Forex News

Forex News

News source: FXStreet

Oct 13, 14:59 HKT

Oil: Market focuses on Persian Gulf risks – ING

ING strategists Warren Patterson and Ewa Manthey note that Oil prices remain supported as traders focus on Middle East and Persian Gulf supply risks rather than the Russia-Ukraine energy ceasefire. Brent has pushed back toward $107/bbl, while hurricane-related disruptions in the Gulf of Mexico and Saudi plans to expand pipeline capacity add further supply-side complexity for the market.

Brent supported by supply concerns

"The weakness in the oil market following President Trump’s announcement of an energy ceasefire between Russia and Ukraine was short-lived. That goes, too, for the US-Russia diesel export deal. ICE Brent settled 1.8% higher, just shy of $107/bbl yesterday — the highest close since mid-September."

"Clearly, the market is more concerned over recent developments in the Middle East, with Houthi attacks on Saudi Arabia and the lingering risks to oil flows from the Persian Gulf."

"While diesel initially saw some weakness following the US-Russia deal, strength has returned. The volumes suggested are doing little to offset the tightness in the global middle distillate market."

"The Persian Gulf could see further bypass volumes in a relatively short time period. The Saudi Energy Minister said that the country is looking to expand its pipeline export capacity to 10m b/d, up from a current 7m b/d."

"Meanwhile, hurricane activity in the Gulf of Mexico continues to disrupt offshore operations for US producers; they’ve shut in almost 605k b/d of oil production, which is equivalent to nearly 30% of total US production in the Gulf of Mexico, according to the Marine Minerals Administration."

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

Oct 13, 14:59 HKT

Forex Today: US Dollar retreats from 18-month high as bond yields, oil prices ease

Here is what you need to know on Tuesday, October 13:

The US Dollar Index (DXY) retreats from a 18-month high to around 102.35 after a holiday in some US markets. Yields on the 10-year Treasury bond ease, while oil prices drop. The US ADP Employment and Existing Home Sales data will be released later in the day. Attention will shift to the US Consumer Price Index (CPI) inflation report on Wednesday, followed by Producer Price Index (PPI) and Retail Sales data on Thursday. These reports could provide further direction on the Federal Reserve’s (Fed) policy path.

Markets are now pricing in nearly an 80.6% probability that the US central bank will hold rates steady in its October policy meeting, but are pricing in an 84.7% odds of an increase at the final meeting of the year in December, according to the CME FedWatch tool.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Japanese Yen.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.21%	-0.14%	-0.32%	-0.11%	-0.09%	-0.21%	-0.24%
EUR	0.21%		0.06%	-0.12%	0.11%	0.11%	0.01%	-0.03%
GBP	0.14%	-0.06%		-0.21%	0.00%	0.04%	-0.09%	-0.09%
JPY	0.32%	0.12%	0.21%		0.21%	0.22%	0.09%	0.09%
CAD	0.11%	-0.11%	0.00%	-0.21%		0.02%	-0.12%	-0.12%
AUD	0.09%	-0.11%	-0.04%	-0.22%	-0.02%		-0.13%	-0.15%
NZD	0.21%	-0.01%	0.09%	-0.09%	0.12%	0.13%		0.00%
CHF	0.24%	0.03%	0.09%	-0.09%	0.12%	0.15%	-0.00%

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).

Traders assessed the prospect of increased diesel supplies from Russia as hopes for an energy ceasefire between Moscow and Kyiv remained uncertain, despite US President Donald Trump’s announcement. Ukrainian President Volodymyr Zelenskiy said on Monday that Russian forces had struck at least six energy facilities during deadly airstrikes across Ukraine.

Meanwhile, the Saudi-led coalition fighting Yemen’s Iran-backed Houthi rebels reported that it was responding to another wave of drone and missile attacks targeting Saudi Arabia.

According to the Reserve Bank of Australia (RBA) Minutes, board members discussed the challenges of judging how large the upside risks to inflation were or could become after hiking the Official Cash Rate (OCR) to 4.6%. The board will do what’s needed to meet its mandate, “including increasing the cash rate target further if required.”

The International Monetary Fund (IMF) raised the 2026 world economic growth outlook to 3.1% from 3.0% in July, with strong AI investment offsetting the energy shock from the Middle East war. The IMF projected 2027 world GDP growth to be unchanged at 3.4% and warned of “resilience under strain."

