Forex News
- GBP/USD trades with mild losses around 1.3240 in Thursday’s early European session.
- Stronger US PMI has fueled Fed rate hike bets.
- Financial markets are currently pricing in a 67% chance of a BoE rate hike in November.
The GBP/USD pair posts modest gains near 1.3240 during the early European trading hours on Thursday. However, the potential upside for the major pair might be limited amid a widening policy gap between a hawkish Federal Reserve (Fed) and a more cautious Bank of England (BoE).
According to the US S&P Global Flash Purchasing Managers Index (PMI), released on Wednesday, the Composite PMI improved to 58.4 in September from 56.0 in August. Meanwhile, the Manufacturing PMI rose to 57.0 in September, compared to 53.9 in the previous reading. This figure came in better than the 53.5 forecast.
Federal Reserve (Fed) Governor Michael Barr said on Wednesday that “further policy adjustments are likely to be needed” to get inflation under control. Earlier this week, Fed President Tom Barkin and Boston Fed President Susan Collins both backed the recent interest rate increase, citing continued inflationary pressures.
Stronger-than-expected US PMI data and hawkish remarks from Fed officials could boost the Greenback and act as a headwind for the major pair in the near term.
On the UK’s front, Bank of America Global Research anticipates the BoE to raise interest rates twice over the next six months, as higher energy prices raise the risk of persistent inflation. Meanwhile, the OECD said on Wednesday that the UK central bank does not need to raise interest rates because policy in the UK is tight enough to keep inflation in check.
Markets are pricing in a 67% odds of a BoE rate hike in November, with another increase expected in December, according to LSEG data.
Pound outlook softens as BBH questions BoE hike trajectory
Strategists at Brown Brothers Harriman highlight growing risks around the market’s aggressive Bank of England pricing, noting that “the swaps curve continues to imply about 100bps of BoE rate hikes in the next twelve months to 4.75%.” In their view, “the BoE may not need to tighten as much as markets expect,” given that “the UK economy is already operating below capacity,” the “Bank Rate at 3.75% is near the top of the BoE’s estimated 2% to 4% neutral range,” and “fiscal policy will likely turn more restrictive.” Together, these factors suggest scope for a dovish repricing that could leave the Pound vulnerable.
Technical Analysis: GBP/USD keeps a bearish vibe amid oversold condition
In the daily chart, GBP/USD extends a bearish tone as spot holds beneath all major referenced levels. The latest 20-period Bollinger Bands place price below even the lower limit of Bollinger band, while the middle Bollinger band and the 100-day simple moving average (SMA) reinforce a downside bias with the pair trading well under these structural markers. The Relative Strength Index (RSI) at 25.44 sits in oversold territory, hinting that while selling pressure is dominant, the pace of the decline could begin to moderate.
On the topside, immediate resistance emerges at the lower limit of Bollinger band near 1.3258, which now acts as the first hurdle for any corrective bounce. Above that, the 100-day SMA at 1.3428 and the Bollinger middle band at 1.3455 form a heavier resistance cluster that would need to be reclaimed to ease the current bearish pressure, with the upper boundary of Bollinger band further up at 1.3652 marking a more distant barrier.
On the downside, the initial support level is located at the June 24 low of 1.3140, followed by the November 20, 2025 of 1.3038. Any follow-through selling below this level could expose the 1.3000 psychological level.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- Rising oil prices and domestic fiscal outlook concerns put renewed downward pressure on the Indonesian Rupiah.
- Bank Indonesia maintained its benchmark rate at 5.75% during Governor Destry Damayanti's first policy meeting.
- Strong US PMI data pushed expectations for an October Fed rate hike to 69.7%, boosting USD strength.
Strong US manufacturing data boosts expectations for an October Fed rate hike to 69.7%.
