Forex News
- EUR/GBP is drifting in a narrow band just below its recent highs, with neither side able to force a break.
- The Euro's next test comes Tuesday with German GDP and IFO business surveys.
- A bare UK calendar leaves the Pound passive, handing near-term direction to the German releases and the broader risk mood.
The Euro (EUR) treads water against the Pound Sterling (GBP) on Monday, holding in the mid-0.8500s after struggling to sustain its push toward 0.8580 last week.
The range is unlikely to break without a fresh catalyst, and the most immediate one sits on the Euro side. Germany publishes second-quarter Gross Domestic Product (GDP) on Tuesday, expected to remain subdued, alongside the closely watched IFO business surveys. The headline IFO Business Climate index is expected to edge up to 87.2 in August from 86.6, with the current-conditions and expectations gauges also pointing higher.
On the other side, there is little on the UK docket to give the Pound its own lead. That leaves the cross to trade off the relative outlook for the European Central Bank (ECB) and the Bank of England (BoE), and for now Sterling is holding firm enough to cap any Euro rebound.
Short-term technical analysis:
On the 4-hour chart, EUR/GBP trades at 0.8559, holding right on the 100-period simple moving average (SMA) while remaining capped beneath the 20-period SMA at 0.8567. This configuration, together with a Relative Strength Index (RSI) at 46.5 slipping below the midline, suggests a mildly bearish near-term tone, with upside attempts likely constrained by nearby overhead supply.
On the topside, immediate resistance is seen at the horizontal barriers clustered around 0.8560 and 0.8561, followed by the 20-period SMA at 0.8567, which reinforces the corrective cap. On the downside, initial support emerges at 0.8554, ahead of the lower horizontal floor at 0.8551; a break under this zone would open the door to a deeper pullback within the current range-bound structure.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
United States (US) Treasury Secretary Scotts said on Monday the US is launching "an economic onslaught against Iran's financial connections around the globe". At a press conference, Bessent outlined plans to launch an " economic D-Day" on Iran and stated the United States would pursue a "zero leakage" approach to enforcing its sanctions.
He added that President Donald Trump is personally calling world leaders to press them to cut economic ties with Tehran. Bessent said every country has been given a defined timeline to shut down activities the Treasury has identified, including closing Iran's bank branches abroad. Where governments fail to act, he said, the US would move unilaterally through Treasury authorities. He made clear the pressure extends to the largest economies, stating that no one, including China, is above the reach of US sanctions.
Ahead of Bessent's remarks, the Treasury released a statement on its actions against Iran, which include sanctions on nearly 60 Iran-linked entities, people and vessels. It said the sanctions target a network of broker companies that shadow fleet vessels across the United Arab Emirates, Hong Kong, China, Singapore, Switzerland and Europe.
Bessent said Washington does "not have infinite patience" with Iran, that trying to buy the country's appeasement "will no longer work," and that any economic engagement would expose those responsible to the "full reach of American power." He added that he expects other countries to take similar steps to isolate Tehran.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.17% | 0.11% | 0.10% | 0.66% | 0.36% | 0.37% | 0.19% | |
| EUR | -0.17% | -0.04% | -0.06% | 0.49% | 0.21% | 0.26% | 0.03% | |
| GBP | -0.11% | 0.04% | 0.00% | 0.55% | 0.25% | 0.31% | 0.07% | |
| JPY | -0.10% | 0.06% | 0.00% | 0.60% | 0.17% | 0.26% | 0.06% | |
| CAD | -0.66% | -0.49% | -0.55% | -0.60% | -0.38% | -0.22% | -0.47% | |
| AUD | -0.36% | -0.21% | -0.25% | -0.17% | 0.38% | 0.07% | -0.15% | |
| NZD | -0.37% | -0.26% | -0.31% | -0.26% | 0.22% | -0.07% | -0.23% | |
| CHF | -0.19% | -0.03% | -0.07% | -0.06% | 0.47% | 0.15% | 0.23% |
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).