Oil shock fades but bond volatility persists as HSBC flags limits to relief

Strategists at HSBC Asset Management argue that “one of the major factors behind 2026’s bond market shock has been the surge in oil prices caused by the Iran conflict.” They note that this linkage was clearly visible earlier in the year, with “overlapping movements between implied measures of bond and oil market volatility as measured by the MOVE and oil VIX indices, respectively.” However, HSBC highlights that “what’s interesting is the recent disconnection between these volatility measures: bond markets have continued to sell off and remain choppy even though oil prices have settled.” In their view, “the initial leg higher in yields has created its own problems,” and with “hyperscaler debt issuance likely to remain massive, investors shouldn’t expect falling oil prices to be a silver bullet” for reversing bond market weakness.

EUR/USD rebounds from a 17-month low to 1.1175 in the European morning. Traders brace for Germany’s Harmonized Index of Consumer Prices (HICP) and speeches by European Central Bank (ECB) members Elderson, Escriva and Lane.

GBP/USD gathers strength to around 1.3225 on Tuesday. Bank of England (BoE) policymaker Megan Greene is set to speak later in the day.

USD/JPY softens to near 158.20 in the European session on Tuesday. The Statistics Bureau of Japan revealed on Tuesday that Japan's wholesale prices rose 6.8% YoY in September, versus 7.6% prior. This figure was slower than the previous month but indicated mounting inflationary pressure that ‌keeps alive market expectations of a near-term interest rate hike.

Gold edges higher to near $4,200 on Tuesday as crude oil prices ease. Inflows into gold-backed ETFs have reached a four-year high, according to data compiled by Bloomberg.

(This story was corrected on October 13 at 07:00 GMT to say, in the title, that US Dollar retreats from 18-month high as bond yields, oil prices ease, not 17-month high.)

US Dollar FAQs

What is the US Dollar?

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.

How do the decisions of the Federal Reserve impact the US Dollar?

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.

What is Quantitative Easing and how does it influence the US Dollar?

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.

What is Quantitative Tightening and how does it influence the 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.

Oct 13, 14:52 HKT

AUD/USD Price Forecast: Declining 20-day EMA builds case for more downside

AUD/USD ticks up to near 0.6960 as the US Dollar faces pressure.
A drop in US bond yields has led to some correction in the US Dollar.
Investors keenly await the CPI data from the US and China, and the Australian employment data.

The Australian Dollar (AUD) is marginally higher at around 0.6960 against the US Dollar (USD) during the European trading session on Tuesday. The Aussie pair edges up as the US Dollar comes under pressure due to a decline in United States (US) Treasury Yields ahead of the Consumer Price Index (CPI) data for September, which will be released on Wednesday.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Japanese Yen.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.19%	-0.11%	-0.22%	-0.08%	-0.04%	-0.17%	-0.18%
EUR	0.19%		0.07%	-0.05%	0.13%	0.12%	0.04%	0.00%
GBP	0.11%	-0.07%		-0.13%	0.00%	0.05%	-0.04%	-0.06%
JPY	0.22%	0.05%	0.13%		0.15%	0.19%	0.07%	0.06%
CAD	0.08%	-0.13%	-0.00%	-0.15%		0.04%	-0.08%	-0.09%
AUD	0.04%	-0.12%	-0.05%	-0.19%	-0.04%		-0.11%	-0.14%
NZD	0.17%	-0.04%	0.04%	-0.07%	0.08%	0.11%		-0.01%
CHF	0.18%	-0.00%	0.06%	-0.06%	0.09%	0.14%	0.00%

As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, is down 0.16% to near 102.40. Still, the DXY is close to its fresh yearly high of 102.61 posted on Monday. 10-year US bond yields trade 0.85% lower to near 5.20%.

The US CPI report is expected to show that the headline inflation accelerated to 3.7% Year-on-Year (YoY) from 3.4% in August. The core CPI – which excludes volatile items such as food and energy – is seen higher at 2.5% YoY from the previous reading of 2.4%.

Investors will pay close attention to the US CPI data as it is expected to influence Federal Reserve’s (Fed) interest rate expectations. Currently, the CME FedWatch tool show traders are confident that the Fed will leave interest rates unchanged in the policy meeting later this month.

On the Australian Dollar front, investors await China’s CPI and Australian employment data for September, which are scheduled for Wednesday and Thursday, respectively.

AUD/USD Technical Analysis

In the daily chart, AUD/USD trades at 0.6960, keeping a bearish near-term tone as spot holds beneath the 20-day exponential moving average (EMA) at 0.7009. The pair’s inability to reclaim this short-term trend indicator suggests rallies remain capped for now, while the Relative Strength Index (14) at 37.6 stays below neutral territory, hinting at lingering downside pressure rather than outright oversold conditions.

On the topside, initial resistance is located at the 20-day EMA at 0.7009, and a sustained break above this level would be needed to ease immediate bearish pressure and open the way for a more constructive recovery phase. On the downside, the October 1 lo at 0.6904 is the key support level; a decisive break below the same would expose the pair to the June low at 0.6865.

