Forex News

• Trump posts that US rates should be 1% or less, hours after the Fed hiked.
• DXY holds above 100.00, with its session high already in before he posted.

Trump posted on Wednesday that US rates should be 1% or less and that the country has the strongest credit anywhere. He also wrote that cutting off trade with every nation the US runs a deficit with would earn at least $1.5 trillion a year. The Fed had set its own rate at 3.75%-4.00% a few hours earlier, which leaves 1% twelve quarter-point cuts away. He called the deficit a loss, and it is the part of the post that reaches the Dollar Index.

Americans bought roughly $743 billion more from abroad than they sold in the twelve months to June, and that gap is how foreigners end up with the Dollars they lend back to the US Treasury. Shutting it would remove buyers from the market that sets the borrowing costs he wants lower. The last agency to rate US debt at the top gave that up in May 2025.

The Dollar Index had not traded above 100.00 all session before the decision, with its low near 99.50 in the European morning. It cleared 100.00 within half an hour of the release and carried on to a high short of 100.50, above everything it traded before the Fed. It holds just beneath that high.

The Stochastic Relative Strength Index (Stoch RSI), a momentum gauge, ran to the top of its band on the break, dropped to the bottom while price stayed near the high, and has turned up again. The high was in before the post, and the index has not moved since.

DXY 5-minute chart

• NZD/USD has fallen every session for more than a week and is just above 0.5700.
• New Zealand Q2 GDP due Wednesday at 22:45 GMT, forecast at 0.1% against 0.8%.
• Daily momentum gauge at 8, the lowest reading since July.

NZD/USD has dropped in six straight sessions. The run started near 0.5900 on September 8, went through both long-run averages near 0.5850 early in the run, and the last three sessions have been the biggest of the lot. The pair is trading just above 0.5700 after Wednesday's Fed hike to 3.75-4.00%, and the July low near 0.5625 is the next level of any note below. The daily momentum gauge is at 8, which is as low as it has been since July.

A central bank that raised twice and a currency that fell anyway

The Reserve Bank of New Zealand (RBNZ) raised its cash rate to 2.75% on September 2, its second increase since July, because inflation hit 4.1% in the second quarter on fuel prices. It also said the next move is probably a pause in October and another rise in December. That's a central bank going the same direction as the Fed, just from a lower starting point, and the gap between 2.75% and the Fed's new 3.875% midpoint is more than a point. The Fed's own forecasts don't help either: they raised the US growth outlook for this year and next and took every cut out of 2027. The Kiwi is a currency that rises when investors want risk, and on a day the Fed said US growth is strong and rates are staying high, they didn't.

The number that explains the selling comes out after the selling

New Zealand's second-quarter GDP is due on Wednesday at 22:45 GMT, and the forecast is 0.1% growth on the quarter after 0.8% in the first quarter, which would be a stall. It's also the kind of number that determines whether the RBNZ's December hike stays on the table, so a miss pushes it further out and a beat brings it back in. Trade figures follow on Thursday at 22:45 GMT. The pair has fallen for six sessions into a number that could justify the whole move, which is the market pricing a slowdown before the statisticians confirm it. With momentum this stretched, the reaction to a beat would be sharper than the reaction to a miss.

Levels and bias

Resistance: 0.5750, then just under 0.5800, then the 50-day Exponential Moving Average (EMA) near 0.5850, which the pair went through early in the run and has not been back to.

Support: 0.5700, which Wednesday's low came within a few pips of, then the July low just above 0.5600.

Bias: Bearish below 0.5750. The first objective is 0.5700 and the second is the July low just above 0.5600. The daily Stochastic Relative Strength Index (Stoch RSI), a momentum gauge, reads 8, deep in oversold territory, so a bounce toward 0.5750 is likely at some point and wouldn't change the picture. The bearish case fails on a daily close above 0.5800.

NZD/USD daily chart

• AUD/USD trades under its 50-day average, which it last did in early August.
• RBA cash rate is 4.35%, still above the Fed's new 3.75-4.00% range.
• RBA Governor Bullock speaks Thursday at 23:30 GMT, next rate decision September 29.

Australia's central bank pays more than the Federal Reserve (Fed) does. The cash rate is 4.35%, the Fed's new range is 3.75-4.00% after Wednesday's quarter-point hike, and most of the big Australian banks expect the RBA to raise again before the end of the year, and none of that has helped. AUD/USD has fallen four out of the last five sessions in a row from the September high near 0.7250 and is trading just under 0.7100, under its 50-day average for the first time in six weeks.