Scotiabank strategists Shaun Osborne and Eric Theoret note that the Japanese Yen (JPY) is slightly softer versus the US Dollar (USD), with USD/JPY trading between 158.00 support and resistance in the upper‑159s. Market attention is moving from past intervention toward fundamentals ahead of the September 18 BoJ meeting, where about 20 bps of tightening is priced, offering some scope for near‑term JPY strength.
Yen steady as BoJ meeting nears
"The JPY is soft, down a fractional 0.1% vs. the USD and a mid-performer among the G10 currencies as we head into Monday’s NA session."
"The market narrative appears to be shifting from the official intervention that dominated through much of the summer with participants now tightening their focus on fundamentals into the September 18 BoJ meeting."
"The meeting is currently priced for about 20bpts of tightening, offering some scope for additional near-term strength."
"Greater risk lies with the central bank’s tone as policymakers manage expectations for the rate path into year-end and into early 2027."
"Price action in USDJPY has been relatively muted, with support bound between 158.00 support and resistance in the upper 159s."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- DXY trades near 99.00, roughly 2.8% under the late-June peak just shy of 102.00.
- Spending down a 950 billion Dollar Treasury account injects bank reserves.
- The bounce off the 98.50 area runs less than half a percent.
A currency whose central bank has held five times, prices no cut this year and still carries an increase by December should not be sitting at the bottom of its three-month range. The Dollar Index trades near 99.00, up 0.15% and roughly 2.8% beneath its late-June peak, beneath a 200-day Exponential Moving Average (EMA) near 99.50 and a 50-day parked on the 100.00 handle. The rate story stopped paying somewhere in the middle of this month.
Where the Dollars are coming from now
The break that matters is five sessions old and it did not come from the Federal Reserve. The index lost a 200-day EMA it had held through the summer across August 19 and 20, the sessions that carried the Treasury's move to double the ceiling on its long-end bond buybacks, and it has not traded back above the line since. That was read at the time as a bond story.
Today put a size on the programme. The Treasury General Account (TGA), the government's operating balance at the Federal Reserve, is considered available to fund the purchases, and it stands near 950 billion Dollars against the 550 to 600 billion Dollar working level of the previous administration. Every Dollar that leaves that account arrives in the banking system as reserves, and with the overnight reverse repo facility long since drained there is nothing left to absorb the flow.
Easing without a vote
Spend a fraction of that balance and the effect on Dollar liquidity compares with a rate cut, delivered without a meeting, a statement or a dissent. The policy rate would sit exactly where it is at 3.50% to 3.75%, while the quantity of Dollars in the system rises. That is a distinction the currency has begun to price and the front end has not.
The funding side compounds it. Long-dated coupons are bought back and refunded at the front of the curve, so the average maturity of the borrowing shortens and a rising share of the debt reprices with the policy rate. Short bills are the closest thing the Treasury issues to base money, so an issuer converting duration into bills is running an easing operation from the fiscal side of the street.
The tell in today's tape
This session makes the point cleanly. The ten-year yield fell more than three basis points to 4.70% and the thirty-year shed more than four to near 5.23%, and the Dollar Index gained anyway. Falling US yields alongside a firmer Dollar is not what a rate-differential model produces. It is what happens when the yield falls because the issuer is buying, which tells you about the price of the bond rather than the appetite for the currency.
The demand side gets a threat too
At 18:00 GMT the Treasury Secretary unveils what the administration has trailed as the largest financial offensive ever mounted against Iran, with the warning aimed squarely at the countries still lifting Iranian barrels. The largest of those is China. Tehran's national security chief has already said that any state joining the measures commits an act of war.
Secondary sanctions work by making the Dollar payment system dangerous to use, which is a serviceable tactic and a poor advertisement. Foreign holdings of Treasuries fell in June with the United Kingdom, China and Japan each trimming, and the message to those same accounts this week is that they should hold more of the paper and expect to be policed over their energy purchases.
This week's tests
Wednesday at 12:30 GMT carries the July Personal Consumption Expenditures (PCE) price index, the core measure seen at 0.2% MoM from 0.1% with the annual rate holding at 3.3%, alongside preliminary second-quarter Gross Domestic Product (GDP) figures the consensus expects to be revised by nothing at all. Personal spending is seen at 0.2% from 0.3%.