USD/IDR gains ground for the second successive day, trading around 17,920 during Asian hours on Thursday. The pair appreciates as the Indonesian Rupiah (IDR) faces renewed pressure, driven by intensifying concerns over Indonesia’s fiscal outlook amid higher oil prices.
Bank Indonesia (BI) held its benchmark rate steady at 5.75% on Wednesday, matching market estimates. This marked the first policy meeting under newly appointed Governor Destry Damayanti and followed a total 100-basis-point increase across three moves in May and June, when policymakers tightened policy to support the currency after it fell to record lows against the US Dollar (USD).
The USD/IDR pair may see further upside as the US Dollar gains strength from ongoing hawkish sentiment surrounding the Federal Reserve's (Fed) policy outlook. This momentum was supported by the latest Flash US S&P Global PMI data for September, which showed manufacturing expanding faster than expected at 52.0, helping to offset minor pullbacks in composite and services activity.
Market expectations for a 25-basis-point Fed rate hike in October surged to nearly 69.7%, up sharply from 48.7% last week. Market participants are now focused on the upcoming US weekly Initial Jobless Claims report, as several Fed officials continue to support recent rate increases and warn against persistent inflation risks.
Dollar momentum extends as high beta FX underperforms
Strategists at Scotiabank report that “momentum remains with the USD,” with “broad gains against the major currencies this morning” pushing the Dollar Index to “its highest since late July.” They highlight that “high beta FX is underperforming on the day,” noting that the NZD, MXN and ZAR sit “at the foot of the overnight performance table alongside the KRW,” underscoring the breadth of the latest leg higher in the Dollar.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
- The Indian Rupee declines further against the US Dollar due to multiple headwinds.
- A rebound in oil prices and hawkish Fed prospects weighed on the Indian currency.
- US S&P Global PMI unexpectedly expands at a faster pace in September.
The Indian Rupee (INR) extends its losses against the US Dollar (USD) on Thursday. The USD/INR pair jumps to near 95.90 as the Indian currency comes under pressure, with oil prices regaining ground, and firm Federal Reserve (Fed) interest rate hike expectations strengthen the US Dollar further.
In the opening session, the MCX Crude Oil contract expiring on October 19 trades 0.45% lower at around Rs. 8,785, but rebounded strongly on Wednesday after posting a fresh two-week low near Rs. 8,496.
At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades firmly near the eight-week high of 101.23.
Oil prices bounce back as Iran vows not to surrender to US
Oil prices draw support from Iranian President Masoud Pezeshkian’s speech at United Nations (US) General Assembly on Wednesday, where he vowed, the Islamic Republic will not surrender to the United States (US).
“They have tested the strength and the steadfastness of Iran and they have learned that Iran cannot be made to surrender,” Iranian President Pezeshkian said.
The statement from Iranian President came after US President Trump said that Washington has mainly two options either to make deal with Iran or annihilate the nation, while pushing back hopes of deal after Mid-term elections.
Higher oil prices bode poorly for currencies from economies, such as India, which rely heavily on oil imports to meet their energy needs.
US Dollar continues to draw strength from hawkish Fed prospects
The US Dollar has been outperforming its peers for almost two weeks as financial markets are increasingly confident that the Fed will deliver more interest rate hikes this year even after raising them in the policy meeting this month.
Strategists at ING highlight that the Fed story is dominant, and the hawkish Fedspeak is enough to keep USD in demand.” They point to comments from Richmond Fed President Thomas Barkin, who “reinforced that message on Tuesday, arguing that a single rate hike may not be enough to bring inflation under control.” ING notes that Barkin “also noted that resilient labour market conditions should keep consumer spending supported, implying that a dovish shift among the hawks may require clearer signs of labour market softening.”
Meanwhile, strong preliminary US S&P Global Purchasing Managers’s Index (PMI) data appears to be backing Fed’s more interest rate hike narrative too.