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

Economic Indicator

Employment Change s.a.

The Employment Change released by the Australian Bureau of Statistics is a measure of the change in the number of employed people in Australia. The statistic is adjusted to remove the influence of seasonal trends. Generally speaking, a rise in Employment Change has positive implications for consumer spending, stimulates economic growth, and is bullish for the Australian Dollar (AUD). A low reading, on the other hand, is seen as bearish.

Hammack leans hawkish as inflation mindset fears bolster Dollar

Fed’s Hammack delivered a notably more hawkish tone, with the 8.4/10 FXS Speechtracker score standing well above the 7.5/10 historical average, underscoring a stronger-than-usual bias toward tighter policy. The emphasis on the need for higher interest rates, a restrictive stance to push inflation back to 2%, and concerns that an inflationary mindset is becoming ingrained—amid neutral financial conditions and broad, demand-driven price pressures including from AI—signals a preference for relatively quick, smaller rate moves that keep the policy path firmly skewed toward further tightening, a backdrop typically supportive for the Dollar. Hammack’s focus on clarifying the Fed's reaction function and warning that firms are planning price hikes beyond cost increases reinforces the message that the current trend inflation in the mid-to-high 2% range is still inconsistent with the target, warranting sustained hawkish vigilance.

The FXS Fed Sentiment Index rose by 0.59 points to 138.92, cementing the Fed’s stance deep in hawkish territory and aligning with the elevated FXS Speechtracker score. This upward move well above the neutral 100 mark confirms that recent Fed communication, exemplified by Hammack’s speech, is skewing more decisively toward tighter policy expectations, a configuration that tends to underpin the Dollar against peers.

Meanwhile, the Iran-backed Houthi group in Yemen escalated its campaign against Saudi Arabia and fired more missiles on Monday. This follows deadly strikes on Riyadh’s King Khalid International Airport over the weekend, which drew a Saudi vow of retaliation. Moreover, US President Donald Trump raised the possibility of joining strikes on the Houthi group and resuming attacks on Iran. This keeps the geopolitical risk premium in play, which backs the case for the emergence of some dip-buying around the safe-haven Greenback and should keep a lid on any meaningful upside for the Gold.

Traders might also opt to wait for more cues about the Fed's future policy path before placing fresh directional bets. Hence, the focus will remain glued to the release of the latest US inflation figures – Consumer Price Index (CPI) and Producer Price Index (PPI) on Wednesday and Thursday, respectively. Apart from this, Fed Chair Kevin Warsh's speech at the annual meetings of the IMF and World Bank in Bangkok on Friday would drive the USD and the non-yielding Gold. Nevertheless, the fundamental backdrop suggests that the subsequent move up is more likely to be sold into and remain capped.

US CPI seen as key driver for Fed rate expectations

Analysts at Societe Generale highlight that “the week's main non-geopolitical event comes on Wednesday with the release of US CPI,” which they see as pivotal for near-term Fed pricing. They argue that “if we see a pickup in core inflation to 2.5% (the market consensus), there will be little chance of any shift in market expectations: no rate hike this month, but a very strong chance of one in December and another in Q1.”

XAU/USD 4-hour chart

Technical Analysis

The XAU/USD pair remains confined in a two-week-old range, marking a bearish consolidation against the backdrop of a decline from the August monthly swing high. Moreover, the precious metal remains capped below the 100-period Simple Moving Average (SMA) on the 4-hour chart, which validates the near-term negative bias. Moreover, the Moving Average Convergence Divergence (MACD) indicator sits marginally in negative territory, hinting at fading upside momentum. Meanwhile, the Relative Strength Index (RSI) near 55 suggests a constructive but modestly cooling bullish tone as the Gold price consolidates beneath the key barrier.

Hence, any subsequent move up might confront initial resistance near the 100-period SMA at $4,204. This is followed by the top boundary of the trading range, around $4,218, with the 61.8% Fibo. retracement at $4,241 forming the next hurdle before a broader supply cluster emerges between the 50.0% retracement at $4,328 and the 38.2% level at $4,415, ahead of the 23.6% retracement at $4,523 and the cycle peak near $4,697. On the downside, immediate support aligns at the 78.6% retracement at $4,117, and a convincing break below would be seen as a fresh trigger for bearish traders, exposing the structural floor around the prior swing low at $3,959.

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

Interest rates FAQs

What are interest rates?

Interest rates are charged by financial institutions on loans to borrowers and are paid as interest to savers and depositors. They are influenced by base lending rates, which are set by central banks in response to changes in the economy. Central banks normally have a mandate to ensure price stability, which in most cases means targeting a core inflation rate of around 2%. If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation.

