RSI momentum.
- The first upside barrier emerges at 1.3435; the initial support level to watch is 1.3355.
The GBP/USD pair loses traction to near 1.3375 during the early European trading hours on Monday. The US Dollar (USD) strengthens against the British Pound (GBP) after the US Federal Reserve (Fed) delivered a hawkish hike last week.
The US central bank decided to raise its benchmark interest rate by 25 basis points (bps) to a 3.75%–4.00% range at its September policy meeting. Fed penciled in an additional hike later this year, steps aimed at containing inflation.
Traders now see a 56.5% probability of another US rate hike when the central bankers meet next in October, according to the CME FedWatch tool.
On the UK front, the Bank of England (BoE) kept the interest rates at 3.75% last week, but also predicted that inflation could top 4% early next year. J.P.Morgan analysts expect the UK central bank to raise interest rates by 25 bps in February, but warn of further tightening if the Iran war continues.
UK political backdrop seen as supportive for Pound
Strategists at Scotiabank note that the political backdrop in the UK remains a source of support for the Pound, observing that “the narrative remains constructive as market participants and media signal ongoing confidence in the government’s efforts to maintain their commitment to fiscal responsibility.” This sustained confidence in fiscal discipline is seen as an important pillar underpinning broader sentiment toward UK assets.
Technical Analysis: GBP/USD keeps a bearish vibe below the 100-day SMA
In the daily chart, GBP/USD retains a bearish near-term bias as it holds beneath the 100-day moving average and the Bollinger midline. Price is hovering just above the lower Bollinger band, indicating downside pressure, while the Relative Strength Index (14) around 35 hints at weak momentum, not yet deeply oversold but consistent with prevailing selling interest.
On the topside, initial resistance is seen at the 100-day moving average at 1.3435, followed by the Bollinger midline near 1.3505. The next hurdle is seen at the upper band close to 1.3655, where a break would be needed to ease the broader downside bias.
On the downside, the lower limit of Bollinger band at 1.3355 offers immediate support. A clear drop below this area would open the way for further losses toward the September 18 low of 1.3335, followed by the July 28 low of 1.3273.
(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.
- Gold attracts fresh sellers on Monday as hawkish Fed bets and geopolitics revive USD demand.
- The recent pullback in US bond yields might cap USD gains and lend some support to the bullion.
- Traders might also opt to move to the sidelines ahead of the key Trump-Xi meeting on Thursday.
Gold (XAU/USD) kicks off the new week on a weaker note following Friday's failure near the $4,400 mark, stalling a two-day-old recovery move from a six-week low touched last Wednesday. The commodity currently trades near the $4,350 level as traders await further developments surrounding the Middle East crisis and their implications for inflation. This would influence interest rate expectations and, in turn, drive the non-yielding bullion.
Yemen's Iran-backed Houthi forces attacked sensitive sites with missiles and drones in the Saudi capital of Riyadh on Saturday. Moreover, Iran ruled out reopening the Strait of Hormuz or returning to negotiations with the US until Washington meets its conditions – including an end to the war on all fronts, the release of frozen Iranian assets and the lifting of the US naval blockade on Iranian ports. Meanwhile, US President Donald Trump said that he is in "deciding mode" over the Iran war, warning that big things are going to happen in the near future, keeping the geopolitical risk premium in play.
Adding to this, the US Federal Reserve's (Fed) hawkish outlook helps the safe-haven US Dollar (USD) attract some dip-buyers and stall Friday's retracement slide from the highest level since late May. In fact, the so-called dot plot revealed that Fed officials expect one more rate increase this year following the first hike in over three years. This, in turn, is seen as a key factor exerting some pressure on gold. However, the recent pullback in US bond yields from multi-year highs might hold back USD bulls from placing aggressive bets and help limit any further losses for the precious metal.
Fed tightening risks seen skewed to the upside as US resilience persists
Analysts at Nordea highlight that the US economy “remains resilient,” with “inflationary pressures” showing “few signs of easing” and the labour market “also holding up well.” In their view, this combination strengthens “the case for a more restrictive monetary policy stance.” Nordea reiterates that it “maintain[s] our forecast for two more hikes,” but cautions that “we see the risks as tilted to the upside,” underscoring the possibility that the Fed may ultimately need to do more than currently anticipated.