Friday carries the currency's real risk. The Fed Chair speaks at 14:00 GMT from the annual symposium, and the Bureau of Labor Statistics (BLS) publishes the preliminary benchmark revision to the payroll survey in the same minute. A hawkish Chair reading out a labour-market history that has just been cut is the awkward combination, and the 2024 preliminary revision took 818K jobs off the count.
Levels
Resistance: 99.00 is the line this bounce has stalled against, with the 200-day EMA near 99.50 above it and the 50-day sitting on the 100.00 handle. A daily close through the EMA band is the only thing that reopens 100.50.
Support: The session low sits near 98.75 and the 98.50 area carried the low of the move, beneath which this window offers no reference at all. The daily Stochastic Relative Strength Index (Stoch RSI) near 20 is oversold and turning, which explains the bounce and not its stopping point.
Bias: Bearish while the 200-day EMA near 99.50 caps. Objectives the 98.50 area, then a look beneath it. Invalidation on a daily close above 99.50.
DXY daily chart
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
- DJIA trades near 53,400, up more than 160 points but still 2.4% beneath the record.
- The Treasury's 950 billion Dollar cash account is available for bond buying.
- Sanctions conference at 18:00 GMT, Hormuz traffic near a fifth of prewar.
The same department that spent the morning telling the bond market it has roughly 950 billion Dollars available to hold long yields down will spend the afternoon announcing sanctions designed to tighten the oil chokepoint that drove those yields up. The Dow Jones Industrial Average trades near 53,400 on the first half of that arrangement, up more than 160 points and 0.3%, while the S&P 500 and the Nasdaq Composite both sit lower.
The account that changes the arithmetic
On August 19 the Treasury doubled the ceiling on its long-end buyback operations to at least 4 billion Dollars a pass, and the long end rallied and then handed most of it back inside the session. The fade was arithmetic rather than scepticism. Four billion Dollars at a time, against a 20-to-30-year sector that has run a buyers' strike since late June, is not a bid but a gesture.
Two senior officials have now attached a number to it. The Treasury General Account (TGA), the government's operating balance at the Federal Reserve, is considered available to fund the purchases, and it stands near 950 billion Dollars. That is some 350 billion Dollars above the working level the account was run at under the previous administration, and every Dollar leaving it arrives in the banking system as reserves.
A bill for every bond
Repurchasing a thirty-year bond does not retire debt. It swaps one government liability for another, and the money comes from selling short-dated paper, which shortens the average maturity of the borrowing. The Treasury Secretary has called the operation a twist, which is the honest name for it.
The consequence arrives Friday. The more of the debt that floats at the front of the curve, the more of the federal interest bill floats with the policy rate, so a department that has just made itself a large buyer of duration now holds a direct financial stake in what the Fed Chair says in Wyoming. Interest expense has already run past 1.1 trillion Dollars this fiscal year, against a July shortfall of 432.3 billion Dollars.
The afternoon half
At 18:00 GMT the Treasury Secretary unveils what the administration has trailed as the largest financial offensive ever mounted against Iran, with a weekend opinion piece promising an economic reckoning and a warning pointed at the countries still lifting Iranian barrels. Tehran's national security chief has answered that any state joining the measures commits an act of war.
The mechanism that reaches an equity index is the barrel. Traffic through the Strait of Hormuz runs near a fifth of its prewar average, Tehran is threatening to fine, seize or confiscate vessels that break its transit rules, and American pump prices sit roughly a Dollar a gallon above last year. Measures that succeed in cutting Iranian export revenue tighten the same physical market that has kept the long end selling all summer.
What the index actually did
Underneath the announcements the session was a semiconductor rout. The benchmark chip fund fell close to 3%, Micron Technology (MU) shed more than 5%, and Advanced Micro Devices (AMD) and Broadcom (AVGO) both gave ground, with optical and storage names following them down. None of it reaches this average, because the only chip name inside the thirty is Nvidia (NVDA).
That membership fact is the entire distance between an index up more than 160 points and two others that are lower, which makes the session useless as a read on the economy, though the shape of it says something. The high printed just short of 53,500 inside the first quarter hour after the New York open and the low near 53,100 came in the late London morning, leaving a tape parked in front of an 18:00 GMT headline.
