Forex News
- EUR/USD gains follow-through traction as the overnight slide in US bond yields weighs on the USD.
- Geopolitical risks and a hawkish Fed limit USD losses, while France’s debt crisis caps the Euro.
- The bearish technical setup also warrants caution before positioning for any further appreciation.
The EUR/USD pair attracts buyers for the second straight day, rising to the 1.1225-1.1230 area during the Asian session on Friday amid a weak US Dollar (USD). Spot prices, however, remain confined within a range held since the beginning of this month, warranting some caution for bulls.
President Donald Trump said on Thursday that the US would refrain from resuming military strikes on Iran before the November 3 midterm elections, which, along with the overnight slide in US bond yields, prompts some USD profit-taking. The geopolitical risk premium, however, remains in play amid the US-Iran standoff over Tehran's nuclear program. Moreover, the US Federal Reserve's (Fed) hawkish tilt should help limit deeper USD losses and cap the EUR/USD pair.
Furthermore, concerns about France’s deepening debt levels and political gridlock ahead of next year’s election might hold back traders from placing aggressive bullish bets on the shared currency. This, along with a bearish technical setup, suggests that strong follow-through buying is needed to confirm that the EUR/USD pair has formed a near-term bottom and is positioned for an extension of this week's modest recovery from the 1.1160 region, or the lowest level since May 2025.
Against the backdrop of a fall from the August monthly swing high, the recent range-bound price action might still be categorized as a bearish consolidation phase. Moreover, the Relative Strength Index (RSI) around 50.4 signals neutral momentum after recovering from oversold readings, while the Moving Average Convergence Divergence (MACD) has turned modestly positive, hinting at a potential pause rather than a clear reversal against the prevailing overhead resistance.
Hence, any subsequent move up is more likely to confront stiff resistance near the 1.1280 region, or the top boundary of the trading range. This is closely followed by the 1.1300 mark, which, if cleared, could trigger a short-covering rally to the next relevant hurdle near the 1.1355-1.1360 zone. The move up, however, might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly amid the underlying bullish sentiment surrounding the USD.
Nevertheless, the broader setup reinforces a broader downside structure. On the downside, weakness below the 1.1200 mark will expose the trading range support near the 1.1160 region. Failure to defend the said area will be seen as a fresh trigger for bearish traders and set the stage for deeper losses.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
EUR/USD 4-hour 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.
- EUR/JPY may fall toward the lower boundary of the descending channel around 176.20.
- The 14-day Relative Strength Index is at 35.8, signalling persistent yet moderating downside momentum.
- The primary barrier lies at the nine-day EMA at 177.76.
EUR/JPY gains ground for the second consecutive day, trading around 177.40 during Asian hours on Friday. Technical analysis of the daily chart shows that the currency cross is moving downward within the descending channel pattern, suggesting a persistent bearish bias.
The EUR/JPY cross is retaining a bearish near-term bias as it holds below both the nine- and 50-period Exponential Moving Averages (EMAs). The short-term EMA is positioned beneath the longer one, and price remains under both, suggesting that recent rebounds are capped by overhead supply, while the 14-day Relative Strength Index (RSI) around 35.8 stays just above oversold territory, hinting at persistent but moderating downside pressure rather than an imminent bullish reversal.
The EUR/JPY cross may find initial support at the lower boundary of the descending channel around 176.20, followed by an 11-month low of 175.70, recorded in November 2025. Further declines below this confluence support zone would expose the 14-month low of 169.72.
On the upside, the EUR/JPY cross could test the primary resistance at the nine-day EMA of 177.76, followed by the 50-day EMA at 180.77. A break above these moving averages would support the EUR/JPY cross to approach the upper boundary of the descending channel around 184.00, followed by the all-time high of 187.95 set on April 17.
Moulin flags energy-driven inflation but downplays second-round risks
ECB's Moulin delivers a mid-range impact at 6.2/10, exactly in line with the historic average on FXS Speechtracker, signaling no major shift in perceived policy stance. The focus on inflation being "100% energy" and the absence of second-round effects leans mildly dovish, suggesting limited urgency for aggressive tightening despite acknowledging an inflationary shock.