How do interest rates impact currencies?

Higher interest rates generally help strengthen a country’s currency as they make it a more attractive place for global investors to park their money.

How do interest rates influence the price of Gold?

Higher interest rates overall weigh on the price of Gold because they increase the opportunity cost of holding Gold instead of investing in an interest-bearing asset or placing cash in the bank. If interest rates are high that usually pushes up the price of the US Dollar (USD), and since Gold is priced in Dollars, this has the effect of lowering the price of Gold.

What is the Fed Funds rate?

The Fed funds rate is the overnight rate at which US banks lend to each other. It is the oft-quoted headline rate set by the Federal Reserve at its FOMC meetings. It is set as a range, for example 4.75%-5.00%, though the upper limit (in that case 5.00%) is the quoted figure. Market expectations for future Fed funds rate are tracked by the CME FedWatch tool, which shapes how many financial markets behave in anticipation of future Federal Reserve monetary policy decisions.

Oct 13, 14:36 HKT

Euro: Gradual downside toward key support against US Dollar – UOB

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann highlight ongoing Euro (EUR) weakness against the US Dollar (USD), with EUR/USD at fresh 17‑month lows. Intraday, further losses are possible but seen contained within 1.1145–1.1185. Over the next 1–3 weeks, the downtrend that began more than a month ago could extend gradually toward 1.1115 unless strong resistance at 1.1220 is broken.

Euro-Dollar slide not yet stabilised

"24-HOUR VIEW: We did not expect EUR to drop sharply to a low of 1.1151, as we had expected range-trading. Further EUR weakness is not ruled out, but given the oversold conditions, any decline should stay within a 1.1145/1.1185 range. In other words, a continued decline below 1.1145 is unlikely."

"1-3 WEEKS VIEW: Our most recent narrative was from last Thursday (08 Oct, spot at 1.1200), when we highlighted that “there is a chance for EUR to test 1.1145.” After trading in a range for a few days, EUR dropped sharply to a low of 1.1151 yesterday. Despite the decline, downward momentum has not increased much. However, the weakness in EUR that started more than a month ago has not quite stabilised, and EUR could decline gradually toward 1.1115. On the upside, a breach of the ‘strong resistance’ at 1.1220 (level was at 1.1255 yesterday) would mean that EUR is not declining further."

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

Oct 13, 14:29 HKT

USD/JPY Price Forecast: Bulls fail to break the 200-day SMA around 158.50

USD/JPY pulls back below 158.30 after rejection at the 200-day SMA, at 158.56
Softer-than-expected Japanese producer prices are keeping the JPY from appreciating further.
The US Dollar treads water with investors awaiting key US inflation reports due later this week.

The US Dollar (USD) edges lower against the Japanese Yen (JPY) on Tuesday, although it maintains its broader bullish trend intact, favoured by a risk-averse market. USD/JPY bulls found resistance at the 200-day SMA, in the 158.50 area, again on Monday, and the pair pulled back during Tuesday's early trading to reach session lows sub-158.30.

Data from Japan released earlier on Tuesday showed an unexpected slowdown in factory inflation, as September's Producer Prices Index (PPI) contracted 0.3% for the second consecutive month against market expectations of a 0.5% increase. Year.-over-Year, Japan’s PPI rose at a 6.9% pace, also against expectations of a steady 7.6% rate, but still at levels pressuring the Bank of Japan (BoJ) to tighten its monetary policy further.

Later on, BoJ Governor Kazuho Ueda observed that underlying inflation is nearing 2% and reaffirmed the bank's commitment to keep it anchored at those levels, which leaves the door open to further interest rate hikes. The Yen, however, hardly moved on Ueda’s comments.

The US Dollar, on the other hand, has been trading on a moderately softer tone during the Asian session, with US markets returning after a partial close on Monday. Investors, however, are likely to look from the sidelines on Tuesday, awaiting US Consumer Price Index (CPI) and Producer Price Index (PPI) figures later in the week for further hints about the timing of the Federal Reserve’s (Fed) next rate hike.

Technical Analysis: The USD needs additional impulse to break the 200-day SMA

USD/JPY trades at 158.30, keeping the broader constructive tone intact so far, yet with rallies capped below the 200-day simple moving average (SMA) at 158.56. The Relative Strength Index (RSI) in the daily chart lies around 55, and the Moving Average Convergence Divergence (MACD) is slightly positive, but the pair seems to need fresh motivation to break the range top.

Immediate resistance is seen at the mentioned SMA at 158.56, which closes the path towards the September 24 high around 159.00 and the key 160.00 area. On the downside, the October 6 and 8 lows at the 157.50 area are likely to test bears ahead of the late September lows at 156.38 and the September 17 low at 155.34.