The week the calendar catches up
Wednesday at 12:30 GMT brings the July Personal Consumption Expenditures (PCE) price index, with the core measure seen at 0.2% MoM from 0.1% and the annual rate holding at 3.3%. Preliminary second-quarter Gross Domestic Product (GDP) figures land in the same block and the consensus looks for no revision at all, 1.5% annualised with the price index at 6.3%. Nvidia reports from inside the index that evening.
Friday is the collision worth marking. The Fed Chair speaks at 14:00 GMT from the annual symposium, and in the same minute the Bureau of Labor Statistics (BLS) publishes the preliminary benchmark revision to the payroll survey, the annual reconciliation of a sample against employer tax records. The 2024 preliminary estimate took 818K jobs off the count, and this one lands on a labour market that has already contracted once.
Levels
Resistance: Just short of 53,500 carried the session high and is the first line, with the 53,800 area the cap that has turned back every attempt since the middle of the month. Above it sit the 54,100 ledge and the record just short of 54,750.
Support: The 53,100 area held the session low, with the 53,000 handle beneath it and a rising 50-day Exponential Moving Average (EMA) near 52,600 under that. The daily Stochastic Relative Strength Index (Stoch RSI) sits mid-range near 55 and pointing lower.
Bias: Bearish while the 53,800 area caps. Objectives the 53,100 area, then the 53,000 handle. Invalidation on a daily close above 53,800.
Dow Jones daily chart
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
- Bessent warns Tehran of economic D-Day, supporting the US Dollar.
- Iran threatens to cut Oil exports if economic war continues.
- Warsh speech and Core PCE drive next Fed catalyst.
The Pound Sterling (GBP) holds firm against the US Dollar (USD) at around 1.3640 on Monday, with traders eyeing speeches by US Treasury Secretary Scott Bessent on Iran’s sanctions later in the day and by Federal Reserve (Fed) Chair Kevin Warsh at the Kansas City Fed Jackson Hole Symposium on Friday. The GBP/USD pair trades barely unchanged after opening with a bearish gap.
GBP/USD steadies as Dollar gains on renewed geopolitical risk
Developments over the weekend keep the Grenback bid. US Treasury Secretary Bessent wrote an article in the Financial Times, warning Tehran that an economic D-Day is coming and stating that countries linked to the regime could face retaliation by Washington.
Bessent is expected to delve deeper into Iran at a press conference, followed by a Q&A session, at around 17:00 GMT.
Iran’s answer to Bessent's column was that “If the economic war continues, not a single drop of oil will be exported, neither through the Strait of Hormuz nor from anywhere in the Persian Gulf.”
In the meantime, the US Dollar Index (DXY), which tracks the buck’s value against a basket of six currencies, is up 0.15% at 98.98, capping Sterling’s advance.
On Monday, the US economic docket is absent, but it will gather pace on Tuesday, with housing data and the Conference Board's Consumer Confidence. On Wednesday, Gross Domestic Product (GDP) figures are eyed, along with Durable Goods Orders, followed the next day by the Fed’s inflation gauge, the Core PCE
On Friday, traders will digest Warsh’s speech, which is not expected to provide forward guidance regarding interest rates. However, if he updates his economic outlook, he could offer clues about the economic outlook.
In the UK, Prime Minister Andy Burnham told European Council President Antonio Costa that Great Britain will be bolder in closing ties with the European Union (EU).
In the meantime, GBP/USD appreciated in the short term, even though investors see no chance of a rate hike by the Bank of England at the September meeting. The odds are 78% of holding rates, but for the December meeting, the chances are also 78% of a 25-basis-point increase, according to Prime Terminal.
GBP/USD Price Forecast: Technical outlook
In the daily chart, GBP/USD trades at 1.3634, extending its advance above the cluster of reclaimed trend lines and the simple moving average triple around 1.3400, which now underpin a bullish near-term bias. The pair holds comfortably over the upward support lines drawn from 1.3159 and 1.3140, while the Relative Strength Index (14) at 69.3 flirts with overbought territory, suggesting strong but potentially stretched upside momentum rather than immediate exhaustion.