However, the warning that the geopolitical shock is transmitting into a financial shock introduces a cautious tone that tempers any dovish read. Moulin’s emphasis on resilient Euro area growth supports the view that the ECB can afford to be patient, reinforcing a balanced bias that is unlikely to materially reprice Euro expectations in the near term.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.14% | -0.09% | 0.09% | -0.09% | -0.27% | -0.30% | -0.22% | |
| EUR | 0.14% | 0.06% | 0.23% | 0.06% | -0.12% | -0.13% | -0.09% | |
| GBP | 0.09% | -0.06% | 0.21% | 0.04% | -0.15% | -0.19% | -0.09% | |
| JPY | -0.09% | -0.23% | -0.21% | -0.18% | -0.37% | -0.38% | -0.29% | |
| CAD | 0.09% | -0.06% | -0.04% | 0.18% | -0.21% | -0.21% | -0.11% | |
| AUD | 0.27% | 0.12% | 0.15% | 0.37% | 0.21% | -0.01% | 0.10% | |
| NZD | 0.30% | 0.13% | 0.19% | 0.38% | 0.21% | 0.01% | 0.10% | |
| CHF | 0.22% | 0.09% | 0.09% | 0.29% | 0.11% | -0.10% | -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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
- Gold gains some follow-through traction as the overnight slide in US bond yields weighs on the USD.
- Geopolitical uncertainties and the hawkish Fed should limit deeper USD losses and cap bullion gains.
- The recent range-bound price action further warrants some caution for aggressive bullish traders.
Gold (XAU/USD) attracts buyers for the second consecutive day on Friday, recovering further from a two-month low, around the $4,066 area, touched earlier this week. The US Dollar (USD) moves away from its highest level since April 2025 amid the overnight pullback in US bond yields and lifts the commodity to the top end of its weekly range. Any meaningful appreciation for the precious metal, however, seems elusive as geopolitical uncertainties and the US Federal Reserve's (Fed) hawkish stance could help limit deeper USD losses.
President Donald Trump said on Thursday that the US would refrain from resuming military strikes on Iran before the November 3 midterm elections and added that the US was engaged in productive discussions with Iran. This kept a lid on crude oil prices, which helped ease concerns about runaway inflation. Adding to this, a well-received 30-year bond auction triggered a corrective decline in US bond yields, prompting USD bulls to take some profits off the table. This, in turn, is seen as a key factor offering some support to the Gold price.
Meanwhile, investors remain worried about inflation risks stemming from volatile energy prices amid the US-Iran standoff over Tehran's nuclear program, escalating Middle East conflicts and disruptions around the Strait of Hormuz. US Vice President JD Vance said that Iran must make a meaningful reduction in its nuclear enrichment capacity to satisfy US demands and end the seven-month-old war. Iran’s Atomic Energy Chief Mohammad Eslami, however, rejected US demands to abandon Uranium enrichment or give up its stockpiles.
Adding to this, intensifying fighting between the Iran-aligned Houthis in Yemen and the Saudi-led military coalition keeps the geopolitical risk premium in play. Moreover, traders are still pricing in over an 80% chance that the US central bank will raise borrowing costs by the end of this year, which backs the case for the emergence of some USD dip-buying. This might cap gains for the non-yielding Gold as traders now look to the preliminary University of Michigan US Consumer Sentiment and Inflation Expectations Index for a fresh impetus.
UOB sees Fed tightening path extending into early 2027 with inflation risks still in focus
Analysts at UOB Group reiterate that, “we expect two additional hikes, in Dec 2026 and 1Q 2027, thereafter on hold for rest of 2027 as inflation fades in a more durable fashion in the later part of 2027 as the most likely course.” At the same time, they caution that they “continue to keep in mind the risks of further policy tightening if the inflation trajectory becomes more persistent by the combination of higher energy prices, trade tariffs and AI-related factors.” In terms of near-term dynamics, UOB has “ruled out a back-to-back rate hike in the October FOMC, which falls less than a week from the midterm elections (3 Nov),” underscoring their view that the committee is unlikely to move again so close to the political calendar.
