Forex News

• German Industrial Production rebounded 2% in September, but the solid economic data failed to support the Euro.
• Strait of Hormuz tanker attacks and Middle East tensions pushed Brent crude back above $100.
• Higher energy prices boosted the commodity-linked Canadian Dollar, dragging the EUR/CAD cross lower.

EUR/CAD continues its losing streak for the third successive day, trading around 1.5920 during the European hours on Wednesday. The currency cross is under downward pressure as the Euro (EUR) faces headwinds despite a stronger-than-expected rebound in German industrial performance.

According to official statistics, German factory output surged 2% in September, easily beating forecasts of a 0.5% gain and reversing August's 1.2% contraction. On an annualized basis, industrial production rose 2.3%, recovering from a 1.6% decline in the previous month. However, these solid economic metrics have been overshadowed by a broader risk-averse market sentiment that continues to weigh on the Euro.

Rising geopolitical friction in the Middle East has pushed Brent crude back above $100 per barrel, rekindling fears of energy-driven inflation and slower growth across the Eurozone. Supply security remains precarious as Iran intensifies attacks on commercial vessels in the Strait of Hormuz, with UK Maritime Trade Operations citing nine incidents this month alone, and Saudi forces intercepting a Houthi ballistic missile targeting Khamis Mushait.

Compounding these supply risks, oil prices saw further gains on Wednesday as markets monitored a developing storm in the Gulf of Mexico, which forecasters warn could become the Atlantic's first hurricane of 2026 and threaten key US offshore energy infrastructure.

These surging crude prices have provided strong support for the commodity-linked Canadian Dollar (CAD) at the expense of the Euro. As persistent risks to global energy flows keep oil prices elevated, the resulting strength in the Canadian Dollar continues to drag the EUR/CAD cross lower.

United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann note that USD/JPY traded on a firm footing in early Asian trade as upward momentum continued to build. While the near-term bias remains tilted to the upside, they believe the pair lacks sufficient momentum to reach the major resistance at 158.70. Over the next 1–3 weeks, UOB continues to expect USD/JPY to trade within a 156.35–158.70 range.

Dollar-Yen firm but constrained

"24-HOUR VIEW: USD fluctuated between 157.41 and 158.29 on Monday and closed largely unchanged at 157.90 (+0.04%). Yesterday, we indicated that “the price action does not provide any clear directional clues.” We also indicated that USD “could trade between 157.55 and 158.45.” USD then traded within a range of 157.75/158.24. USD closed at 158.10 (+0.13%), but it traded on a firm note in the early Asian session today. Upward momentum is building, and the bias is on the upside. However, USD does not appear to have sufficient momentum to reach the major resistance at 158.70. To sustain the upside bias, USD must hold above 157.90, with minor support at 158.10. "

"1-3 WEEKS VIEW: We continue to hold the same view as Monday (05 Oct, spot at 157.65). As highlighted, rather than continuing to pull back within the previously expected 156.00/158.70 range, USD “is likely to trade in a range between 156.35 and 158.70.” "

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

• Silver price edges lower to near 60.60 as US Treasury Yields regain ground.
• US Treasury Yields recovers above 5.3% as oil prices bounce back.
• Danske Bank sees 10Y and 30Y US Treasury yields surging to 6%.

Silver price (XAG/USD) is slightly down to near $60.60 during the European trading session on Wednesday. The white metal faces marginal selling pressure as United States (US) Treasury Yields regain ground after a corrective move the previous day.

10-year US Treasury Yields are up 0.4% at 5.31%, at press time, close to their two-decade high of 5.35% posted last week.

Higher yields on US-backed securities diminish the appeal of non-yielding assets, such as Silver.

A recovery move in US bond yields has also lend support to the US Dollar. As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.33% higher at around 102.18.

Technically, a higher US Dollar makes the Silver price an unfavorable risk-reward bet for investors.

It seems that the return of buying interest in oil prices has staged a recovery in United States (US) Treasury Yields. The WTI Oil price has shown some signs of reversal from its monthly low of $86.32 posted on Tuesday. Energy products attract bids amid fears that a storm forming in the Gulf of Mexico would become the first Atlantic hurricane of 2026 within two days and would likely hit oil and gas producing facilities, Reuters report.

