Forex News
Societe Generale’s Dev Ashish reports that the Central Bank of Chile kept the monetary policy rate at 4.50% in September, as weak domestic growth offsets rising external inflation risks. The bank highlights disappointing activity, deteriorating labour markets and anchored inflation expectations. Societe Generale expects an extended pause, with future moves depending on inflation expectations and a clearer recovery in Chilean activity.
BCCh balances inflation risks and weak growth
"The Central Bank of Chile (BCCh) left the monetary policy rate (MPR) unchanged at 4.50% at its September meeting, in line with our and consensus expectations."
"The decision underscores policymakers' preference to wait for greater clarity before adjusting policy in either direction, although the tone was somewhat less dovish than we had expected."
"We continue to expect an extended pause at 4.50%, although the balance of risks has increased significantly."
"While higher oil prices and potential Fed tightening keep the risk of future BCCh hikes alive, persistent weakness in growth and employment argues against near-term tightening."
"Until inflation expectations move meaningfully away from target or domestic activity shows a clearer recovery, policymakers are likely to remain on hold, balancing elevated inflation risks against a still-fragile economy."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- XAG/USD jumps over 3%, clearing the 100-day SMA.
- Bullish RSI breakout signals that buyers are regaining strong momentum.
- A break above $70.00 exposes $73.00 and $75.00 next.
Silver (XAG/USD) price makes a U-turn on Wednesday and rises over 3.40% as the Greenback weakens, putting the confirmation of a ‘head-and-shoulders’ chart pattern on hold, which has formed since mid-August. The XAG/USD pair trades at $68.00 after rebounding off $65.31.
XAG/USD Price Forecast: Technical Outlook
Price action shows the white metal is trading at an eight-day high of $68.30, rallying sharply and threatening to fail to confirm a bearish chart pattern. On its way north, the 100-day Simple Moving Average (SMA) was cleared at $67.17, exposing key technical resistance levels.
The Relative Strength Index (RSI) is bullish and has cleared the previous peak, indicating that buyers are gaining steam and putting upward pressure on Silver.
With that said, XAG/USD's first key resistance is the $70.00 figure. A decisive push can drive spot prices to the 200-day SMA at $73.00 before buyers launch an assault towards $ 75.00.
On the flip side, for a bearish continuation, XAG/USD must drop below the 100-day SMA at $67.18 and clear the September 8 low (LOD) of $65.54. Below is the $65.00 mark, followed by the September 2 swing low of $63.32.
XAG/USD Price Forecast: Technical Outlook
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
- EUR/USD holds a constructive bias while trading above key daily moving averages.
- The pair tests the 200-day SMA, with a clear break needed to strengthen the bullish outlook.
- RSI points higher, while the fading MACD histogram signals easing selling pressure.
EUR/USD struggles to extend its earlier gains on Wednesday as the US Treasury’s bond-buyback announcement sparks a brief bout of volatility, pushing Treasury yields higher and helping the US Dollar (USD) trim its losses.
Traders also avoid placing aggressive bullish bets ahead of the European Central Bank’s (ECB) interest rate decision on Thursday. At the time of writing, EUR/USD trades around 1.1640 as it attempts to secure a break above the 200-day Simple Moving Average (SMA) at 1.1633.
Strategists at Scotiabank note that policy expectations remain firmly supportive ahead of this week’s ECB decision, with “a 25bpt rate hike…fully expected at Thursday’s meeting, and another 25bpts…priced in for December.” They “anticipate a hawkish hike tomorrow, as President Lagarde unveils the latest forecast and signals ongoing concern about upside risk,” helping to underpin the recent recovery in EUR/USD.
Scotiabank describes the tone as “neutral/bullish,” with the latest bounce in the Euro “tentative and negligible, but there nonetheless as spot tests marginal one-week highs in the mid-1.16s.” Momentum indicators are also improving, with the bank highlighting that “the RSI is in the upper 50 area and climbing, leaning toward further near-term gains.”