On the downside, initial support aligns near 1.3622 at the more recent rising trend line, ahead of a broader demand band between the reclaimed downward line at 1.3493 and the former resistance trend break at 1.3400, reinforced by the simple moving average cluster at 1.3399 and the older upward support trend around 1.3382. With no well-defined resistance levels in the immediate data set, the pair would likely remain constructive as long as it holds above this layered support zone, though overbought daily momentum warns that any pullback could first test these trend and moving average floors.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.10% | 0.08% | 0.08% | 0.53% | 0.27% | 0.30% | 0.12% | |
| EUR | -0.10% | 0.00% | 0.00% | 0.45% | 0.19% | 0.26% | 0.04% | |
| GBP | -0.08% | -0.00% | 0.02% | 0.46% | 0.18% | 0.27% | 0.04% | |
| JPY | -0.08% | 0.00% | -0.02% | 0.51% | 0.12% | 0.22% | 0.03% | |
| CAD | -0.53% | -0.45% | -0.46% | -0.51% | -0.34% | -0.17% | -0.41% | |
| AUD | -0.27% | -0.19% | -0.18% | -0.12% | 0.34% | 0.08% | -0.13% | |
| NZD | -0.30% | -0.26% | -0.27% | -0.22% | 0.17% | -0.08% | -0.22% | |
| CHF | -0.12% | -0.04% | -0.04% | -0.03% | 0.41% | 0.13% | 0.22% |
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 British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
Brown Brothers Harriman’s (BBH) Elias Haddad expects Canada’s Q2 Real GDP to rebound strongly, outpacing the Bank of Canada’s (BoC) projection, with domestic demand and exports driving gains. However, the deepening US–Canada trade war and new 50% tariffs on about 0.85% of Canada’s GDP threaten this recovery. Haddad notes core inflation near target allows the BoC to hold rates, implying downside adjustment in CAD rate expectations.
Q2 GDP rebound faces tariff risks
"Canada’s economy is expected to recover in Q2 boosted by domestic demand and exports (Friday). Real GDP is seen rising 3.4% SAAR vs. -0.1% in Q1, which would be stronger than the Bank of Canada’s (BOC) 2.5% projection. Statistics Canada’s advanced July GDP estimate will also offer an early read on Q3."
"However, the worsening US-Canada trade war risk derailing the growth rebound. Tade talks between the two countries collapsed on Friday, triggering a fresh round of tariffs. 50% tariffs on nearly $20 billion in imports from Canada (0.85% of Canada’s GDP) kicked in on Saturday."
"The tariff applies to a range of products from wine to hockey sticks to cement. The tariff does not apply to energy, potash, products subject to tariffs under Section 232, and other goods like fish or critical minerals. Canada will match the new US tariffs dollar for dollar from September 8."
"Encouragingly, the BoC can afford to keep rates on hold to support economic activity because core inflation remains close to the 2% target. As such, there is room for the swaps curve (which implies 75bps of tightening in the next twelve months) to adjust lower against CAD in the near term."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- The New Zealand Dollar retreats after failing to hold near 0.6000.
- New Zealand retail sales fell 0.5% in the second quarter, against expectations for a 0.1% increase.
- New US sanctions against Iran fuel risk aversion and could limit appetite for risk-sensitive currencies.
NZD/USD retreats to around 0.5960 on Monday at the time of writing, down 0.25% on the day, after approaching the 0.6000 level on Friday. The New Zealand Dollar (NZD) loses ground following the release of weaker-than-expected domestic consumption data, while geopolitical tensions surrounding Iran maintain a cautious mood across markets.
New Zealand Retail Sales contracted by 0.5% in the second quarter, while markets had expected a 0.1% increase. The decline marks the first contraction in nearly two years and follows a 0.1% rise in the previous quarter, suggesting that household consumption is losing momentum.
The figures provide a negative signal for the New Zealand economy and weigh on the Kiwi, as weaker domestic demand could strengthen the case for a less hawkish monetary policy stance from the Reserve Bank of New Zealand (RBNZ).