The rate gap is in the Aussie's favour and it isn't working

The Reserve Bank of Australia (RBA) raised three times earlier this year, held at 4.35% in August, and said it could go again if inflation stayed high. Inflation was 3.5% in July with the underlying measure at 3.6%, so the case for another rise is live. On paper that's a currency with a rate advantage over the Dollar and a central bank that's still leaning toward more. In practice the Aussie trades as a bet on global growth and commodity demand, and on days when the Dollar rallies on higher US rates, it falls with everything else. Wednesday's fall was the largest of the five, which is the run getting faster rather than slowing down. The Fed's projections have one more hike this year, to 4.1%, so the gap narrows from here even if the RBA does nothing. A central bank that pays more than the Fed and plans to pay more still has produced a currency that has lost ground for a week.

A speech, then a fortnight of nothing

RBA Governor Bullock speaks on Thursday at 23:30 GMT, and it's the only Australian event on the calendar before the September 29 rate decision. There's nothing else scheduled at home. The Dollar side is busier: US housing starts and jobless claims on Thursday at 12:30 GMT, a Fed governor speaking on Friday at 07:30 GMT, and US industrial production on Friday at 13:15 GMT. Momentum on the daily chart is halfway down from its September peak and still falling, which means the selling has further to run before it looks stretched. The Aussie has given back about 40% of the rally it built from early July to the start of September.

Levels and bias

Resistance: The 50-day Exponential Moving Average (EMA) near 0.7100, which had held as a floor since early August until Wednesday, then 0.7150, then the September high near 0.7250.

Support: Wednesday's low just above 0.7050, then 0.7000, which is the last round level before the July starting point of the summer rally.

Bias: Bearish below 0.7100. The first objective is 0.7050 and the second is 0.7000. The daily Stochastic Relative Strength Index (Stoch RSI), a momentum gauge, is at 49 and falling from the top of its range, so there's room for more selling before it's stretched. A daily close above 0.7150 would mean the bearish case is wrong.

AUD/USD daily chart

• The US Federal Reserve hiked the benchmark interest rate to 3.75%–4.00%.
• Hawkish remarks from Fed Chair Kevin Warsh fueled demand for the US Dollar.
• The XAU/USD pair fell to a fresh one-month low of $4,235, maintaining its bearish tone.

Spot Gold (XAU/USD) is closing Wednesday with losses, trading around $4,250 after hitting an intraday high of $4,366. The bright metal came under strong selling pressure after the United States (US) Federal Open Market Committee (FOMC) announced a 25 basis-point (bps) interest rate hike, as expected. With this decision, the Fed Funds Target Range (FFTR) stands at 3.75%–4.00%.

The FOMC statement showed that policymakers believe inflation remains elevated, although economic activity in the country expands at a solid pace. About the labor market, the document reads: “Job gains have kept pace with the workforce, and the unemployment rate has changed little.”

Also, the Summary of Economic Projections (SEP) showed that officials anticipate at least one more rate hike before year-end, as 12 out of 18 officials expect one more 25 bps hike, while 4 officials expect two hikes. Only 2 members anticipate no more moves this year. Inflation is the key issue, as policymakers see inflation at 3.7% at the end of 2026 versus 3.6% in June, and core inflation is seen at 3.4% versus 3.3%.

Finally, Chair Kevin Warsh noted in the press conference that the decision was the “right” decision, as monetary conditions were not restrictive enough. His hawkish remarks fueled speculation that the US Fed could deliver up to two more interest rate hikes before year-end.

XAU/USD Technical Outlook:

XAU/USD trades at $4,262 and remains under pressure as it holds below the 100-day Simple Moving Average (SMA) near $4,326, the 20-day SMA around $4,442, and the 200-day SMA close to $4,540, with the shorter ones gaining downward traction, reflecting mounting selling interest. Technical indicators extend their declines below their midlines, reinforcing the bearish view.

On the topside, initial resistance emerges at the $4,300 threshold, followed by the 100-day SMA around $4,326, ahead of a more significant cap formed by the 20-day SMA near $4,442. The post-Fed low at $4,235 acts as immediate support, while additional declines below the $4,200 mark will open the door for a decline towards the psychological $4,000 threshold.