On Wednesday, the PMI report showed an unexpectedly faster growth in both manufacturing and the service sector activity. The Services PMI arrived at 58.7, higher than 56.5 in August, while it was expected to drop to 56.0. The Manufacturing PMI jumped to 57.0 from the previous reading of 53.9, which was expected to drop to 53.5.
USD/INR Technical Analysis
In the daily chart, USD/INR trades at 95.90. The pair holds above the 20-period exponential moving average (EMA) at 95.5722, keeping the near-term bias bullish as price extends its recovery from last week’s lows. Momentum supports the constructive tone, with the Relative Strength Index (RSI) at 59.7, staying in positive territory but still shy of overbought conditions.
On the downside, immediate support is seen at the 20-period EMA at 95.57, which reinforces the bullish backdrop while it holds. Looking up, the immediate hurdle for the pair is the September 17 high at 96.10. The odds of the pair revisiting the all-time high near 97.00 would accelerate if it manages a decisive break above 96.10.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Indian Rupee FAQs
The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee.
The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference.
Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee.
Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.
- Asian stock markets are expected to face pressure due to surging US Treasury Yields.
- US bond yields have been fuelled by hawkish Fed prospect.
- Investors keenly await the Trump-Xi meeting later in the day.
Asian stock markets reflect a mixed performance on Thursday ahead of the meeting between United States (US) President Donald Trump and Chinese leader Xi Jinping later in the day.
As of writing, Nikkei 225 is up 1.65% to near 65,900, KOSPI rises 0.9% to near 7,080. Shanghai tumbles 1% to near 3,900, Hang Seng declines 0.75% at around 24,655, and Nifty 50 slumps 0.9% to near 23,220.
According to a Reuters report, the leaders are expected to discuss trade, Artificial Intelligence (AI), technology and Taiwan, while US Treasury Secretary Scott Bessent said Washington and Beijing had agreed to extend their trade truce by two months. Market participants would also pay attention to comments from Chinese leader Xi regarding the supply of rare earths and discussions regarding Middle East energy supply.
Meanwhile, the outlook of Asian markets has come under pressure as US bond yields have extended their rally amid firm expectations that the Federal Reserve (Fed) will continue its monetary-tightening cycle further. 10-year US Treasury Yields have jumped to 5.13%, the highest level seen in 19 years.
Surging US bond yields diminish the appeal of risk-sensitive assets, such as equities and riskier currencies.
The CME FedWatch tool shows that the Fed will hike interest rates in both policy meetings remaining this year.
Asian stocks FAQs
Asia contributes around 70% of global economic growth and hosts several key stock market indices. Among the region’s developed economies, the Japanese Nikkei – which represents 225 companies on the Tokyo stock exchange – and the South Korean Kospi stand out. China has three important indices: the Hong Kong Hang Seng, the Shanghai Composite and the Shenzhen Composite. As a big emerging economy, Indian equities are also catching the attention of investors, who increasingly invest in companies in the Sensex and Nifty indices.
Asia’s main economies are different, and each has specific sectors to pay attention to. Technology companies dominate in indices in Japan, South Korea, and increasingly, China. Financial services are leading stock markets such as Hong Kong or Singapore, considered key hubs for the sector. Manufacturing is also big in China and Japan, with a strong focus on automobile production or electronics. The growing middle class in countries like China and India is also giving more and more prominence to companies focused on retail and e-commerce.
Many different factors drive Asian stock market indices, but the main factor behind their performance is the aggregate results of the component companies revealed in their quarterly and annual earnings reports. The economic fundamentals of each country, as well as their central bank decisions or their government’s fiscal policies, are also important factors. More broadly, political stability, technological progress or the rule of law can also impact equity markets. The performance of US equity indices is also a factor as, more often than not, Asian markets take the lead from Wall Street stocks overnight. Finally, the broader risk sentiment in markets also plays a role as equities are considered a risky investment compared to other investment options such as fixed-income securities.