XAU/USD 4-hour chart
Technical Analysis
The XAU/USD pair remains confined in a familiar range held over the past two weeks or so and has been showing some resilience below the 78.6% Fibonacci retracement level of the June-August upswing. Meanwhile, the Moving Average Convergence Divergence (MACD) advances with its latest reading at 5.33, while the Relative Strength Index (14) rises toward 59, together hinting at improving momentum that has yet to overcome the overhead structural barriers. Hence, the top boundary of the short-term trading range, around the $4,200 mark, might continue to act as an immediate strong hurdle.
This is followed by the 100-period Simple Moving Average (SMA) on the 4-hour chart, at $4,227, and the 61.8% Fibo. retracement level at $4,231. A sustained break above this cluster would open the way toward the 50.0% retracement at $4,320 and then the 38.2% level at $4,409, with the 23.6% retracement at $4,519 acting as a more distant cap. On the downside, initial support is located at the 78.6% Fibo. retracement at $4,104, where buyers are expected to show up on a pullback, while the broader bias remains constrained by the dense resistance overhead.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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 Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.13% | -0.08% | 0.08% | -0.09% | -0.24% | -0.24% | -0.21% | |
| EUR | 0.13% | 0.05% | 0.21% | 0.04% | -0.11% | -0.08% | -0.09% | |
| GBP | 0.08% | -0.05% | 0.17% | 0.03% | -0.16% | -0.12% | -0.08% | |
| JPY | -0.08% | -0.21% | -0.17% | -0.16% | -0.33% | -0.31% | -0.27% | |
| CAD | 0.09% | -0.04% | -0.03% | 0.16% | -0.19% | -0.16% | -0.11% | |
| AUD | 0.24% | 0.11% | 0.16% | 0.33% | 0.19% | 0.03% | 0.09% | |
| NZD | 0.24% | 0.08% | 0.12% | 0.31% | 0.16% | -0.03% | 0.05% | |
| CHF | 0.21% | 0.09% | 0.08% | 0.27% | 0.11% | -0.09% | -0.05% |
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).
- The US Dollar Index declines further to near 102.02 as US Treasury Yields retreat.
- US President Trump confirms not attacking Iran before Mid-term elections.
- US CPI data will be key trigger next week.
The US Dollar (USD) extends its decline against its major peers on Friday as United States (US) Treasury Yields correct after failing to extend the rally.
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 Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.12% | -0.08% | 0.08% | -0.08% | -0.24% | -0.24% | -0.21% | |
| EUR | 0.12% | 0.05% | 0.21% | 0.04% | -0.11% | -0.08% | -0.10% | |
| GBP | 0.08% | -0.05% | 0.19% | 0.02% | -0.15% | -0.12% | -0.08% | |
| JPY | -0.08% | -0.21% | -0.19% | -0.16% | -0.32% | -0.31% | -0.27% | |
| CAD | 0.08% | -0.04% | -0.02% | 0.16% | -0.19% | -0.16% | -0.11% | |
| AUD | 0.24% | 0.11% | 0.15% | 0.32% | 0.19% | 0.02% | 0.08% | |
| NZD | 0.24% | 0.08% | 0.12% | 0.31% | 0.16% | -0.02% | 0.05% | |
| CHF | 0.21% | 0.10% | 0.08% | 0.27% | 0.11% | -0.08% | -0.05% |
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).
In the Asian trade, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.1% lower to near 102.02. The DXY faced significant selling pressure on late Thursday after failing to extend the rally beyond its yearly high of 102.54 posted earlier this year. 10-year US Treasury Yields have retreated to near 5.23% from its Thursday’s high of 5.35%.
Yields on US-backed securities came under pressure as oil prices cut gains after President Donald Trump ruled out fears of renewed military activities against Iran till Mid-term elections.
“We [US] will not be attacking Iran at any time prior to the Midterm Elections to be held in the United States on November 3rd,” US President Trump said through a post on Truth Social, adding, “We are having productive discussions with the Islamic Republic of Iran.”
Going forward, the major trigger for the US Dollar will be the US Consumer Price Index (CPI) data for September, which will be released on Wednesday. The inflation is expected to have a significant impact on Federal Reserve’s (Fed) interest rate expectations.
Currently, the CME FedWatch tool shows that financial markets have priced in at least one interest rate hike in the remainder of the year.