Analysts at Danske Bank have highlighted that US bond yields are in a longer-term uptrend not only supply of Treasuries but also from the hyperscalers. Against this setting, the bank cautions that “we do see the risk of 10Y and 30Y Treasuries hitting 6% as investors demand a higher premium for the long end,” underscoring concerns that term premia may need to rise further to clear upcoming issuance.

Silver Technical Analysis

In the daily chart, XAG/USD trades at $60.60, keeping a bearish near-term tone as it holds below the 20-day exponential moving average (EMA) at $62.71. The downside bias is reinforced by the Relative Strength Index (RSI) near 40, which suggests subdued bullish momentum and leaves the metal vulnerable to further weakness while it remains capped beneath the nearby EMA resistance.

On the topside, immediate resistance is located at the 20-day EMA at $62.71, and a sustained break above this level would be needed to ease the current bearish pressure and open the door for a more constructive recovery. On the downside, the October 2 low near 59.70 is the key support zone.

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

• Higher US Treasury yields and lingering inflation fears boost the US Dollar, weighing on the NZD/USD.
• Escalating Middle East tensions and rising crude oil prices reinforce global inflation and interest rate concerns.
• The RBNZ raised its cash rate to 2.75% to bring inflation toward its 2% target, with another hike expected by December.

NZD/USD depreciates after registering modest gains the previous day, trading around 0.5610 during the European hours on Wednesday. The currency pair is under downward pressure as the US Dollar (USD) gains strength, bolstered by a rebound in US Treasury yields ahead of the Federal Open Market Committee (FOMC) Meeting Minutes.

Treasury bonds remain under strain, with the 10-year note yielding over 5.30% and the 30-year yield holding near 5.69%. This yield environment is largely fueled by persistent inflation fears, expanding fiscal deficits, and a surge in AI-related debt issuance, all of which continue to weigh on investor sentiment.

Compounding these inflationary risks, crude oil prices have climbed higher due to escalating geopolitical conflict in the Middle East. Recent attacks on tankers in the Strait of Hormuz alongside ongoing clashes between Saudi forces and Houthi rebels have renewed global supply concerns. Higher energy costs reinforce expectations that central banks may keep monetary policy tight to counter lingering price pressures.

While the strong dollar benefits from these elevated oil prices and persistent rate-hike speculation, its gains may ultimately be capped. Recent weak US labor market data has tempered aggressive Federal Reserve tightening expectations, with the CME FedWatch tool currently pricing in only about a 22% chance of a rate hike at the Fed's upcoming October meeting.

The Reserve Bank of New Zealand (RBNZ) recently raised its official cash rate by 25 basis points to 2.75%, marking its second consecutive rate increase. This continued policy tightening reflects the central bank's ongoing efforts to push domestic inflation back down toward its 2% midpoint target. Looking ahead, financial markets are anticipating further monetary action. Money markets have fully priced in another rate hike by December, with investors closely watching the RBNZ's upcoming policy decision scheduled for October 28.

Technical Analysis:

In the daily chart, NZD/USD trades at 0.5610, extending its slide beneath both the short-term and medium-term exponential moving averages. The nine-period Exponential Moving Average (EMA) at 0.5634 and the 50-period EMA at 0.5760 both sit overhead, suggesting the pair remains firmly capped and reinforcing a bearish near-term bias. The 14-day Relative Strength Index (RSI) at 29.63 has slipped into oversold territory, hinting that while downside pressure dominates, the pace of the decline could begin to moderate rather than reverse decisively.

On the topside, immediate resistance is located at the nine-period EMA at 0.5634, with a stronger barrier at the 50-period EMA at 0.5760, which continues to frame the broader downtrend. On the downside, the oversold RSI reading around 29.63 acts as a warning that fresh selling into current levels may become less sustainable, yet the absence of nearby structural support on price charts leaves the pair vulnerable to further weakness while it trades below the aforementioned moving averages.

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

• AUD/USD drifts lower on Wednesday, snapping a three-day winning streak to a one-week top.
• Geopolitical risks and elevated US bond yields revive USD demand, weighing on spot prices.
• Receding RBA rate hike bets favor bears as the market focus remains on the FOMC Minutes.