From a technical perspective, EUR/USD retains a constructive bias, with the pair holding above the 50-day and 100-day SMAs and marginally above the 200-day SMA. Price has formed a sequence of higher highs and higher lows since recovering from below 1.1400 in late July and briefly climbing above 1.1700 on August 21. The latest price action suggests that another higher low may be developing above the 100-day SMA, although buyers still need a decisive break above the 200-day average to strengthen the bullish outlook.
The daily Relative Strength Index (RSI) has steadied above the neutral 50 level and points higher near 58, indicating healthy but not excessive bullish momentum. Meanwhile, the Moving Average Convergence Divergence (MACD) remains slightly below zero, although the fading red histogram suggests that bearish pressure is easing.
On the upside, initial resistance is seen at the 1.1700 horizontal barrier, followed by a stronger hurdle around 1.1800. On the downside, the 200-day SMA near 1.1633 provides immediate support, followed by the 100-day SMA at 1.1561 and the 50-day SMA at 1.1522. A deeper decline could expose the 1.1400 structural support level.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
The US Dollar (USD) navigated a bearish range on Wednesday, gathering some pace soon after the US Treasury announced a buyback of up to $6 billion in 10- to 20-year T-bonds. Other than that, traders remained pretty sceptical regarding the unabated tensions in the Middle East, refocusing instead on the imminent release of US inflation data on Friday.
Here is what you need to know on Thursday, September 10:
The US Dollar Index (DXY) has remained below the 99.00 level, down modestly for the day despite US Treasury yields rebounding across the curve, particularly after the US Treasury’s announcement. Producer Prices will take centre stage, seconded by the usual Initial Jobless Claims, Existing Home Sales, Wholesale Inventories and the EIA’s weekly report on US crude oil inventories.
EUR/USD has kept its bid bias unchallenged, advancing to multi-day peaks past 1.1650. The ECB is widely anticipated to hike its rates by 25 basis points. In addition, the final German Inflation Rate is due.
GBP/USD has left behind Tuesday’s inconclusive price action and has resumed its move higher, reaching multi-day tops around 1.3570. The RICS House Price Balance will be the only release across the Channel.
There was no respite for the downward trend in USD/JPY, which has added to Tuesday’s decline and revisited the 153.00 region, or seven-month troughs. The weekly Foreign Bond Investment figures are due, followed by the speech by the BoJ’s Masu.
AUD/USD has clinched fresh tops around 0.7240, levels last seen in early May. Next on tap in Oz will be the publication of the Consumer Inflation Expectations tracked by the Melbourne Institute.
WTI flirted with four-month highs near the $97.00 mark per barrel, always on the back of persistent effervescence in the US-Iran-Hormuz crisis.
Gold has managed to set aside three daily losses in a row, reclaiming the area above the $4,400 mark per troy ounce on the back of the mildly offered stance of the US Dollar, continuous geopolitical jitters and the generalised pre-US CPI caution.
- Gold rises above $4,400 despite jump in Treasury yields.
- Treasury buyback aims to contain pressure across long-dated bonds.
- Fed hike odds hold at 63% before inflation tests.
Gold (XAU/USD) rises over 1% on Wednesday, even as the US Dollar (USD) trims some of its earlier losses, after the US Treasury Department announced a bond buyback for the September 10 auction of 10- and 20-year instruments. This, along with investors waiting for the release of US inflation data, keeps the yellow metal underpinned near $4,400 at the time of writing.
XAU/USD consolidates near $4,400 before key US inflation data
Price action favors further consolidation for Gold, which has traded between $4,340 and $4,400 over the last two days. The rise in US Treasury yields, following the US Treasury's buyback announcement, pushed the 10-year benchmark note up five basis points to 4.845%, a headwind for the yellow metal.
The US Treasury said that it intends to buy up to $6 billion of outstanding securities set to mature in the 10- to 20-year tranche. This is the first operation under Secretary Scott Bessent's leadership to cap the rise in US bond yields, particularly at the long end of the curve, from the 10-year to the 30-year.