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

Japanese Yen Price Today

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the US Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.16%	-0.09%	-0.19%	-0.08%	-0.02%	-0.11%	-0.20%
EUR	0.16%		0.06%	-0.04%	0.11%	0.12%	0.06%	-0.04%
GBP	0.09%	-0.06%		-0.13%	-0.02%	0.04%	-0.02%	-0.10%
JPY	0.19%	0.04%	0.13%		0.12%	0.19%	0.09%	0.02%
CAD	0.08%	-0.11%	0.02%	-0.12%		0.06%	-0.03%	-0.11%
AUD	0.02%	-0.12%	-0.04%	-0.19%	-0.06%		-0.09%	-0.18%
NZD	0.11%	-0.06%	0.02%	-0.09%	0.03%	0.09%		-0.07%
CHF	0.20%	0.04%	0.10%	-0.02%	0.11%	0.18%	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).

Oct 13, 14:08 HKT

US Dollar Index Price Forecast: Likely extend advance to near 103.00

The US Dollar drops as US bond yields fall after an extended weekend.
Investors see strength in US Dollar due to strong US growth prospects, high inflation and hawkish Fed bets.
The US CPI and PPI data for September is awaited.

The US Dollar (USD) trades lower against its major currency peers on Tuesday due to lower United States (US) Treasury Yields.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Swiss Franc.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.22%	-0.14%	-0.22%	-0.11%	-0.06%	-0.15%	-0.23%
EUR	0.22%		0.07%	-0.04%	0.11%	0.13%	0.06%	-0.02%
GBP	0.14%	-0.07%		-0.08%	0.00%	0.06%	-0.02%	-0.08%
JPY	0.22%	0.04%	0.08%		0.12%	0.17%	0.07%	0.01%
CAD	0.11%	-0.11%	-0.00%	-0.12%		0.05%	-0.05%	-0.11%
AUD	0.06%	-0.13%	-0.06%	-0.17%	-0.05%		-0.08%	-0.16%
NZD	0.15%	-0.06%	0.02%	-0.07%	0.05%	0.08%		-0.06%
CHF	0.23%	0.02%	0.08%	-0.01%	0.11%	0.16%	0.06%

In the early European trade, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, is down 0.17% to near 102.38. Still, the DXY is close to its fresh yearly high of 102.61 posted on Monday. 10-year US bond yields trade 0.85% lower to near 5.20% after an extended weekend. US bond markets were closed on Monday due to Columbus Day.

Market experts argue that the outlook of the US Dollar remains strong on the back of strong domestic growth, elevated inflationary pressures, and hawkish Federal Reserve (Fed) expectations.

Analysts at ING observe that FX markets are largely looking through recent noise and "preferring to concentrate on the cyclical story of decent US growth, above-target inflation and the prospect of the Fed hiking 75bp from current levels."

On the economic data front, investors await the US Consumer Price Index and the Producer Price Index (PPI) data for September, which will be released on Wednesday and Thursday, respectively. The data is expected to influence Fed’s interest rate expectations significantly. Fed officials have explicitly told that inflation concerns remain heightened and more interest rate hikes are needed to contain them.

Hammack leans hawkish as Fed rhetoric flags risk of entrenched inflation mindset

Fed’s Hammack delivers a notably more hawkish tone, with the 8.4/10 FXS Speechtracker score standing well above the 7.5/10 historical average, underscoring a stronger push for tighter policy relative to the established baseline. The emphasis on the need for higher interest rates, a restrictive stance to achieve 2% inflation, and concern over an emerging inflationary mindset—amid neutral financial conditions and broad, demand-driven price pressures including from AI—signals a preference for swift, smaller rate moves to prevent inflation expectations from drifting. Hammack’s focus on clarifying the reaction function and warning that firms are planning price hikes beyond input costs reinforces the message that the Fed should act proactively to avoid inflation becoming ingrained.

The FXS Fed Sentiment Index rose by 0.59 points to 138.92, firmly in hawkish territory and consistent with the elevated FXS Speechtracker score. This move higher reflects a clear shift toward tighter policy rhetoric, reinforcing expectations that the Fed will prioritize containing inflation over supporting growth in the near term.

US Dollar Index Technical Analysis

In the daily chart, Dollar Index Spot trades at 102.38. Price holds above the 20-day exponential moving average (EMA) at 101.48, keeping the near-term bias bullish as the index extends its recovery from the sub-100 area. The Relative Strength Index (14) stands around 69, flirting with overbought territory and hinting that upside momentum is strong but increasingly stretched.

On the downside, the 20-day EMA near 101.48, where buyers are likely to defend the prevailing uptrend on any pullback. Looking up, the asset could rise to the 103.00 if it decisively breaks above the fresh yearly high at 102.61.