Investing in equities is risky by itself, but investing in Asian stocks comes along with region-specific risks to be taken into account. Asian countries have a wide range of political systems, from full democracies to dictatorships, so their political stability, transparency, rule of law or corporate governance requirements may diverge considerably. Geopolitical events such as trade disputes or territorial conflicts can lead to volatility in stock markets, as can natural disasters. Moreover, currency fluctuations can also have an impact on the valuation of Asian stock markets. This is particularly true in export-oriented economies, which tend to suffer from a stronger currency and benefit from a weaker one as their products become cheaper abroad.
- Gold remains depressed near a one-week low, touched earlier this Thursday.
- Fed rate hike bets and elevated US bond yields continue to underpin the USD.
- Geopolitical risks further benefit the buck and cap the upside for the bullion.
Gold (XAU/USD) is consolidating near a one-week low, touched during the Asian session on Thursday, as traders wait on the sidelines ahead of a crucial meeting between US President Donald Trump and his Chinese counterpart Xi Jinping. Expectations for a major announcement are low, though market players will look for any progress on rare earths, technology restrictions, and an extension of the current US-China truce. Nevertheless, the incoming headlines could infuse volatility and provide some impetus to the precious metal.
Any intraday move up, however, is likely to remain capped amid rising US Federal Reserve (Fed) rate hike bets, which tend to undermine the non-yielding Gold. According to CME Group's FedWatch Tool, traders are now pricing in a nearly 70% chance that the US central bank will raise borrowing costs again in October. The expectations were lifted by a private survey, which showed that US business activity accelerated for a fourth straight month in September. In fact, the S&P Global flash Composite PMI Output Index rose from 56.0 in August to 58.4, the highest level since July 2021.
Meanwhile, tensions between the US and Iran took center stage at the United Nations General Assembly (UNGA) after Trump stated that Iran faces a choice of diplomacy or total destruction. In response, Iran's President Masoud Pezeshkian said that Iran will never bend the knee, but is ready for a diplomatic solution. Pezeshkian also insisted that any deal would have to include an end to the US blockade, targeting Iranian ports and maritime shipping in and around the Strait of Hormuz. This led to a 3% rally in crude oil prices, reigniting inflation fears and underpinning prospects for further Fed tightening.
The growing acceptance that the US central bank will stick to its hawkish stance pushed the yield on the benchmark 10-year US Treasury bond to its highest level since July 2007 and lifted the US Dollar (USD) to a nearly two-month high on Wednesday. This, in turn, backs the case for a further near-term depreciating move for gold, though the subdued price action warrants some caution for aggressive bearish traders. Hence, weakness below the monthly swing low, around the $4,235 area, touched last Wednesday, is needed to reaffirm the negative outlook and pave the way for deeper losses.
XAU/USD daily chart
Technical Analysis
The XAU/USD pair maintains a capped tone below the 100-day Exponential Moving Average (EMA) and the 50% retracement level. Meanwhile, a negative Moving Average Convergence Divergence (MACD) reading and a mid-range Relative Strength Index (RSI) around 44.6 hint that bullish momentum has faded. Hence, any attempted recovery move is likely to be sold into while the Gold price remains under the clustered resistance.
On the downside, the 61.8% Fibonacci retracement at $4,227 offers nearby structural support, ahead of the 78.6% level at $4,101 and the prior swing floor at $3,940. On the topside, immediate resistance aligns at the 50% retracement at $4,316, followed by the 100-day EMA at $4,359 and the 38.2% retracement at $4,405. A sustained break above this cluster would be needed to ease the bearish bias and open the way toward $4,515 and $4,693.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US-China Trade War FAQs
Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.
An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.
The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.
- EUR/USD stabilizes after touching a nearly two-month low during the Asian session.
- The USD pauses for a breather ahead of the Trump-Xi summit, supporting spot prices.
- The bearish technical setup suggests that the path of least resistance is to the downside.