A recovery in shipments from Saudi Arabia dragged crude oil prices to an over one-week low, helping alleviate immediate fears of runaway inflation and keeping the yield on the benchmark 10-year US Treasury below the 5% threshold. Traders also seem hesitant ahead of the crucial meeting between US President Donald Trump and his Chinese counterpart Xi Jinping on Thursday. Apart from this, comments from influential FOMC members will drive the USD and the Gold price. In the meantime, the mixed fundamental backdrop warrants caution before positioning for a firm near-term direction.
XAU/USD daily chart
Technical Analysis
The XAU/USD pair holds below the 100-day Exponential Moving Average (EMA) and the 38.2% Fibonacci retracement level of the June-August swing low, keeping a mildly bearish bias. Meanwhile, the Relative Strength Index (RSI) sits near 49, signaling neutral momentum. That said, the Moving Average Convergence Divergence (MACD) remains in negative territory with a slightly negative reading, which hints that upside attempts could continue to be capped by nearby overhead levels.
On the topside, initial resistance is defined by the 100-day EMA at $4,367, with the 38.2% Fibo. retracement at $4,406 acting as the next obstacle, ahead of a stronger barrier at the 23.6% retracement near $4,515. On the downside, immediate support emerges at the 50.0% retracement around $4,317, followed by deeper cushions at the 61.8% level near $4,229 and then the 78.6% retracement around $4,103, with the prior swing low zone at $3,942 marking a more distant floor if selling pressure resumes.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar Price Last 7 Days
The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 1.07% | 1.12% | 2.25% | 0.98% | 0.51% | 1.62% | 0.86% | |
| EUR | -1.07% | 0.03% | 1.14% | -0.09% | -0.55% | 0.54% | -0.22% | |
| GBP | -1.12% | -0.03% | 1.13% | -0.14% | -0.58% | 0.52% | -0.28% | |
| JPY | -2.25% | -1.14% | -1.13% | -1.25% | -1.73% | -0.67% | -1.42% | |
| CAD | -0.98% | 0.09% | 0.14% | 1.25% | -0.43% | 0.64% | -0.16% | |
| AUD | -0.51% | 0.55% | 0.58% | 1.73% | 0.43% | 1.10% | 0.32% | |
| NZD | -1.62% | -0.54% | -0.52% | 0.67% | -0.64% | -1.10% | -0.79% | |
| CHF | -0.86% | 0.22% | 0.28% | 1.42% | 0.16% | -0.32% | 0.79% |
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).
- The Indian Rupee opens higher against the US Dollar at the start of the week.
- Lower oil prices bring relief for the Indian currency.
- Investors keenly await meeting between the US and Gulf nations this week.
The Indian Rupee (INR) starts the week on a positive note against the US Dollar (USD). The USD/INR pair drops to near 95.75 as the Indian currency gains due to continuous support from correcting oil prices.
In the opening session, the MCX Crude Oil contract expiring today (September 21) is down 2.7% to Rs. 9,400.
Currencies from economies, such as India, which rely heavily on oil imports to meet their energy needs, tend to outperform in a correcting oil price environment.
Oil eases as China seeks Iran’s help and Saudi pipeline capacity returns
Oil prices have been under pressure for over a week due to improving hopes of an increase in energy supply from Saudi Arabia.
Strategists at DBS observe that oil prices are "easing a tad" following reports that China has requested Iran to help rein in Houthi attacks on behalf of Saudi Arabia. They add that Saudi Arabia is now restoring its East–West pipeline to the Red Sea coast after damage from earlier attacks and "aims to return to half of its capacity," helping to alleviate some immediate supply concerns even as regional risks remain in focus.
US and Gulf nations to hold talks at UN General Assembly
US President Donald Trump confirms a meeting with leaders from Gulf Nations and top Iranian leaders to attend the United Nations (UN) General Assembly beginning later in the day. Leaders will likely discuss various ways to increase the supply of energy products from the Middle East.
Ahead of the meeting, US President Trump has dropped three options before Iran while speaking in an interview with Fox News over the weekend that he could destroy the country, allow it to collapse economically, or seek a diplomatic resolution, while predicting that "very big things are going to be happening in the not-so-distant future," The Economic Times reported.