US Dollar Index Technical Analysis
In the daily chart, Dollar Index Spot trades at 102.03, holding above the 20-day exponential moving average (EMA) at 101.24, which suggests a bullish near-term bias with the trend underpinned by dynamic support. The Relative Strength Index (14) at 67.91 hovers just below overbought territory, hinting that upside momentum remains strong but may be entering a more mature phase where further gains could be slower or prone to brief pauses.
On the downside, initial support is located at the 20-day EMA at 101.24, where a decisive break would weaken the bullish structure and open the door to a deeper corrective phase toward prior price congestion zones. Looking up, the yearly high at 102.54 is the major hurdle.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
- Silver appreciates due to a decline in oil prices eases inflationary concerns and Fed rate hike expectations.
- Oil prices fall after President Trump reported "productive" Iran discussions and ruled out military strikes before midterm elections.
- CME FedWatch Tool suggests that markets price in nearly a 17.7% chance of a Fed 25-basis-point rate hike in October.
Silver price (XAG/USD) gains ground after three days of losses, trading around $60.10 per troy ounce during Asian hours on Friday. Non-yielding Silver gains support as a decline in oil prices eases inflationary concerns and Fed rate hike expectations.
Oil prices eased following statements from US President Donald Trump on social media, where he announced that the US was engaged in "productive discussions" with Iran and would refrain from attacking the country before the midterm elections.
Markets are now pricing in nearly a 17.7% chance that the US central bank will lift the interest rate at least 25 basis points (bps) at the policy meeting later this month, down from 38% a week ago, the CME FedWatch tool showed. Markets are pricing in an 83% chance of a hike at the Fed's December meeting.
Fed’s Musalem delivers a firmly hawkish message, with a 7.3/10 FXS Speechtracker score essentially in line with the 7.2/10 historical average, underscoring continuity rather than escalation in tone. The emphasis that “more monetary policy firming will be required” to bring inflation back to 2% while the economy and job market are described as strong and balanced reinforces a narrative of additional rate hikes rather than cuts, supportive of the Dollar and yields. Musalem’s focus on persistent demand pressures, anchored market inflation expectations, and structurally higher real rates driven by strong capital demand and AI-related investment points to a higher-for-longer rate environment.
The FXS Fed Sentiment Index slipped by 0.25 points to 138.33, indicating a modest pullback in perceived hawkishness despite remaining deep in hawkish territory. With the index well above the neutral 100 threshold, the speech still signals a policy stance biased toward further tightening, even as the marginal decline suggests markets may have already priced in much of this hawkish guidance captured by the FXS Speechtracker.
Fed’s Waller delivered a distinctly hawkish message, with an 8/10 FXS Speechtracker score standing above the 7.2/10 historical average and reinforcing expectations for tighter policy. The emphasis that “more hikes [are] needed” while allowing that they need not come at consecutive meetings signals a preference for a higher terminal rate but with tactical flexibility, especially as Waller highlights persistent inflationary forces from AI investment and energy shocks alongside a strengthening economy and a solid labor market. Concern that inflation has been above target for nearly 5-1/2 years and could unanchor expectations underscores a bias toward further tightening, supportive of the Dollar and negative for risk-sensitive currencies.
Technical Analysis:
In the daily chart, XAG/USD trades at $60.10, maintaining a bearish near-term bias as spot remains under both the short-term and medium-term Exponential Moving Averages (EMAs). The nine- and 50-period EMAs sit overhead, suggesting the white metal is still capped by a layered technical ceiling, while the 14-day Relative Strength Index (RSI) around 40.7 hints at lingering downside pressure rather than outright oversold conditions.
On the topside, initial resistance is located at the nine-period EMA near $60.74, with a more robust barrier at the 50-period EMA around $63.39, where a sustained break would be needed to ease the current bearish tone and open the door to a more constructive recovery. With no clear structural support derived from the present dataset, any further slide from current levels would leave the metal vulnerable to discovering fresh demand zones lower down the chart.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
- NZD/USD edges higher to around 0.5615 in Friday’s early Asian session.
- Fed’s Waller suggested rates did not need to rise immediately.
- Westpac economists anticipate the RBNZ to pause in October but raise OCR in December.