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

Economic Indicator

Consumer Price Index (YoY)

Inflationary or deflationary tendencies are measured by periodically summing the prices of a basket of representative goods and services and presenting the data as The Consumer Price Index (CPI). CPI data is compiled on a monthly basis and released by the US Department of Labor Statistics. The YoY reading compares the prices of goods in the reference month to the same month a year earlier.The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.

Why it matters to traders?

The US Federal Reserve (Fed) has a dual mandate of maintaining price stability and maximum employment. According to such mandate, inflation should be at around 2% YoY and has become the weakest pillar of the central bank’s directive ever since the world suffered a pandemic, which extends to these days. Price pressures keep rising amid supply-chain issues and bottlenecks, with the Consumer Price Index (CPI) hanging at multi-decade highs. The Fed has already taken measures to tame inflation and is expected to maintain an aggressive stance in the foreseeable future.

Oct 13, 14:00 HKT

EUR/USD Price Forecast: Holds gains above 1.1150, but remains technically bearish under 100-day SMA

EUR/USD gathers strength to around 1.1175 in Tuesday’s early European session.
The pair keeps a bearish vibe under 100-day SMA, but temporary rebound cannot be ruled out amid oversold conditions.
The first upside target to watch is 1.1243; the initial support level is seen at 1.1105.

The EUR/USD pair holds positive ground near 1.1175 during the early European trading hours on Tuesday. Nonetheless, hawkish Federal Reserve (Fed) expectations and higher US Treasury bond yields could underpin the US Dollar (USD) and act as a headwind for the major pair.

Cleveland Fed President Beth Hammack said on Monday that tighter monetary policy may be needed to contain inflation in order to prevent an inflationary mindset from becoming entrenched in the economy.

Traders put the probability of rates remaining unchanged at the next meeting at more than 80.6%, while the chance of an increase at the December policy meeting was nearly 84.7%, the CME FedWatch Tool showed.

The key US inflation reports will be the highlight later this week, as they could provide further direction on the Fed’s policy path. The US Consumer Price Index (CPI) inflation report will be published on Wednesday, followed by Producer Price Index (PPI) and Retail Sales data on Thursday.

The headline CPI is expected to show a rise of 3.7% YoY in September, versus 3.4% prior. The core CPI is projected to show an increase of 2.5% YoY in September, compared to 2.4% in August. Any signs of hotter inflation in the US could reinforce the US central bank's decision to maintain a restrictive monetary policy stance to contain persistent price pressures.

Euro under pressure as French budget standoff keeps EUR/USD bias bearish

Analysts at ING highlight that the French government’s latest budget proposal, which includes “€43bn in new savings,” is due to be debated in parliament this week, but they note that “consensus seems to expect that this will make little progress.” ING adds that the government may ultimately have to “pass this budget by decree,” with parliamentary protagonists likely to “avoid trying to bring down the government, which would make the French debt crisis worse than it already is.” The bank cautions that “this is hardly a euro positive, however.”

Against this backdrop, ING points out that “speculators and the FX options market remain quite bearish on EUR/USD currently, although positioning is starting to get a little stretched.” In their view, “barring a big US policy misstep, which again questions investors' long dollar exposure, the macro story remains EUR/USD bearish,” and for the near term “a further dip towards 1.1100/1120 looks more likely.”

Hammack leans hawkish as Fed rhetoric flags risk of inflationary mindset

Fed’s Hammack delivers a notably more hawkish tone, with the 8.4/10 FXS Speechtracker score standing well above the 7.5/10 historical average, underscoring a stronger bias toward tighter policy relative to the established baseline. The emphasis on the need for higher interest rates, a restrictive stance to achieve 2% inflation, and concern that an inflationary mindset is becoming ingrained—amid broad, demand-driven price pressures and “neutral” financial conditions—signals a preference for swift, smaller rate moves to reinforce tight monetary policy. Hammack’s focus on clarifying the Fed reaction function and warning that firms are planning price hikes beyond cost increases highlights a deliberate effort to re-anchor expectations and keep the Dollar supported by a higher-for-longer rate narrative.

The FXS Fed Sentiment Index rose by 0.59 points to 138.92, reinforcing that Fed communication remains firmly in hawkish territory well above the neutral 100 mark. This incremental uptick, aligned with the elevated FXS Speechtracker score, suggests that markets should continue to price a bias toward tighter policy, which is typically supportive for the Dollar against the Euro and Yen.