The AUD/USD pair attracts some sellers on Wednesday, stalling a three-day recovery move from the 0.6900 neighborhood, or a three-month low, touched last week. Spot prices trade around the 0.6970-0.6965 region during the early European session amid a broadly firmer US Dollar (USD) as the focus remains glued to the FOMC Minutes.

Investors will look for more cues about the US Federal Reserve's (Fed) policy path as signs of moderating inflationary pressures and a cooling labor market tempered bets for an October rate hike. Meanwhile, the outlook would play a key role in influencing the near-term USD price dynamics. In the meantime, a combination of factors helps revive demand for the Greenback, which, in turn, is seen exerting some downward pressure on the AUD/USD pair.

The CME Group's FedWatch Tool indicates that traders are still pricing in around an 85% chance that the US central bank will raise borrowing costs by the end of this year. Furthermore, crude oil prices hold above a one-month low amid persistent geopolitical uncertainties, energy-driven inflation fears, and keeping US bond yields elevated near multi-year highs. This lends additional support to the safe-haven buck and backs the case for deeper AUD/USD losses.

Meanwhile, traders have sharply pared back bets on further policy tightening by the Reserve Bank of Australia (RBA) in the wake of softer inflation data and Governor Michele Bullock's less hawkish comments following the September rate hike. This further contributes to the offered tone surrounding the Australian Dollar (AUD). Moreover, the overnight failure ahead of the 0.7000 psychological mark validates the negative outlook for the AUD/USD pair.

AUD underperforms as softer Australia CPI print weighs on RBA expectations

Strategists at Brown Brothers Harriman highlight that the Aussie is lagging peers, noting that “AUD is underperforming after the softer monthly rise in Australia’s CPI weighed on RBA cash rate futures.” They point out that the latest inflation data undershot expectations, with “headline CPI rose 0.4% (consensus: 0.5%) to be up 4.0% y/y (consensus: 4.1%, prior: 3.5%), while trimmed mean CPI increased 0.2% m/m (consensus: 0.3%) to remain at 3.6% y/y for a third straight month.” This softer-than-forecast profile is seen as tempering market conviction around further RBA tightening and leaving the AUD on the back foot in the near term.

AUD/USD 4-hour chart

Technical Analysis

The AUD/USD pair keeps a bearish near-term bias beneath the 100-period Simple Moving Average (SMA) on the 4-hour chart and a dense Fibonacci retracement band overhead. Immediate resistance aligns at the 23.6% Fibo. retracement at 0.6983, followed by a broader cluster between the 38.2% retracement at 0.7032 and the 100-period SMA at 0.7039, which would need to be reclaimed to ease downside pressure. On the downside, initial support is located at the structural floor at 0.6905, where a break lower would reinforce the bearish tone and expose deeper losses in the coming sessions.

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

Rabobank strategist Molly Schwartz notes US Treasury yields fell across the curve, pressuring the US Dollar (USD) even as the US Dollar Index (DXY) stays close to 102. She highlights evolving Fed communication and multiple officials stressing inflation risks from AI, tariffs and energy. Rabobank expects one more Fed rate hike at the December 2026 FOMC meeting, followed by a prolonged hold through 2027.

Dollar pressured by lower yields

"US Treasury yields fell across the curve yesterday, with the 2-year yield declining 2.3bp from Monday’s close and the 10-year yield dropping 4.5bp to 5.26%. The move weighed on the USD, the third-worst-performing G10 currency of the day, but the DXY Index remains near its recent high of 102."

"San Francisco’s Mary Daly (an alternate voting member) noted that the coinciding forces of AI, tariffs, and energy may indicate the need for additional hikes. Her comments were later echoed by Schmid, who also opined on the persistence of inflationary pressures and said that the Fed is fighting not only to control inflation but also to maintain its credibility."

"For now, however, AI appears to be inflationary, particularly with respect to computer software and accessories, which have bucked the deflationary trend for the first time since 1998, with prices continuing to rise since the beginning of 2026. Rabobank is forecasting one more Fed hike at the December 2026 FOMC meeting, followed by a hold through 2027."