The NZD/USD pair gains traction to near 0.5615 during the early Asian trading hours on Friday. The US Dollar (USD) weakens against the New Zealand Dollar (NZD) amid easing Treasury bond yields. Traders weigh lingering inflation concerns and the outlook for Federal Reserve (Fed) interest rates. The Michigan Consumer Sentiment Index data for October will be released later on Friday.
Last month, the Fed voted unanimously to hike the policy rate by a quarter of a percentage point. St. Louis Fed President Alberto Musalem said on Thursday that the US central bank will need to hike rates again to bring inflation back to its 2% target, although he declined to say what policymakers should do at their meeting later this month.
Fed Governor Christopher Waller stated that further rate hikes will likely be needed to lower inflation to the Fed's 2% target, but added there was "flexibility" about the pace of increases and left the door open for a pause at the upcoming October meeting.
Easing expectations for further rate increases by the Fed weigh on bond yields. The benchmark 10-year Treasury yield declined more than 4 basis points (bps) to 5.227% after hitting its highest level since 2002 this week. Meanwhile, the 30-year Treasury bond yield fell more than 5 bps to 5.602% after trading around a 24-year high recently.
Traders are pricing in 17.7% odds of a rate hike in October and an 83% probability of an increase in December, according to the CME FedWatch tool.
Westpac analysts still expect the Reserve Bank of New Zealand to hold the Official Cash Rate (OCR) steady at 2.75% this month, with a 25 bps rise in December, and two further increases in early 2027.
USD extends gains as oil and yields surge but Fed expectations stay muted
Strategists at Scotiabank highlight that the "USD continues to show broad strength and is entering Thursday’s NA session with gains against all of the G10 currencies," even as underlying rate expectations remain relatively contained. They note that the geopolitical backdrop is feeding directly into core markets, with "the impact on oil prices and global bond yields… clear, with WTI up $4/bbl on the day and trading back above $90/bbl as the US 10Y threatens fresh multi-decade highs above 5.35% nearing levels last seen in 2002." Despite these moves, Scotiabank points out that "Fed pricing remains muted with only 5bpts of tightening priced for October and a cumulative 26bpts by December, showing little reaction to the latest turn in oil prices."
Waller flags more Fed hikes but signals flexible pace, keeping Dollar supported
Fed's Waller delivered a distinctly hawkish message, with an FXS Speechtracker score of 8/10, above the established baseline of 7.2/10, underscoring a stronger-than-usual tightening bias. The emphasis that "more hikes [are] needed" but that they need not come at consecutive meetings signals a preference for a higher terminal rate with tactical flexibility, while highlighting AI-related investment and ongoing energy shocks as persistent inflation drivers alongside a strengthening economy and a still "solid and stable" labor market. Concern that inflation has been above target for nearly 5-1/2 years and could unanchor expectations reinforces a bias toward further policy tightening, a configuration that is typically supportive for the Dollar.
The FXS Fed Sentiment Index rose by 0.42 points to 138.34, firmly in hawkish territory and consistent with the elevated FXS Speechtracker reading. This move confirms that market-implied Fed stance has shifted further toward tightening expectations, reinforcing a hawkish policy narrative that should remain a medium-term positive for the Dollar.
Technical Analysis: NZD/USD retains a negative tone below the 100-day SMA
In the daily chart, NZD/USD keeps a bearish near-term tone as spot holds beneath the 20-period Bollinger middle band the 100-day moving average (MA). Price is also capped by the upper Bollinger band 8, reinforcing a downside bias despite the Relative Strength Index (14) edging up toward 33, which only hints that previous oversold conditions may be easing rather than signaling a bullish reversal.
On the topside, initial resistance is located at the Bollinger middle band around 0.5665, followed by the upper band at 0.5778 and then the 100-day MA at 0.5795, where a sustained break would be needed to challenge the prevailing bearish structure. On the downside, the lower Bollinger band at 0.5555 offers immediate support, and a daily close below this level would open the door to a fresh leg lower toward the mid-0.55s.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.
The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.
Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.
The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
- USD/CAD falls as the US Dollar struggles amid reduced safe-haven demand after Trump reported "productive" Iran talks and paused pre-election strikes.
- The commodity-linked CAD may struggle amid lower oil prices following Trump’s remarks.
- Leaked reports indicated the US had prepared three-day strike plans targeting Iranian military and energy infrastructure.