The EUR/USD pair drifts lower for the third straight day, hitting a fresh low since July 28 during the Asian session on Thursday, though it lacks follow-through. Spot prices currently trade around the 1.1380-1.1375 region, nearly unchanged for the day, as bears turn cautious ahead of a crucial meeting between US President Donald Trump and his Chinese counterpart Xi Jinping.
Meanwhile, the US Dollar (USD) pauses for a breather following the previous day's strong move up to a nearly two-month high and lends some support to the EUR/USD pair. However, rising US Federal Reserve (Fed) rate hike bets, along with geopolitical uncertainties, favor USD bulls. The shared currency, on the other hand, is undermined by political instability in Germany, which, in turn, suggests that the path of least resistance for the currency pair remains to the downside.
The daily Relative Strength Index (14) has fallen to 25.47, signaling oversold conditions that could slow further downside but do not yet suggest a durable bottom for the EUR/USD pair. Moreover, the Moving Average Convergence Divergence (MACD) sits below zero with a negative reading near -0.0025, hinting at persistent bearish momentum despite some risk of short-term corrective rebounds, which run the risk of fizzling out rather quickly near the 1.1420 supply zone.
On the downside, the one-year low, around 1.1325, touched in June, could offer some support ahead of the 1.1300 mark, below which the EUR/USD pair could fall to the 61.8% Fibonacci expansion at 1.1244. Meanwhile, the oversold RSI reading and the negative MACD configuration could act as momentum-based supports rather than precise price floors. Moreover, traders would likely treat any recovery toward 1.1425 as an opportunity to reassess the strength of the broader downtrend.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
EUR/USD daily chart
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- SNB is expected to keep its policy rate at 0% on September 24, though projections may still shift.
- The US Dollar halted its three-day rally and gave up daily gains despite lingering hawkish Federal Reserve expectations.
- Strong US manufacturing data boosts expectations for an October Fed rate hike to 69.7%.
USD/CHF loses ground after registering modest gains the previous day, trading around 0.8240 during Asian hours on Thursday. Traders await the Swiss National Bank (SNB) interest rate decision due later in the day.
SNB seen holding rates as inflation forecast set for upgrade
Economists at DBS Group Research expect the SNB to leave its policy rate unchanged at 0% at the September 24 meeting, but they still see scope for a shift in the bank’s projections. DBS notes that the SNB is “nevertheless likely to raise its near-term inflation forecast as elevated energy prices feed through into the economy amid persistent uncertainty in the Middle East,” even as Swiss growth has improved and recent easing in CHF haven pressures against the Euro and Pound reduces the urgency for a policy move.
The USD/CHF pair depreciates as the US Dollar (USD) loses its daily gains and halts its three-day winning streak despite an ongoing hawkish sentiment surrounding the Federal Reserve (Fed) policy outlook. The hawkish momentum was highlighted by the latest Flash US S&P Global PMI data for September, which showed manufacturing expanding faster than expected at 52.0, helping offset slight pullbacks in services and composite activity.
Following US economic signals, market expectations for a 25-basis-point Fed rate hike in October surged to nearly 69.7%, up sharply from 48.7% last week. Traders are now turning their attention to the upcoming US weekly Initial Jobless Claims report, while several Fed officials have reiterated support for the recent rate increase and issued fresh warnings regarding persistent inflation risks.
Technical Analysis:
In the daily chart, USD/CHF trades at 0.8240, keeping a bullish near-term bias as price holds above both the short-term and medium-term exponential moving averages. The nine- and 50-period Exponential Moving Averages (EMAs) sit below the market and suggest an underlying uptrend structure, while the 14-day Relative Strength Index (RSI) near 63 points to firm but not extreme positive momentum. The FXS Fed Sentiment Index around 148 reinforces a supportive macro backdrop for the dollar, aligning with the constructive technical tone.