Earlier, the US ADP Employment Change 4-week average was 12K, up from the previous week's downward-revised 10K. This report, along with last Friday's Nonfarm Payrolls print and Fed Chair Warsh saying that jobs data is “consistent with full employment,” paves the way for a rate increase if needed, following Thursday’s and Friday's US inflation data.
Money markets indicate investors expect a quarter-point rate hike at the September 15-16 meeting. Odds stand at 63%, while hold odds are near 37%, according to Prime Terminal.
Besides US inflation data, traders will also eye the release of US Initial Jobless Claims and the preliminary release of the University of Michigan Consumer Sentiment Index for September.
XAU/USD technical outlook: Gold bounces at the 100-day SMA, target on $4,450
Gold price bounced off solid support at the 100-day Simple Moving Average (SMA) of $4,343, though it continued to trade laterally. The Relative Strength Index (RSI) shows that buyers are gaining momentum, but key resistance at $4,425, the high of September 8, caps XAU’s advance, preventing a retest of the $4,500 figure.
If buyers reclaim $4,500, the next area of interest becomes the 200-day SMA at $4,537. A breach of the latter will expose $4,600, followed by the psychological $4,650 and the August 25 high of the day at $4,697.
Downwards, if Gold retreats beneath $4,400, the 100-day SMA is the first line of defense. If cleared, the next support is the September 2 cycle low of $4,282 followed by the 50-day SMA at $4,261, and by the figure at $4,200.
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.
ING economists Carsten Brzeski and Franziska Biehl argue that while German inflation is set to rise above 3% and stay elevated into year-end, a repeat of 2022’s double-digit surge is unlikely. Weak demand, a softer labour market and exhausted pandemic savings are curbing pricing power, forcing companies to absorb cost pressures through lower profits rather than passing them on to consumers.
German firms absorb rising cost pressures
"And while inflation looks set to rise further over the coming months, potentially moving above 3% and remaining elevated until year-end, a return to 2022-style inflation still looks unlikely. Some knock-on effects from energy costs to other goods – though not visible yet – can be expected. However, the conditions that allowed inflation to become a broad-based problem four years ago are not currently present."
"The labour market has softened, making strong wage increases less of a priority than job security. Pandemic savings are also gone. In short, the financial ability and willingness to pay higher prices are much lower than after the pandemic. As a result, companies appear to face limits to their pricing power that simply did not exist in 2022."
"While pricing power may still exist upstream in the production chain, it increasingly disappears before reaching the consumer. This yields two important conclusions: (i) the pass-through of higher energy prices to final consumption, and hence inflation, continues to look unlikely; and (ii) if the consumer is not paying the bill, someone else will have to."
"Even if the inflation backdrop becomes more challenging in the months ahead, the dynamics look fundamentally different from those seen during the last energy crisis. Back in 2022, profits were widely viewed as part of the inflation problem, giving rise to terms such as "greedflation" and "shrinkflation". This time, it seems as if profits or better profit-squeezing, will dampen, not enhance, inflationary pressures."
"The war in the Middle East and surging energy prices have pushed up headline inflation across the eurozone. In Germany, the impact was only temporary, as the government's two-month fuel tax rebate helped curb the rise in prices. At 2.9% in August, inflation was roughly one percentage point higher than in February, but still nowhere near the double-digit rates reached during the 2022 energy crisis."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- DJIA slid off its opening high all session, hitting roughly 440 points lower under 52,400.
- Treasury tripled its long-end buyback to $6 billion and yields rose anyway.
- Bank of America clients bought the sixth-largest weekly total since 2008 last week.
The Dow Jones Industrial Average trades roughly 440 points lower and under 52,400, and its session high sits within two points of the opening print. The Treasury said this morning it will buy back up to $6 billion of longer-dated government debt on Thursday, triple the size of a standard operation. The announcement was built to put a floor under the long end. The long end sold off on it.