USD/CAD extends its losses for the second successive day, trading around 1.4210 during Asian hours on Friday. The pair depreciates as the US Dollar (USD) loses safe-haven demand, following statements from US President Donald Trump on social media, where he announced that the US was engaged in "productive discussions" with Iran and would refrain from attacking the country prior to the midterm elections.
Markets are now pricing in nearly a 17.7% chance that the US central bank will lift the interest rate at least 25 basis points (bps) at the policy meeting later this month, down from 38% a week ago, the CME FedWatch tool showed. Markets are pricing in an 83% chance of a hike at the Fed's December meeting.
Fed’s Musalem flags need for further tightening as strong demand keeps rates elevated
Fed’s Musalem delivers a slightly more hawkish-than-usual message, with the 7.3/10 FXS Speechtracker score just above the 7.2/10 historical average, underscoring continuity rather than a regime shift in tone. The emphasis that “more monetary policy firming will be required” to return inflation to 2% promptly, alongside comments that the economy is “pretty strong” and the job market “balanced and stable,” reinforces a narrative of persistent demand-driven inflation and a higher-for-longer rate profile, even as Musalem stresses going into meetings with an open mind. Musalem’s remarks on AI-related investment, strong demand for capital, and an unsustainable fiscal path suggest structural upward pressure on yields, supporting a view that the Dollar remains underpinned by elevated real rates and anchored inflation expectations.
The FXS Fed Sentiment Index slipped by 0.25 points to 138.33, indicating a modest pullback in perceived hawkishness despite the still-strong tightening bias highlighted in the speech. With the index firmly above the 100 neutral line, the Fed remains in clear hawkish territory even after the small decline, aligning with Musalem’s call for additional policy firming and helping explain why the Dollar and broader rate expectations stay supported in the FXS Speechtracker framework.
Waller flags more Fed hikes but signals flexible timing, supporting Dollar upside
Fed’s Waller delivered a distinctly hawkish message, with an FXS Speechtracker score of 8/10, stronger relative to the historical average of 7.2/10. The insistence that “more hikes [are] needed” while allowing that they need not come at consecutive meetings underscores a bias toward further tightening but with tactical flexibility, reinforcing the view that policy will stay restrictive for longer. Emphasis on persistent inflation drivers, including AI-related investment and ongoing energy shocks, alongside a “solid and stable” labor market and strengthening growth in the second half of 2026, points to a Fed that is more concerned about entrenched price pressures than near-term activity risks.
The FXS Fed Sentiment Index rose by 0.42 points to 138.34, firmly in hawkish territory and consistent with the elevated FXS Speechtracker reading. This move signals that markets should continue to price a higher-for-longer Fed path, a backdrop that typically supports the Dollar against lower-yielding peers.
However, the downside of the USD/CAD pair could be restrained as the commodity-linked Canadian Dollar (CAD) could also face challenges amid lower oil prices following Trump’s remarks. While asserting that record volumes of crude were currently passing through the Strait of Hormuz, President Trump emphasized that the US naval blockade of Iranian ports would remain fully operational.
Analysts at Scotiabank observe that the Canadian Dollar’s latest moves point to a period of consolidation, noting that “recent price action in the CAD is suggestive of consolidation and a reassessment of the near-term path following an astonishing run of weakness from early September.” They see the market using this pause to reassess the trajectory for USDCAD after the sharp depreciation in the Loonie over recent weeks.
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
- USD/JPY attracts fresh sellers following an intraday uptick led by Japan’s weak macro data.
- BoJ rate hike bets and looming intervention risks support the JPY, capping gains for the pair.
- A softer USD further acts as a headwind for spot prices, though the downside seems limited.
The USD/JPY pair struggles to capitalize on a modest Asian session uptick on Friday, now trading near the lower end of its daily range, below the 158.00 mark amid a broadly weaker US Dollar (USD). Spot prices, however, remain confined in a familiar range held over the past week or so amid mixed fundamental cues.
The Japanese Yen (JPY) weakened a bit after data released earlier today showed that Japan’s Household Spending shrank for a ninth successive month in August. Meanwhile, the fall was less than expected, which comes on top of an increase in Japan’s real wages for the eighth month in a row and reaffirms bets for further policy tightening by the Bank of Japan (BoJ). Furthermore, traders remain on high alert amid speculation that authorities will step in to prop up the JPY. This, along with a modest USD weakness, acts as a headwind for the USD/JPY pair.