Technical Analysis: EUR/USD retains a negative bias amid oversold conditions

In the daily chart, EUR/USD keeps a bearish near-term bias as spot holds below the 100-day simple moving average (SMA) and the Bollinger middle band. Price is consolidating closer to the lower Bollinger band support than to overhead levels, while the Relative Strength Index (14) at 25.5 sits in oversold territory, hinting that downside pressure persists but that the sell-off is becoming stretched.

On the topside, initial resistance is located at the October 9 high of 1.1243, en route to the Bollinger middle band near 1.1325, and then the 100-day SMA at 1.1485. A stronger cap emerges at the upper boundary of Bollinger band around 1.1540.

On the downside, the lower Bollinger band at 1.1105 serves as the next key support level. A desicive break below this level would expose further weakness toward the May 21, 2025 low of 1.1050, followed by the 1.1000 psychological level. Any follow-through selling below the mentioned level could expose the May 12, 2025 low of 1.0951.

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

Euro FAQs

What is the Euro?

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%).

What is the ECB and how does it impact the Euro?

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.

How does inflation data impact the value of the Euro?

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.

How does economic data influence the value of the Euro?

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.

How does the Trade Balance impact the Euro?

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.

Oct 13, 13:29 HKT

British Pound trades subduedly against Japanese Yen, BoE’s Greene supports quick rate hikes

The British Pound is marginally down at around 209.25 against the Japanese Yen.
BoE’s Greene said that the central bank should act quickly to diminish fears of second-round inflation effects.
The BoJ is unlikely to deliver back-to-back interest rate hikes.

The British Pound (GBP) trades marginally lower against the Japanese Yen (JPY) at around 209.25 during the late Asian trade on Tuesday. The cross faces mild selling pressure even as Bank of England (BoE) policymaker Megan Greene has argued in favor that the central bank should act now to contain inflationary pressures before it gets too late and it starts spreading to wages and broad consumer prices.

So far this year, the BoE has kept interest rates steady at 3.75%. Meanwhile, market experts see the BoE raising interest rates in the November meeting on the back improved economic outlook.

Analysts at Commerzbank highlight that the UK economy has “remained relatively resilient so far this year,” noting that “following growth of 0.6% q/q in the first quarter, second-quarter GDP was revised up to 0.5% in the final release.” They add that “monthly GDP data for July, showing a 0.4% m/m increase, also point to a solid start to the third quarter,” reinforcing the picture of firmer underlying momentum.

Against this backdrop, Commerzbank argues that “the improved growth outlook should make it easier for the BoE to raise rates further in order to lean against inflation.” The bank acknowledges that “until now, we had not expected the BoE to hike rates again,” but says “recent developments… have led us to conclude that a November rate hike is now more likely than not.” Moreover, Commerzbank “do[es] not expect it to be a one-off move,” and now “anticipate[s] another hike in February, taking Bank Rate to 4.25%.”

For fresh cues regarding the UK economic strength, investors await monthly Gross Domestic Product (GDP) data for August, which is scheduled for Thursday. According to estimates, the UK economy contracted 0.1% in August after a 0.4% expansion in July.

Meanwhile, the Japanese Yen outperforms its major peers despite market experts arguing against back-to-back interest rate hikes from the Bank of Japan (BoJ).

Japanese Yen Price Today

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the US Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.16%	-0.08%	-0.17%	-0.09%	-0.02%	-0.09%	-0.18%
EUR	0.16%		0.08%	-0.04%	0.07%	0.11%	0.07%	-0.02%
GBP	0.08%	-0.08%		-0.10%	0.00%	0.04%	-0.02%	-0.09%
JPY	0.17%	0.04%	0.10%		0.09%	0.15%	0.08%	0.00%
CAD	0.09%	-0.07%	0.00%	-0.09%		0.07%	-0.01%	-0.08%
AUD	0.02%	-0.11%	-0.04%	-0.15%	-0.07%		-0.06%	-0.15%
NZD	0.09%	-0.07%	0.02%	-0.08%	0.00%	0.06%		-0.07%
CHF	0.18%	0.02%	0.09%	-0.01%	0.08%	0.15%	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).

BoJ seen shifting to inflation stabilisation but not yet ready for rapid hikes

Analysts at Rabobank argue that the Bank of Japan has reached an important inflection point, noting that “it now appears to have reached the point when it can instead shift its focus to stabilising price pressures around the target level.” However, they caution that this does not herald an aggressive tightening cycle, stressing that “even so, the Bank is still not widely viewed as being in a position in which back-to-back rate rises are appropriate.”

Central banks FAQs

What does a central bank do?

Central Banks have a key mandate which is making sure that there is price stability in a country or region. Economies are constantly facing inflation or deflation when prices for certain goods and services are fluctuating. Constant rising prices for the same goods means inflation, constant lowered prices for the same goods means deflation. It is the task of the central bank to keep the demand in line by tweaking its policy rate. For the biggest central banks like the US Federal Reserve (Fed), the European Central Bank (ECB) or the Bank of England (BoE), the mandate is to keep inflation close to 2%.