On the downside, initial support is seen at the 9-period EMA at 0.8213, with a deeper cushion coming from the 50-period EMA near 0.8121 if corrective pressures extend. With no nearby technical resistance levels from the current dataset, the pair appears biased to continue probing higher levels as long as it holds above 0.8213, though the elevated RSI hints that upside could slow if momentum approaches overbought territory.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Swiss Franc Price Today
The table below shows the percentage change of Swiss Franc (CHF) against listed major currencies today. Swiss Franc was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.01% | -0.03% | -0.27% | 0.00% | 0.08% | -0.00% | -0.10% | |
| EUR | 0.01% | -0.02% | -0.27% | -0.03% | 0.12% | -0.01% | -0.11% | |
| GBP | 0.03% | 0.02% | -0.25% | 0.00% | 0.13% | 0.01% | -0.09% | |
| JPY | 0.27% | 0.27% | 0.25% | 0.24% | 0.35% | 0.23% | 0.14% | |
| CAD | -0.00% | 0.03% | 0.00% | -0.24% | 0.10% | -0.02% | -0.10% | |
| AUD | -0.08% | -0.12% | -0.13% | -0.35% | -0.10% | -0.11% | -0.20% | |
| NZD | 0.00% | 0.01% | -0.01% | -0.23% | 0.02% | 0.11% | -0.06% | |
| CHF | 0.10% | 0.11% | 0.09% | -0.14% | 0.10% | 0.20% | 0.06% |
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 Swiss Franc from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CHF (base)/USD (quote).
Gold prices remained broadly unchanged in India on Thursday, according to data compiled by FXStreet.
The price for Gold stood at 13,212.75 Indian Rupees (INR) per gram, broadly stable compared with the INR 13,213.38 it cost on Wednesday.
The price for Gold was broadly steady at INR 154,112.90 per tola from INR 154,118.30 per tola a day earlier.
Unit measure | Gold Price in INR |
|---|---|
1 Gram | 13,212.75 |
10 Grams | 132,129.20 |
Tola | 154,112.90 |
Troy Ounce | 410,962.70 |
FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
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- NZD/USD struggles to register any meaningful recovery and hangs near early July lows.
- Rising Fed rate hike bets and the US-Iran standoff underpin the USD, capping spot prices.
- Traders also seem hesitant and opt to wait for the Trump-Xi meeting for a fresh impetus.
The NZD/USD pair flatlines around the 0.5675 region, trading just above its lowest level since early July, set the previous day, as investors await a meeting between US President Donald Trump and his Chinese counterpart Xi Jinping. The incoming headline will influence sentiment surrounding antipodean currencies, including the Kiwi, and provide some impetus.
In the meantime, the US Dollar (USD) pauses for a breather following the previous day's strong move up to a fresh high since July 29 and acts as a tailwind for the NZD/USD pair. However, rising US Federal Reserve (Fed) rate hike expectations, along with persistent geopolitical uncertainties, act as a tailwind for the buck. Apart from this, the Reserve Bank of New Zealand's (RBNZ) dovish outlook warrants some caution before positioning for any meaningful recovery for the currency pair.
Investors ramped up their bets and now see around a 70% chance that the US central bank will raise borrowing costs again in October after a private survey showed on Wednesday that US business activity accelerated for a fourth straight month. In fact, the S&P Global flash Composite PMI Output Index rose from 56.0 to 58.4 in September, the highest level since July 2021. Adding to this, the overnight rally in oil prices reignited inflation fears, underpinning prospects for further Fed tightening.
Meanwhile, tensions between the United States and Iran escalated once again after Trump issued a fresh warning to Iran during his United Nations General Assembly (UNGA) speech on Tuesday. Moreover, Iran's President Masoud Pezeshkian highlighted the still-wide gap between the two sides, but showed readiness for a diplomatic solution to end the conflict. Nevertheless, the geopolitical risk premium remains in play, which should benefit the safe-haven USD and cap the NZD/USD pair.