On the US side, attention turns to Washington's foreign policy. The United States (US) Treasury Department is expected to broaden on Monday the scope of secondary sanctions that could target countries and entities maintaining business ties with Iran. According to Reuters, US President Donald Trump's administration is seeking to increase economic pressure on Tehran after nearly six months of conflict that has disrupted the Strait of Hormuz and Gulf energy exports.
US Treasury Secretary Scott Bessent is due to detail the measures on Monday and provide a broader overview of the economic pressure campaign described as an "economic D-Day" by the Trump administration. The new measures are expected to allow the US to make activities in certain Iranian sectors subject to secondary sanctions and threaten affected companies with exclusion from the US Dollar-based (USD) financial system.
The prospect of tighter sanctions maintains geopolitical uncertainty and risk aversion, an environment that is generally unfavorable for the New Zealand Dollar due to its sensitivity to investor sentiment.
The US Dollar nevertheless faces headwinds of its own. Markets continue to assess the monetary policy outlook of the Federal Reserve (Fed), while concerns over US debt limit the Greenback's appeal. This weakness in the US Dollar could help contain the decline in NZD/USD despite disappointing New Zealand data.
Kiwi rate path seen higher but NZD upside capped as RBNZ tightening priced in
Brown Brothers Harriman notes that markets are already firmly positioned for further RBNZ tightening, with “the next RBNZ policy decision, which also includes a fresh Monetary Policy Statement, on September 2 and a 25bps back-to-back hike to 2.75% virtually fully priced-in.” Strategists add that “over the next twelve months, the swaps curve implies 75bps of tightening to 3.25%. That’s reasonable given above target inflation and a policy rate near the lower-end of the RBNZ’s neutral range (2.20%-4.10%).” However, they caution that “still, NZD/USD upside is limited as the cross has already outrun rate differentials,” suggesting that even a continued hawkish stance from the RBNZ may not translate into significant further gains for the Kiwi.
NZD/USD technical analysis
In the one-hour chart, NZD/USD trades at 0.5960, retaining a bearish near-term tone as it holds beneath a descending trend-line resistance at 0.5969 and the horizontal barrier at 0.5989. The pair still trades above the 100-hour simple moving average (SMA) at 0.5938 and the 200-hour SMA at 0.5908, which suggests underlying demand, but the latest pullback from overbought conditions, with the Relative Strength Index (RSI) easing toward 40, hints at fading upside momentum while the pair remains capped by nearby resistance.
On the downside, initial support aligns with the recent price floor at 0.5940, ahead of the 100-hour SMA at 0.5938 and a lower horizontal level at 0.5925, while deeper bearish extension would expose the 200-hour SMA at 0.5908. On the topside, bulls would need to reclaim the descending trend-line resistance at 0.5969 first, with a sustained break then targeting the horizontal resistance at 0.5989 as the next hurdle.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
- Gold extends last week’s strong rally and climbs to its highest level since May 14.
- Traders await US PCE inflation data and Fed Chair Kevin Warsh’s Jackson Hole speech later this week.
- XAU/USD keeps a bullish technical bias above key daily moving averages, though the RSI signals overbought conditions.
Gold (XAU/USD) remains firmly bid on Monday after last week’s rally sparked by the US Treasury’s buyback announcement. However, buyers appear hesitant to push prices much higher as traders await key risk events later this week. At the time of writing, XAU/USD trades around $4,663, up nearly 1.3% on the day after hitting an intraday high of $4,681, its highest level since May 14.
The Treasury’s decision to increase its liquidity-support buybacks for longer-dated government bonds weighed heavily on the Greenback, with the US Dollar Index (DXY) plunging to a three-month low. Gold received a double boost from the move, benefiting from a weaker USD while also attracting safe-haven demand as investors focused on concerns surrounding US fiscal policy and rising government debt.
Strategists at OCBC highlight that “USD debasement has re-emerged as a market theme” after the US Treasury unexpectedly expanded its long-end buyback programme, a move they say signals “discomfort with the recent rise in long-dated yields.” They add that the “resulting unwind of US steepener positions has likely reinforced other debasement trades, including a weaker USD, a rebound in gold and higher US inflation breakevens.”