"In the US, the FOMC meeting minutes and the New York Fed’s 1-year inflation expectations are due, along with consumer credit data for August."

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

ING’s commodities team, led by Warren Patterson and Ewa Manthey, reports that Gold edged higher on Tuesday as lower Oil prices and stronger bond markets eased inflation concerns and reduced expectations of further rate hikes. They emphasize persistent central bank demand, with World Gold Council data showing continued net buying driven by long-term reserve diversification.

Official-sector demand underpins prices

"Gold edged higher on Tuesday, recovering early losses as lower oil prices and stronger bond markets eased inflation concerns and tempered expectations of further interest rate increases. Persistent central bank buying also continued to provide support."

"World Gold Council data showed central banks remained net buyers in August, adding 39 tonnes and bringing year-to-date purchases to 170 tonnes. China led purchases with 20 tonnes, extending its buying streak to 22 consecutive months, while Poland and Uzbekistan each added 8 tonnes to their reserves."

"Turkey returned as a net buyer in August, purchasing 3 tonnes after three consecutive months of net sales. Other buyers included Kazakhstan, the Czech Republic, Bolivia and Ghana. Russia reduced its gold holdings by 6 tonnes."

"The latest data suggests official-sector demand remains resilient despite elevated gold prices, with purchases continuing to be driven by longer-term reserve diversification objectives rather than short-term market movements."

"With China, Poland and several emerging-market central banks continuing to accumulate gold, official-sector demand is likely to remain an important source of support for the market in the months ahead."

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

• EUR/GBP pulls back from 0.8500, on track for a 1.6% sell-off in a nine-day losing streak.
• Brent Oil prices bounce up above $100, posing a significant strain on the Eurozone's economic growth.
• Bears are aiming for the 16-month lows at 0.8455.

The Euro (EUR) extends losses against the British Pound (GBP) on Wednesday, on track to complete a nearly 1.6% decline in a nine-day losing streak. A mild EUR/GBP recovery attempt found sellers at the 0.8500 area on Tuesday, sending the pair back to the 0.8475 area, with the 16-month low, at 0.8455, on sight.

The Euro bounced up from levels just above the year-to-date lows on Tuesday as France’s benchmark 10-year OAT yields fell 17 basis points, following far-right Marine Le Pen’s plan to slash France’s government costs by 140 billion over the next five years. Le Pen is the best positioned to win next year’s presidential elections, and her comments provided some confidence to markets and triggered a rebound on Euro crosses.

Euro’s strength, however, has been short-lived. Fresh attacks of the Iran-backed Houthis in Saudi Arabia have pushed Oil Prices higher, with Brent Oil crossing the key $100 level, and adding pressure on the Eurozone’s economy. Against this background, the positive surprise in German Industrial Production data has gone practically unnoticed.

Technical Analysis: Key support at the 0.8455 area remains on the bears' target

EUR/GBP trades at 0.8473, maintaining the bearish structure from late September highs in place. Momentum indicators on the 4-hour charts are mixed, with the Moving Average Convergence Divergence (MACD) still at marginally positive levels, although the Relative Strength Index (14), at 30.8, is just above oversold territory, which suggests that upside attempts are likely to face pressure.

Tuesday's rejection at 0.8493 leaves the mentioned 16-month low, at 0.8455 (July 15 low), exposed. Further down, the early June 2025 lows, around 0.8410, seem like a plausible target. On the upside, a confirmation above 0.8500 would ease bearish pressure and shift the focus towards the October 2 high at 0.8527, ahead of a previous support area, now turned resistance around 0.8550.

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

Commerzbank’s Antje Praefcke notes that concerns over France’s national debt have recently weighed on the Euro, reviving memories of the earlier sovereign debt crisis. She argues fiscal consolidation in some Euro zone countries is both difficult and unpopular, so credibility will be hard to restore quickly. With the resilient US economy and limited new data, the Dollar is expected to remain in demand as EUR/USD struggles.