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

• EUR/USD breaks 1.1500 and both long-run averages after the Fed hikes.
• Fed raised rates to 3.75-4.00% this afternoon, the ECB to 2.50% six days earlier.
• Pair trades under its 50-day and 200-day averages, six pips apart.

The Euro (EUR) trades just under 1.1500 against the US Dollar (USD) on Wednesday, through the pair of long-run averages that had held it up since early August. Both central banks in this pair have raised rates inside a week, by the same quarter-point each, so the distance between them is exactly where it started. What moved today was not the gap. It was the published view of where the American half of it goes next.

Two quarter-points that cancel, and one that does not

The European Central Bank (ECB) went first, taking its deposit rate, the return banks earn on money parked with it, up to 2.50% last Thursday. The Fed matched the size this afternoon and went to 3.75-4.00% on a unanimous vote. At the midpoint of its new range the Fed pays 3.875% against the ECB's 2.50%, a distance of 1.375 points, the same as this morning. The projections are where the two part company. The American median for the end of 2027 moved from 3.6% to 4.1%, taking next year's cuts off the table, while the ECB has committed to nothing past its next meeting. Two central banks moved the same distance in the same week and only one of them said where it goes afterward.

The chair is not in his own dot plot

Half an hour later the chair explained the bar: confidence that underlying inflation is moving to 2% clearly and at sufficient speed, which he said the summer's numbers have not delivered. He also confirmed he had not submitted a projection of his own, as he did not in June. So the 4.1% median that just put the Euro through 1.1500 is the view of eighteen people, and the nineteenth is the one who read it out.

Levels and bias

Resistance: The 50-day and 200-day Exponential Moving Averages (EMA) sit six pips apart just above 1.1550, and the pair dropped through both today. That band is the first cap, with 1.1600 above it.

Support: Today's low in the 1.1450 area is the floor, and 1.1400 is the next round level beneath it.

Bias: Bearish while the average band just above 1.1550 caps, with 1.1450 the first objective and 1.1400 behind it. On the daily chart the Stochastic Relative Strength Index (Stoch RSI), which gauges momentum, is down near 15, deep in the lower quarter of its range, so the move is stretched and a bounce toward 1.1550 would not change the reading. A daily close back above 1.1600 voids the case.

EUR/USD daily chart

• GBP/USD skids back under 1.3400, a 0.68% fall on the Fed.
• American rate passes Bank Rate, which the Bank of England has not moved.
• Bank of England votes at 11:00 GMT Thursday, forecast to hold at 3.75%.

The Pound trades just under 1.3400, 91 pips lower and down 0.68%. The Fed took its rate to 3.75-4.00% and, measured at the midpoint of the new range, American money now pays more than British money for the first time this year. The Bank of England gets seventeen hours to respond to that, and is forecast not to.

Seventeen hours to answer

Bank Rate has been 3.75% since December 2025 and the committee that sets it has held five meetings running. Thursday's vote is forecast at six to hold and three to raise, the same split as July, when the three wanted an immediate move to 4%. British inflation reached 3.1% in August, exactly the forecast, and the rise came from motor fuel rather than from anything the Bank can reach with a rate. The three will have their case again. The forecast says they will lose it again.

Guidance from the committee that abolished guidance

The chair put a condition on the next move: the committee has to see underlying inflation heading to 2% clearly and quickly, and he does not think the summer's readings show it. He also confirmed he had not submitted a projection of his own to the dot plot, as he did not in June. The projections that came without him put the American rate at 4.1% at the end of this year and 4.1% again a year later. A committee that publishes no guidance has just told the Pound more about the next twelve months than its own central bank will offer tomorrow.

Levels and bias

Resistance: 1.3400 is the first thing overhead now that the pair has traded through it, and the 200-day Exponential Moving Average (EMA) sits roughly 40 pips above the market, an average the pair has been above since early August.

Support: Today's low sits a few pips under where the pair now trades. Beneath it, 1.3350 and then 1.3300.

Bias: Bearish while 1.3400 caps, with 1.3350 the first objective and 1.3300 behind it. The Stochastic Relative Strength Index (Stoch RSI) on the daily chart, a momentum gauge, has gone flat near 16 at the bottom of its range, so the selling is stretched without being done. A daily close back above 1.3450 voids the case.

GBP/USD daily chart

• DXY jumps 0.59% through 100.00, clearing both its 50-day and 200-day averages.
• Fed raises to 3.75-4.00% on a 12-0 vote, its first increase since 2023.
• Projections lift the end-2027 median to 4.1% from 3.6% in June.