NZD/USD daily chart
Technical Analysis
The NZD/USD pair maintains a near-term bearish bias following the overnight breakdown below the 0.5700 mark and seems vulnerable to extend the downswing toward prior lows near 0.5625. On the top side, any attempted recovery might now confront immediate hurdle near the 0.5700 support breakpoint, above which a bout of a short-covering could lift spot prices to the 0.5765 horizontal zone.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.95% | 1.16% | 0.77% | 0.84% | 1.23% | 0.84% | 0.24% | |
| EUR | -0.95% | 0.22% | -0.16% | -0.12% | 0.28% | -0.10% | -0.70% | |
| GBP | -1.16% | -0.22% | -0.48% | -0.34% | 0.04% | -0.33% | -0.92% | |
| JPY | -0.77% | 0.16% | 0.48% | 0.09% | 0.44% | 0.08% | -0.51% | |
| CAD | -0.84% | 0.12% | 0.34% | -0.09% | 0.46% | -0.01% | -0.58% | |
| AUD | -1.23% | -0.28% | -0.04% | -0.44% | -0.46% | -0.38% | -1.04% | |
| NZD | -0.84% | 0.10% | 0.33% | -0.08% | 0.00% | 0.38% | -0.60% | |
| CHF | -0.24% | 0.70% | 0.92% | 0.51% | 0.58% | 1.04% | 0.60% |
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).
- EUR/JPY weakens to near 179.85 in Thursday’s early European session.
- The negative outlook for the cross remains intact below the 100-day SMA, with bearish RSI momentum.
- The first upside barrier emerges at 180.00; the initial support level is seen at 178.48.
The EUR/JPY cross trades in negative territory around 179.85 during the early European trading hours on Thursday. Intervention risks from Japanese authorities provide some support to the Japanese Yen (JPY) against the Euro (EUR). Germany’s IFO survey is due later on Thursday.
Traders remain on high alert for currency intervention from Japanese officials, particularly given the recent reported rate check. “FX intervention remains a blunt tool to prop up currencies, and without a forceful monetary policy response it will be difficult for Japanese authorities to rein in the selloff in the yen,” said Matthew Ryan, head of market strategy at Ebury Partners Ltd.
The Bank of Japan (BoJ) decided to raise its policy rates by 25 basis points (bps) last week, as widely expected. Governor Kazuo Ueda’s remarks fell short of increasingly hawkish market expectations. Analysts believe that the JPY could face some selling pressure in the near term if markets are unconvinced that more BoJ tightening is coming.
US-Japan alignment extends into BoJ policy and yen carry dynamics
Analysts at Rabobank highlight that the deepening strategic ties between the US and Japan are now being reflected in financial markets. They note that “Trump and Japan’s PM Takaichi met to reaffirm their close geopolitical and geoeconomic alliance,” and stress that “that now encompasses the BoJ and the Yen carry trade too.” In this context, Rabobank points out that “Japan’s big banks' domestic loan share is seeing its first sustained post-1991 bubble burst rise,” describing this as “exactly what the White House and Takaichi want as (defence) industry investment rises.”
Technical Analysis: EUR/JPY remains capped under the 100-day SMA
In the daily chart, EUR/JPY keeps a bearish near-term bias as spot remains below the 20-period Bollinger middle band and the 100-day simple moving average (SMA). The pair is also capped by the upper Bollinger band, while the Relative Strength Index (14) around 40 suggests lingering downside pressure rather than outright oversold conditions.
On the topside, the initial resistance level emerges at the 180.00 psychological mark, en route to the Bollinger middle band at 180.70 and the 100-day SMA at 184.05. A decisive break above this level could pave the way to the upper Bollinger band near 185.50.
On the downside, the first support level is located at the September 17 low of 178.48, followed by the September 14 low of 177.45. The lower limit of Bollinger band at 175.91 offers the next meaningful contention level, with a sustained break beneath that zone likely to open the way to a deeper corrective phase.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
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