India inflation rise keeps October rate hike in focus
Analysts at MUFG note that India’s August inflation “rose 4.8% yoy (DBSf 4.9%) from a revised 4.5% month before, firmest since December 2024,” highlighting a clear firming in price pressures. They argue that “a gradual broadening of price pressures is likely to keep headline inflation above 5% in the second half of the fiscal year, underscoring the need for a tighter policy bias.” MUFG adds that “recent developments, including a sustained rise in crude prices, tightening global financial conditions, firm domestic growth and signs of broadening in core pressures, strengthen the case for a shallow 50-bp hike in the second half of FY27, making October’s meeting a live one.”
USD/INR Technical Analysis
In the daily chart, USD/INR trades at 95.75. The pair holds above its recent moving average structure, with price comfortably above the 20-day exponential moving average (EMA) at 95.48, which now sits as underlying trend support despite being recorded below current spot.
The Relative Strength Index (RSI) near 60.00 stays in positive territory, suggesting that upside momentum remains constructive while avoiding outright overbought conditions.
On the topside, the previous week's high at 96.10 is the key hurdle for the pair. On the downside, any pullback toward the EMA zone is likely to attract buyers as long as RSI holds above the 50 line, with a loss of that area needed to hint at a deeper corrective phase.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Indian Rupee FAQs
The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee.
The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference.
Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee.
Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.
US President Donald Trump reversed himself twice on whether the United States (US) should strike the Houthis in Yemen, according to the New York Times.
The source said Trump told advisers he did not favor strikes on the Houthis, but then Saudi Crown Prince Mohammed bin Salman personally pressed Trump to launch American airstrikes against the Iran-backed Houthi movement in Yemen. Following the call, Trump had briefly ordered the Pentagon to prepare for military action before reversing course days later.
The pressure has risen after the Houthis fired a ballistic missile at Riyadh, which Saudi forces intercepted, and claimed attacks on sensitive sites in the capital.
Market reaction
At the time of writing, the West Texas Intermediate (WTI) is down 1.74% on the day at $93.60.
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.
- USD/IDR extends its gains as markets price in a 56.5% chance of another rate increase in October.
- Fed Chair Kevin Warsh stresses that persistent inflation remains too high, signaling further tightening.
- Traders position themselves ahead of Bank Indonesia's two-day policy meeting starting Tuesday.
USD/IDR extends its winning streak for the eighth successive day, trading around 17,850 during the Asian hours on Monday. The pair remains stronger as the US Dollar (USD) gains support amid hawkish sentiment surrounding the Federal Reserve (Fed) policy outlook. Last week, the US Federal Reserve delivered a 25-basis-point rate hike, its first hike in three years, as officials sought to curb inflation and flagged more hikes in the coming months.
Markets are now pricing in nearly a 56.5% chance of another US rate hike when the Fed meets next in October, compared with nearly 42.5% a week ago, according to the CME FedWatch tool.
Fed Chair Kevin Warsh said that "the plain fact is that inflation is too high and has been for too long." "This summer's inflation readings do not tell me that underlying trends have meaningfully improved," he added.
Traders are closely positioning themselves ahead of Bank Indonesia’s (BI) upcoming policy decision this week. The central bank is set to begin its two-day meeting on Tuesday. This follows its previous decision to leave key interest rates unchanged at 5.75% for a second consecutive month in August, taking a pause after implementing 100 basis points of total hikes since May.
Technical Analysis:
In the daily chart, USD/IDR trades at 17,850. The pair is consolidating after its recent rebound, with price hovering just under the short-term nine-day Exponential Moving Average (EMA) and above the medium-term 50-day EMA, leaving the broader bias neutral with a slight topside tilt. The 14-day Relative Strength Index (RSI) at 57.4559 sits in positive territory but shy of overbought conditions, suggesting improving bullish momentum without signaling exhaustion.