The Dollar Index broke above 100.00, back above both of its long-run averages. The quarter-point that took the Fed to 3.75-4.00% was fully priced and worth nothing on its own. What the Dollar bought this afternoon was the paperwork that came with it: a set of projections with no rate cuts in them before 2028, and half an hour of a chair explaining why.

The forecasts did the work, minus one forecast

The committee's own numbers moved a long way. The median for the end of this year went from 3.8% in June to 4.1%, which is one more increase from here. The end-2027 median went from 3.6% to 4.1%, deleting next year's cuts entirely. Twelve of the eighteen who submitted projections put 2026 at 4.125%, four want two more increases and two think the job is done. Asked about it afterward, the chair said he had not offered a projection of his own, as he did not in June. The number the Dollar just rallied on is a median of everybody except the man who reads it out.

Everyone else is raising too, which is the point

This index is a comparison rather than a verdict, and it is not a broad one. The Euro alone is 57.6% of it, and adding the Yen and the Pound gets three currencies to roughly four-fifths of the whole thing. The European Central Bank (ECB) raised its deposit rate to 2.50% last Thursday and the Bank of England answers at 11:00 GMT tomorrow, so two of those three are moving the same way. What this index registers is not whether American rates went up, but whether they went up by more than everyone else's. The weights it uses to answer that were last changed in 1999.

Levels and bias

Resistance: Today's high at 100.25 is the first thing overhead, and 100.50 is the next round level above it.

Support: The 50-day and 200-day Exponential Moving Averages (EMA) sit 0.11 apart just below 99.70, and the index cleared both on the decision. That cluster is the floor that matters, with 99.50 beneath it.

Bias: Bullish while the average cluster just below 99.70 holds, with 100.50 the first objective and 101.00 behind it. Daily momentum, measured by the Stochastic Relative Strength Index (Stoch RSI), sits near 67 and is still climbing, so there is room before the move is stretched. A daily close back below 99.50 voids the case.

DXY daily chart

• USD/CAD rises to a six-week peak, testing 1.4000, a 0.51% rise on the Fed.
• Canada's rate has not moved in seven meetings while the Fed's just did.
• Pair clears its 50-day and 200-day averages, both clustered near 1.3900.

The Loonie trades at its weakest since early August, with USD/CAD just under 1.4000 after a 71-pip rise and a 0.51% gain. The Fed raised its rate a quarter-point to 3.75-4.00% and the Bank of Canada did not, which takes the distance between them from 1.375 points to 1.625. That is most of the story. A currency that sells oil at more than $100 a barrel lost ground anyway.

One of them moved, and it was not the near one

The Bank of Canada (BoC) has held its overnight rate at 2.25% through seven consecutive meetings, the most recent on September 2, and does not decide again until October 28. American money now pays 1.625 points more than Canadian money overnight, where this morning it paid 1.375 more. The Fed's projections widen that further on paper, carrying the American rate to 4.1% by December and holding it there through 2027, while Canada's own market prices no change at all before the year is out. The Bank of Canada spent this afternoon publishing its account of the September 2 decision, thirty minutes before the Fed made a different one.

Oil did not save it

The barrel above $100 normally lifts this currency, and on any other afternoon it would have. The rate gap moved today and the barrel did not. The chair supplied the rest, describing a committee that still needs to see underlying inflation heading to 2% clearly and quickly and does not yet, which is a central bank with more to do. Canada's has nothing scheduled for six weeks.

Levels and bias

Resistance: 1.4000 is directly overhead and today's high stopped ten pips beneath it. Above that sit 1.4050 and 1.4100.

Support: The 50-day and 200-day Exponential Moving Averages (EMA) are clustered near 1.3900, about 70 pips below the market, and the pair opened on top of them this morning. Beneath that cluster, 1.3850.

Bias: Bullish while the average cluster near 1.3900 holds, with 1.4000 the first objective and 1.4050 behind it. The Stochastic Relative Strength Index (Stoch RSI), the daily momentum gauge, is up at 81 at the top of its range, so the move is stretched and a pullback toward 1.3950 would not change the reading. A daily close back below 1.3850 voids the case.

USD/CAD daily chart

• DJIA drops 576 points to just above 51,500 as the Fed raises rates.
• Fed goes to 3.75-4.00% with no dissent, its first increase since 2023.
• Fifth straight fall on a Fed decision day, averaging 1.5% each time.