The same policy, three times the size, the other direction
Thursday's operation covers 10-year and 20-year notes and runs to $6 billion against a $2 billion standard, with later operations held at $4 billion or more. It follows the August 19 decision to at least double the size, which took effect today. Dealers had been offering more paper than the old cap could absorb, and the Treasury has been describing liquidity in the long end as badly impaired.
That August announcement did what it was built to do. The 10-year yield fell 6 basis points to 4.647% on the day and the 30-year fell 9 to 5.196%. The larger version produced the opposite tape, with the 10-year up to 4.841% today, its highest since November 2023, the 20-year at 5.314% and the 30-year through the 5.30% line.
The upgrade was announced on August 19 and priced across the three weeks since, and parts of the market had looked for as much as $8 billion. Tripling the operation counted as a shortfall.
A $6 billion bid does not fill a $2.1 trillion hole
The federal deficit is projected near $2.1 trillion for the fiscal year ending September 30, more than 6% of Gross Domestic Product (GDP), and the national debt passed $40 trillion last month. Brent Crude Oil trades above $101.00 for the first time since July after American forces destroyed five Iranian tankers on Tuesday. A buyback is funded by issuing other paper, so it changes the maturity of the debt rather than the amount, and the amount is what the long end is pricing.
The marginal seller is foreign. China held $633.4 billion of American government debt in June against $731.4 billion a year earlier, and Norway's sovereign fund has proposed cutting government bonds from 70% of its fixed income allocation to 50%, roughly $75 billion of Treasuries. Foreign investors put a record $600 billion into American equities in the year to March, outweighing their government and agency bond buying by the widest margin on record. Thursday's operation covers $6 billion of that, once.
The sixth-largest buying week since 2008 was last week
Bank of America (BAC) clients were net buyers of American equities for a second straight week, the sixth-largest weekly total in the firm's records going back to 2008. Institutions and hedge funds led it, and private clients sold for a sixth consecutive week. Buying ran across eight of the eleven sectors, led by technology, and growth exchange-traded funds (ETFs) took their first inflows in five weeks.
Positioning is evidence about who owns the next move, not a verdict on anyone. Length opened near a high has the least room and the shortest patience, which is what turns a drift into a slide. That flow covers the week to September 4. The lowest trade since the end of July came two sessions later.
Two inflation prints, then a vote
The four-week average of private payrolls printed 12K this morning after 10K. The Producer Price Index (PPI) lands Thursday, September 10 at 12:30 GMT, with consensus at 0.4% on the month and 5.3% YoY after 4.7%, and the core measure at 0.3% and 4.6% after 4.2%. Initial Jobless Claims print alongside it at 205K after 206K.
The Consumer Price Index (CPI) follows Friday, September 11 at 12:30 GMT, with the headline seen holding at 3.4% YoY and the core easing to 2.4% from 2.5%. The Michigan preliminary survey lands at 14:00 GMT with sentiment seen at 51 after 51.7. The August budget statement follows at 18:00 GMT, seen at a $202.5 billion deficit after $432 billion.
Futures price roughly 60% odds of a quarter-point increase on September 16, from a target range of 3.50% to 3.75% that the committee held in July over three dissents in favour of a hike. Friday's consumer print is the last inflation reading the Federal Open Market Committee (FOMC) sees before it votes. The deficit number that has been driving the long end arrives five and a half hours after it.
Levels and bias
Resistance: The 52,500 area is the first hurdle and the index gave it up on the way down this morning. Above it sits the 52,800 area, which holds both today's opening high and yesterday's close, then 53,000 and the 53,250 shelf. The 53,500 band that broke on September 4 comes next, with the early-August peak just short of 54,750, roughly 4.4% overhead.
Support: The session low in the 52,300 area is the lowest trade since the end of July and the first floor. Beneath it the 52,000 handle is the next round figure, with the late-July base near 51,600 behind it. The June low just above 49,900 is not in play.