On the topside, a daily close above the nine-day EMA around 17,765 would reinforce buyers’ control and open the way toward further recovery levels, while a sustained break above the 50-day EMA near 17,799 would hint at a more durable bullish phase. On the downside, any pullback that fails to hold above the 50-day EMA would expose the recent reaction lows, with weakening momentum likely if RSI slips back toward the mid-50s area.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Kashkari flags stubborn inflation but leans on resilient growth narrative
Kashkari’s latest remarks score 6.2 on the FXS Speechtracker, essentially in line with the 6.3 historical average and signaling a steady, moderately hawkish tone. Emphasis that inflation “remains too high” and is not just an oil story, alongside references to robust growth, a resilient American economy, improving productivity and a still-strong labor market, underscores a bias toward keeping policy restrictive for longer even as Kashkari hopes real-economy dynamics help bring inflation down. The reminder that the bond market is the Treasury’s responsibility also distances the Fed from recent yield volatility, keeping the focus on the inflation-growth mix.
The FXS Fed Sentiment Index slipped by 1.47 points to 150.61, indicating a modest softening in perceived hawkishness relative to the prior reading. However, with the index still well above the neutral 100 mark, the Fed remains firmly in hawkish territory despite the pullback, consistent with a Kashkari speech that is only marginally less hawkish than the established baseline on the FXS Speechtracker.
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.
Gold prices fell in India on Monday, according to data compiled by FXStreet.
The price for Gold stood at 13,435.32 Indian Rupees (INR) per gram, down compared with the INR 13,482.07 it cost on Friday.
The price for Gold decreased to INR 156,707.00 per tola from INR 157,252.20 per tola on friday.
Unit measure | Gold Price in INR |
|---|---|
1 Gram | 13,435.32 |
10 Grams | 134,353.20 |
Tola | 156,707.00 |
Troy Ounce | 417,885.60 |
FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
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.
(An automation tool was used in creating this post.)
- EUR/JPY trades flat near 180.25 in Monday’s early European session.
- BoJ's dovish hike last week could undermine the Japanese Yen.
- ECB’s Lagarde said the central bank will decide 'meeting by meeting' on rates.
The EUR/JPY cross holds steady around 180.25 during the early European trading hours on Monday. Japan markets are closed for a three-day holiday, leading to low liquidity. Traders remain on high alert for currency intervention from Japanese authorities to prop up the volatile currency.
The Bank of Japan (BoJ) decided to raise its policy rate by 25 basis points (bps) to 1.25%, the highest level since 1995, as widely expected. However, a lack of explicitly hawkish guidance disappointed markets, weighing on the Japanese Yen (JPY) against the Euro (EUR).
Swaps markets have priced in less than 20% for the next policy meeting at the end of October, with 90% odds of a rate increase priced in for the December policy decision.
The Nikkei newspaper reported that Japanese officials conducted rate checks. A rate check involves authorities asking banks for currency quotes to gauge market conditions, which traders view as a precursor to currency intervention.
On the Euro front, European Central Bank (ECB) President Christine Lagarde said that any further interest rate hike by the ECB "will depend on the future.” She added that the central bank would decide "meeting by meeting" what is appropriate, whether that is to hold, increase, or cut interest rates, although cutting rates "is very unlikely at the moment.”
Yen outlook hinges on BoJ guidance as markets price further hikes
Economists at DBS note that markets are already looking beyond the next policy move, with investors having "priced in a second hike in Dec and a third hike by April next year," leaving the Yen vulnerable if the BoJ underwhelms. They caution that "policy guidance that is not quite as hawkish could see a resumption of JPY selling pressures," given how much tightening is now embedded in expectations. At the same time, DBS argues that the central bank is "hiking from a position of deeply negative real rates," and with "inflation pressures in the pipeline due to energy shocks," it would be "quite a surprise if Governor Ueda does not reinforce a vigilant stance and signal the possibility of more near-term hikes."
Technical Analysis: EUR/JPY remains capped under the 100-day SMA
In the daily chart, EUR/JPY maintains a bearish near-term tone as spot holds beneath the Bollinger middle band and the 100-day Simple Moving Average (SMA). This positioning suggests rallies remain corrective within a broader topping phase, while the Relative Strength Index (RSI) at about 41.7 stays below the 50 line, hinting at still-subdued bullish momentum despite the recent stabilization off the lows.
On the topside, initial resistance is located at the Bollinger middle band near 181.55, with a stronger cap emerging at the 100-day SMA around 184.18 and the upper Bollinger band close to 187.45 if buyers manage a deeper recovery. On the downside, the next notable support aligns with the lower Bollinger band around 175.60, where a decisive break would open the door to an extension of the current bearish leg.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
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