What does a central bank do when inflation undershoots or overshoots its projected target?

A central bank has one important tool at its disposal to get inflation higher or lower, and that is by tweaking its benchmark policy rate, commonly known as interest rate. On pre-communicated moments, the central bank will issue a statement with its policy rate and provide additional reasoning on why it is either remaining or changing (cutting or hiking) it. Local banks will adjust their savings and lending rates accordingly, which in turn will make it either harder or easier for people to earn on their savings or for companies to take out loans and make investments in their businesses. When the central bank hikes interest rates substantially, this is called monetary tightening. When it is cutting its benchmark rate, it is called monetary easing.

Who decides on monetary policy and interest rates?

A central bank is often politically independent. Members of the central bank policy board are passing through a series of panels and hearings before being appointed to a policy board seat. Each member in that board often has a certain conviction on how the central bank should control inflation and the subsequent monetary policy. Members that want a very loose monetary policy, with low rates and cheap lending, to boost the economy substantially while being content to see inflation slightly above 2%, are called ‘doves’. Members that rather want to see higher rates to reward savings and want to keep a lit on inflation at all time are called ‘hawks’ and will not rest until inflation is at or just below 2%.

Is there a president or head of a central bank?

Normally, there is a chairman or president who leads each meeting, needs to create a consensus between the hawks or doves and has his or her final say when it would come down to a vote split to avoid a 50-50 tie on whether the current policy should be adjusted. The chairman will deliver speeches which often can be followed live, where the current monetary stance and outlook is being communicated. A central bank will try to push forward its monetary policy without triggering violent swings in rates, equities, or its currency. All members of the central bank will channel their stance toward the markets in advance of a policy meeting event. A few days before a policy meeting takes place until the new policy has been communicated, members are forbidden to talk publicly. This is called the blackout period.

Oct 13, 13:29 HKT

Indonesian Rupiah gains as BI Governor Destry reaffirms rate autonomy

Bank Indonesia Governor confirmed full policy independence despite closer coordination with the government.
Future BI interest rate hikes remain data-dependent, supported by $146.3 billion in foreign exchange reserves.
Bilateral local currency trade deals surged to $49.42 billion, significantly reducing US dollar reliance.

USD/IDR depreciates after registering modest gains in the previous day, trading around 17,950 during Asian hours on Tuesday. The Indonesian Rupiah (IDR) gained support against the US Dollar (USD) following comments from Bank Indonesia’s (BI) new chief, Destry Damayanti.

In an interview on Monday, Damayanti emphasized that while the central bank is working in closer synergy with the government to ensure fiscal and monetary policy alignment, BI retains full autonomy over its policy interest rates. She clarified that although government officials attend parts of BI's monthly reviews and she meets with President Prabowo Subianto, the government has no say in monetary decisions, which remain strictly data-dependent, per Reuters.

Addressing market concerns over political interference that have made the rupiah Asia's worst-performing currency, Damayanti reaffirmed BI's absolute authority to adjust interest rates or implement other incentives when needed.

To stabilize the Rupiah after it hit an all-time low in June, BI raised interest rates by a total of 100 basis points across May and June. Rates have since remained unchanged, but BI introduced an innovative discount on foreign exchange hedging instruments—a move that adds up to 40 basis points to foreign investor returns without requiring further rate hikes. Damayanti stated that future tightening remains possible depending on economic data, and noted that Indonesia’s foreign exchange reserves stood at an adequate $146.3 billion at the end of September to maintain currency stability.

In a broader effort to reduce reliance on the US Dollar, BI has actively expanded Local Currency Settlement (LCS) agreements with key trade partners, including China, Japan, South Korea, and Singapore, with a similar deal with India currently in the pipeline. These bilateral agreements have driven exponential growth in local currency transactions, which surged to $49.42 billion by August of this year, nearly double the $25.74 billion recorded in all of last year. Chinese yuan transactions accounted for roughly three-quarters of this total, signaling a significant shift toward regional currency integration.

The USD/IDR pair depreciated as the US Dollar (USD) pulled back from an 18-month high. The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, pulled back to around 102.40 after briefly touching a peak of 102.61. Investors are now looking ahead to crucial economic data, including Wednesday’s US Consumer Price Index (CPI) and Thursday’s Producer Price Index (PPI), to gain clearer insight into the Federal Reserve's rate path. According to the CME FedWatch Tool, pricing suggests roughly an 80% likelihood that the Fed will leave interest rates unchanged at its upcoming meeting, alongside an 88% chance of a rate hike in December.