Euro pressured by French debt worries

"We’ve seen in recent days, amid concerns about France’s national debt, just how quickly doubts about the credibility of governments can weigh on the euro. That said, the focus is definitely more on the bond market than on the foreign exchange market. Nevertheless, for some who were already in the market back in the 2010s, memories of the sovereign debt crisis came flooding back: Long nights spent waiting for massive bailout packages and, at times, a drastic weakening of the euro."

"Meanwhile, the ECB is remaining fairly tight-lipped regarding long-term yields and yield spreads in the euro zone. In any case, it is likely to wait and see before considering rushing to France’s aid with a program, especially since the situation has eased again. But with concerns about France’s public finances, the euro has lost some of its luster, and it is unlikely to regain it anytime soon."

"At the same time, the US economy continues to show resilience. The weaker-than-expected US jobs report has not left any lasting impact on the US dollar, and both the ISM manufacturing index and the services index remain in expansionary territory. As such, there is no reason for a revaluation of the US dollar, especially since no major economic data releases are on the agenda in the coming days."

"In this regard, the dollar is likely to maintain its position for the time being and remain the currency in greater demand, even though the euro is currently the focus of attention but urgently needs fiscal credibility to regain ground."

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

• The Indian Rupee declines against the US Dollar, following the RBI’s monetary policy decision.
• The RBI has raised its key Repo Rate by 25 bps to 5.5%.
• India’s central bank shifts policy stance to 'calibrated tightening' from 'neutral'.

The Indian Rupee ((INR) weakens significantly against the US Dollar (USD) after a muted response, following the Reserve Bank of India’s (RBI) monetary policy meeting on Wednesday. The USD/INR pair jumps to near 96.72, the highest level seen in four months.

What happened at the RBI policy meeting?

In the policy meeting, the RBI decide to hike its Repo Rate by 25 basis points (bps) to 5.5%, the first hike since February 2023.

RBI Governor Sanjay Malhotra said in the monetary policy statement that the Monetray Policy Committee (MPC) decided to change policy stance to 'calibrated tightening' from 'neutral', siganling that the period of easy liquidity is over. On the inflation front, the Indian central bank has raised FY 27 retail Consumer Price Index (CPI) projections to 5.2% Year-on-Year (YoY) from 5% previously forecasted.

Regarding the global economic outlook, Malhotra said that “higher US Dollar, Middle East tensions, and trade uncertainty to keep global sentiment under pressure”. On the domestic front, Malhotra said,  "NBFC growth rate has been quite robust, about 27% credit growth by banks to NBFCs and NBFC credit growth itself is also quite robust."

The RBI was already anticipated to hike interest rates even as inflationary pressures have remained well inside the central bank’s tolerance band of 2%-6%.

Strategists at Brown Brothers Harriman (BBH) said before the policy announcement that the “RBI to hike to defend INR and respond to stronger growth, with Q2 real GDP of 7.8% y/y beating the bank’s 6.4% forecast.”

Upbeat US Dollar also supports USD/INR pair

The US Dollar regains ground after a corrective move the previous day. As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.18% higher at around 102.00.

Going forward, investors will focus on the Federal Open Market Committee (FOMC) minutes of the September policy meeting, which will be published at 18:00 GMT. In the policy meeting, the Fed hiked interest rates by 25 basis points (bps) and signaled at least one more this year.

The impact of FOMC minutes is expected to be limited on Fed interest rate expectations for the October meeting, as officials have already signlaed no urgency for another interest rate hike. However, they have ruled out the possibility of an additional hike in the remaining year.

According to the CME FedWatch tool, there is an almost 86% chance that the Fed will deliver at least one more interest rate hike by the year-end.

USD/INR Technical Analysis

In the daily chart, USD/INR trades at 96.72. The pair maintains a bullish near-term bias as price holds above the 20-day exponential moving average (EMA) at 95.99, keeping the short-term trend supported. The Relative Strength Index (14) at 72.95 has entered overbought territory, hinting that while upside momentum is strong, the advance could be prone to consolidation or a mild pullback.

On the downside, immediate support is seen at 96.30 area as a near-term pivot, followed by the 20-day EMA at 95.99, which reinforces the broader constructive structure as long as it holds. On the upside, the pair approaches the all-time high near 97.00.

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