Bias: Bearish while the index holds beneath 52,800, with the 52,000 handle the objective. The index has given back roughly three-quarters of the rally that ran from the end of July to the early-August peak, and that rally took four sessions where the give-back has taken five weeks, so the selling is orderly rather than forced and has produced no capitulation bar to mark a low. Today's 520-point range with the high inside the first minutes is expansion, not exhaustion. A daily close back above 52,800 voids the case and restores 53,000.
Dow Jones daily chart
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
- AUD/USD loses momentum after hitting a fresh four-month high at 0.7237 earlier on Wednesday.
- Rebounding US Treasury yields allow the US Dollar to recover its earlier losses.
- Middle East tensions and rising Oil prices continue to limit the Australian Dollar’s upside potential.
AUD/USD stabilizes around 0.7220 at the time of writing on Wednesday, after hitting a fresh four-month high at 0.7237 earlier in the day. The Australian Dollar (AUD) loses some momentum as the US Dollar (USD) rebounds, supported by rising US Treasury yields.
The benchmark 10-year US Treasury yield climbs to 4.85%, while the 30-year yield reaches 5.30%. The rise in yields comes after the United States (US) Treasury Department announced plans to buy back $6 billion of longer-term government debt, three times the usual size of its operations.
The operation is aimed at improving liquidity and supporting the smooth functioning of the US government bond market. However, longer-term yields move higher following the announcement, suggesting that the larger buyback is not enough to immediately ease selling pressure on US government debt.
Higher yields provide support to the US Dollar by increasing the relative attractiveness of US fixed-income assets. The US Dollar Index (DXY), which measures the value of the Greenback against a basket of six major currencies, consequently erases its earlier losses and returns to around flat territory on Wednesday.
The Greenback's rebound curbs the advance in AUD/USD, which had previously benefited from encouraging Chinese inflation data. China's Consumer Price Index (CPI) rose by 0.4% in August after contracting by 0.1% in July, beating expectations for a 0.3% increase. On an annual basis, inflation accelerated to 0.8% from 0.5% previously, in line with market expectations.
The Australian monetary policy outlook also remains supportive of the Australian Dollar. Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser called on Tuesday for further action to bring inflation under control.
The upside potential for AUD/USD remains limited, however, by risk aversion linked to escalating tensions in the Middle East and rising Oil prices. Hostilities involving the US, Iran and the Houthis increase the risk of a broader regional conflict, weighing on investor sentiment.
Market attention now turns to the release of the US Producer Price Index (PPI) due on Thursday, ahead of the Consumer Price Index (CPI) on Friday.
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.05% | -0.06% | -0.35% | 0.16% | -0.02% | 0.15% | 0.05% | |
| EUR | 0.05% | 0.01% | -0.30% | 0.21% | 0.03% | 0.21% | 0.11% | |
| GBP | 0.06% | -0.01% | -0.29% | 0.21% | 0.04% | 0.21% | 0.11% | |
| JPY | 0.35% | 0.30% | 0.29% | 0.51% | 0.33% | 0.47% | 0.41% | |
| CAD | -0.16% | -0.21% | -0.21% | -0.51% | -0.18% | -0.01% | -0.10% | |
| AUD | 0.02% | -0.03% | -0.04% | -0.33% | 0.18% | 0.18% | 0.09% | |
| NZD | -0.15% | -0.21% | -0.21% | -0.47% | 0.01% | -0.18% | -0.09% | |
| CHF | -0.05% | -0.11% | -0.11% | -0.41% | 0.10% | -0.09% | 0.09% |
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 Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
- USD/JPY holds near recent lows amid broad-based Japanese Yen strength.
- The US Dollar finds some support following the Treasury’s buyback announcement.
- US PPI and CPI data take centre stage ahead of next week’s Fed meeting.
USD/JPY remains on the back foot on Wednesday but lacks follow-through selling as the US Dollar (USD) recovers following the Treasury’s announcement of a larger bond buyback. The pair trades around 153.50 after briefly falling below 153.00, its lowest level since February.