The Greenback is modestly firmer on Monday after last week’s sharp decline. The US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, trades around 98.96, up about 0.12% on the day.
Geopolitical tensions are back in focus as US Treasury Secretary Scott Bessent prepares to announce fresh sanctions on Iran. Tehran has warned that if Washington’s “economic war” continues, it could halt Oil exports through the Strait of Hormuz and elsewhere in the Persian Gulf, keeping energy-driven inflation risks at the forefront.
Markets will turn their focus later this week to the July Personal Consumption Expenditures (PCE) Price Index due on Wednesday before Federal Reserve (Fed) Chair Kevin Warsh speaks at the Jackson Hole Symposium on Friday.
Investors will watch the PCE report closely to assess whether the recent moderation in inflation is enough for the Fed to leave interest rates unchanged again at its September meeting, with the CME FedWatch Tool showing around a 38% probability of a rate hike.
Technical analysis: Buyers hold the upper hand as RSI turns overbought
XAU/USD maintains a bullish near-term bias as price holds above both the 200-day simple moving average (SMA) and the 100-day SMA. The metal is advancing within a strong uptrend, supported by a moderately firm Average Directional Index at 33, while the Relative Strength Index (RSI) on the daily chart at 72 has entered overbought territory, hinting that upside momentum is stretched but still dominant.
A positive Moving Average Convergence Divergence (MACD) reinforces the constructive tone, with the broader structure favoring further gains as long as price stays above the key moving averages and upper Fibonacci supports.
On the topside, initial resistance is located at the 78.6% Fibonacci retracement at $4,685, followed by the cycle high anchor near the 100.0% retracement at $4,886. On the downside, first support is seen at the 61.8% retracement at $4,528, closely backed by the 200-day SMA at $4,517, forming a nearby demand cluster.
Deeper support levels emerge at the 50.0% retracement at $4,417 and the 100-day SMA at $4,380, with additional structural floors at the 38.2% retracement at $4,307 and the 23.6% retracement at $4,170, where buyers would likely attempt to defend the broader bullish trend if a corrective pullback unfolds.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
- The RBA Minutes are due later in the Asian session and are expected to echo August's hawkish hold.
- Governor Bullock has kept the Middle East conflict front and center as the main upside risk to inflation.
- Treasury Secretary Bessent is due to announce new Iran sanctions in the late American session.
AUD/USD is pulling back to the 0.7150 region, consolidating just below its recent multi-month highs. Traders are largely focused on the Reserve Bank of Australia (RBA) Minutes due later in the Asian session.
At its August meeting, the RBA left the cash rate target at 4.35%, a unanimous decision that came after three hikes earlier in the year. Governor Michele Bullock used the press conference to describe policy as "restrictive and tight" and to make clear the board "did not discuss a rate cut"; the only options considered were a hike or a hold.
Traders will comb the account for any sign the board is softening its line or edging toward the cuts the market had been expecting heading into 2027. Based on the decision and the presser, there is little reason to expect a dovish tilt, and a Minutes set that simply confirms the hawkish hold would keep Australian yields, and the Aussie, supported near the highs.
The US Treasury is expected to broaden the secondary sanctions it can impose on entities and countries that maintain business ties with Iran, according to sources familiar with the matter and Reuters. The measure aims to limit Tehran's exports and keep the near-six-month conflict around the Strait of Hormuz contained.
Technical analysis:
In the 4-hour chart, AUD/USD trades at 0.7153, retaining a constructive bullish tone as it holds above both the 20-period Simple Moving Average (SMA) at 0.7138 and the 100-period SMA at 0.7073. The pair is pressing into a tight overhead band, with nearby horizontal resistance levels at 0.7158 and 0.7167, while the Relative Strength Index (RSI 14) around 60 suggests positive but not overextended momentum that could favor further probes higher as long as these supports remain intact.
On the downside, initial support aligns at the 0.7149 horizontal level, ahead of the 20-period SMA at 0.7138 and the deeper 100-period SMA support near 0.7073. On the topside, a sustained break above 0.7158 would expose the next resistance hurdle at 0.7167, with a further barrier waiting at 0.7177, where buying pressure would need to strengthen to extend the current advance.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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