The Dow Jones Industrial Average (DJIA) trades just above 51,500 on Wednesday, down 576 points and 1.11%, its worst session of the month. The Federal Reserve (Fed) raised its rate a quarter-point to 3.75-4.00%, which everyone had priced, and the index spent the two hours afterward finding out what came with it. The broad market has now fallen on five consecutive Fed decision days this year, losing an average of 1.5% each time, which is the longest such run since a stretch of seven that ended in 2018.

A quarter-point on overnight money, thirty ways

The rate the Fed sets is what banks pay to borrow from each other overnight, and it reaches this index in two directions. It lifts what the 30 companies pay on floating-rate debt, and it widens what JPMorgan (JPM) and Goldman Sachs (GS) earn on the gap between their lending and their deposits. Those two partly cancel. What does not cancel is the forecast, because the committee's own numbers now put the rate at 4.1% at the end of this year and 4.1% again at the end of next, with four of the eighteen seeing any reduction by then. Thirty borrowers have just had next year's interest bill rewritten upward.

The Chair said the test has not been met

At the press conference, Fed Chair Kevin Warsh set out a test: the committee has to be confident that underlying inflation is heading to 2% clearly and fast enough, and today it judged that test unmet. The summer's inflation numbers, he said, do not show the underlying trend getting better. Against that, he described an economy running more or less at full employment, with productivity strong and capital investment robust. That combination is the awkward part for an equity index. The case for the companies is also the case for charging them more.

Levels and bias

Resistance: The 51,750 area is the first thing overhead, and 52,000 sits above it, the level the index held through the morning. The 50-day Exponential Moving Average (EMA) near 52,700 has capped every attempt since the start of September.

Support: Today's low just under 51,500 is the floor. Below it, the late-June base near 51,300 is the next stop and the lowest the index has traded in three months.

Bias: Bearish while 52,000 caps, with the late-June base near 51,300 the first objective and 51,000 behind it. The daily Stochastic Relative Strength Index (Stoch RSI), a momentum gauge, points down from near 32, so the selling is not exhausted. A daily close back above 52,250 voids the case.

Dow Jones 5-minute chart

• Silver trades under pressure as the US Dollar strengthens after the Fed decision.
• The Fed raises rates by 25 basis points and signals that additional tightening is likely.
• Technically, XAG/USD maintains a bearish bias below the 100-day and 200-day SMAs, while the 50-day SMA acts as immediate support.

Silver (XAG/USD) trades under pressure on Wednesday as a stronger US Dollar (USD) and rising US Treasury yields weigh on the non-yielding metal following the Federal Reserve’s (Fed) monetary policy decision. At the time of writing, XAG/USD trades around $62.68, down 1.56% on the day.

The Fed raised the federal funds target range by 25 basis points to 3.75%-4.00% in a unanimous 12-0 decision. In its statement, the central bank said economic activity is expanding at a solid pace, domestic spending remains resilient and unemployment has changed little. Policymakers added that inflation remains elevated and that the rate increase will help bring inflation back to the 2% target sooner.

The US Dollar Index (DXY) advances above the psychological 100.00 mark, while the benchmark 10-year US Treasury yield rebounds toward 5.00%.

Higher interest rates and rising bond yields typically weigh on Silver by increasing the appeal of interest-bearing assets. However, the metal’s decline remains limited as the quarter-point hike was widely expected.

Fed Chairman Kevin Warsh also struck a hawkish tone, saying inflation remains too high and that the economy is strong enough for policymakers to focus on price stability, while describing the labor side of the Fed’s mandate as “in good shape.”

Technical Analysis

On the daily chart, the near-term bias leans bearish as price holds above the 50-day Simple Moving Average (SMA) at $62 but remains well below the 100-day and 200-day SMAs at $66 and $73, respectively, suggesting rallies are still capped by the broader downtrend. The Relative Strength Index (RSI) near 45 and a negative Moving Average Convergence Divergence (MACD) reading with red histogram bars hint at soft momentum and a lack of strong directional conviction.

On the downside, initial support is seen near the 50-day SMA at $62, with further cushions at the psychological $60.00 level and then $55 if selling pressure accelerates. On the topside, a recovery toward the 100-day SMA at $66 would face notable resistance, while any extension beyond that level would bring the 200-day SMA at $73 into focus as a stronger medium-term barrier.

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