The US Treasury said it could buy back up to $6 billion of longer-dated debt on Thursday, above the previously indicated minimum of $4 billion per operation. US Treasury yields moved higher following the announcement, with the benchmark 10-year yield rising to around 4.85%, its highest level since November 2023.
The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 98.80 after recovering from 98.60, its lowest level since August 21.
Even so, the near-term technical and fundamental picture still favours the Japanese Yen (JPY). Expectations of faster Bank of Japan (BoJ) tightening, with a rate hike fully priced in for the September 17-18 meeting, are fuelling the unwinding of Yen-funded carry trades and the repatriation of overseas funds. These flows are helping the Yen strengthen without fresh intervention.
Traders now turn their attention to Thursday’s US Producer Price Index (PPI) and Friday’s Consumer Price Index (CPI) ahead of the Federal Reserve’s (Fed) September 15-16 meeting. According to the CME FedWatch Tool, markets price in around a 60% chance of a 25-basis-point rate hike. An upside surprise in inflation could bolster the case for higher borrowing costs and help USD/JPY recover, while softer readings could push the pair lower.
Yen upside risk builds as USDJPY gravitates toward key BoJ decision
Strategists at Scotiabank highlight that “risk for the JPY remains firmly tilted to the upside” as market participants reassess sentiment and positioning, which “look increasingly offside in a market that has shifted from official intervention support and evolved to fundamentally-driven BoJ-led gains.” They note that “data releases have been limited and the calendar remains relatively empty into the end of the week, offering little in terms of event risk ahead of the BoJ decision on September 18th—where a 25bpt rate hike is fully priced.”
Against this backdrop, Scotiabank observes that “for USDJPY, recent price action leans toward support around 153 as we note the absence of any additional support ahead of the 2026 low near 152.” On the topside, they add that “in terms of resistance we now expect it at 155, given its role in providing prior support.”
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.06% | -0.07% | -0.37% | 0.16% | -0.02% | 0.13% | 0.02% | |
| EUR | 0.06% | 0.00% | -0.29% | 0.24% | 0.04% | 0.21% | 0.10% | |
| GBP | 0.07% | -0.01% | -0.27% | 0.23% | 0.05% | 0.21% | 0.10% | |
| JPY | 0.37% | 0.29% | 0.27% | 0.52% | 0.33% | 0.46% | 0.39% | |
| CAD | -0.16% | -0.24% | -0.23% | -0.52% | -0.19% | -0.03% | -0.14% | |
| AUD | 0.02% | -0.04% | -0.05% | -0.33% | 0.19% | 0.16% | 0.07% | |
| NZD | -0.13% | -0.21% | -0.21% | -0.46% | 0.03% | -0.16% | -0.10% | |
| CHF | -0.02% | -0.10% | -0.10% | -0.39% | 0.14% | -0.07% | 0.10% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Scotiabank strategists Shaun Osborne and Eric Theoret highlight ongoing Japanese Yen (JPY) outperformance, with USD/JPY drifting toward key support near 153 and the 2026 low around 152. Markets fully price a 25 bp Bank of Japan (BoJ) hike on September 18. They see risks tilted to further Yen gains as positioning looks increasingly offside and resistance now comes in around 155.
Upside risk for JPY as BoJ looms
"The JPY is outperforming with a modest 0.2% gain and clearly ignoring the terms of trade implications of the latest rally in oil prices."
"Risk for the JPY remains firmly tilted to the upside as market participants assess the state of sentiment and positioning that look increasingly offside in a market that has shifted from official intervention support and evolved to fundamentally-driven BoJ-led gains."
"Data releases have been limited and the calendar remains relatively empty into the end of the week, offering little in terms of event risk ahead of the BoJ decision on September 18th—where a 25bpt rate hike is fully priced."
"For USD/JPY, recent price action leans toward support around 153 as we note the absence of any additional support ahead of the 2026 low near 152."
"In terms of resistance we now expect it at 155, given its role in providing prior support."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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