BoJ’s gradual tightening chips away at Yen’s carry appeal
Rabobank’s FX strategists note that, “despite announcing an as expected rate hike at its September policy meeting, the BoJ’s guidance was not as hawkish as the market had hoped for.” Even so, they argue that “the BoJ’s policy of gradually raising interest rates is still eroding the JPY’s funding currency appeal,” as the steady tightening cycle undermines the Yen’s traditional role as a low-cost vehicle for carry trades.
President Donald Trump said on Thursday that the US will not resume military strikes on Iran before the November 3 midterm congressional election, keeping a lid on crude oil prices and easing concerns over runaway inflation. Adding to this, a 30-year bond auction met with solid demand and triggered a corrective decline in US Treasury yields, dragging the USD Index (DXY), which tracks the Greenback against a basket of currencies, away from an 18-month top. This further contributes to keeping a lid on any meaningful upside for the USD/JPY pair.
Meanwhile, traders are still pricing in over an 80% chance that the US Federal Reserve (Fed) will raise borrowing costs in December. Apart from this, persistent geopolitical uncertainties stemming from the US-Iran standoff over Tehran's nuclear program could support the safe-haven buck and the USD/JPY pair. In fact, Iran's head of the Atomic Energy Organization, Mohammad Eslami, was quoted as saying that the country will not stop uranium enrichment or give up its uranium stockpile. This keeps the geopolitical risk premium in play and favors USD bulls.
Nevertheless, the aforementioned mixed fundamental backdrop is holding back traders from placing aggressive directional bets, leading to the USD/JPY pair's range-bound price action. Market participants now look forward to the release of the Preliminary University of Michigan US Consumer Sentiment and Inflation Expectations Index. Furthermore, speeches from influential FOMC members and the incoming geopolitical headlines will drive USD demand, which, in turn, might produce short-term opportunities heading into the weekend.
USD/JPY 4-hour chart
Technical Analysis
The USD/JPY pair maintains a bullish near-term bias as it holds above the 100-period Simple Moving Average (SMA) on the 4-hour chart. Moreover, the recent range-bound action might still be categorized as a bullish consolidation phase, suggesting the broader uptrend remains intact despite the lack of a strong buying interest.
Meanwhile, initial support is seen at the 157.59 area, where the 100-period SMA offers underlying demand and would be expected to cushion deeper pullbacks while it holds. On the top side, the 158.50 region, or the top end of the trading range, could act as an immediate hurdle and a sustained strength beyond will reaffirm the positive outlook.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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 Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.14% | -0.11% | -0.03% | -0.11% | -0.24% | -0.21% | -0.22% | |
| EUR | 0.14% | 0.03% | 0.11% | 0.02% | -0.09% | -0.04% | -0.10% | |
| GBP | 0.11% | -0.03% | 0.08% | 0.02% | -0.11% | -0.05% | -0.07% | |
| JPY | 0.03% | -0.11% | -0.08% | -0.07% | -0.21% | -0.16% | -0.18% | |
| CAD | 0.11% | -0.02% | -0.02% | 0.07% | -0.16% | -0.10% | -0.10% | |
| AUD | 0.24% | 0.09% | 0.11% | 0.21% | 0.16% | 0.05% | 0.06% | |
| NZD | 0.21% | 0.04% | 0.05% | 0.16% | 0.10% | -0.05% | -0.00% | |
| CHF | 0.22% | 0.10% | 0.07% | 0.18% | 0.10% | -0.06% | 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).
- GBP/USD gains traction to near 1.3240 in Friday’s early Asian session.
- Fed’s Waller said no need for rate hikes to come at consecutive meetings.
- UK faces a challenging fiscal picture, undermining the British Pound.
The GBP/USD pair gathers strength to around 1.3240 during the early Asian trading hours on Friday. The US Dollar (USD) softens against the British Pound (GBP) following comments from Federal Reserve (Fed) Governor Christopher Waller. Traders will keep an eye on the Michigan Consumer Sentiment Index data for October later on Friday.
Fed Governor Christopher Waller said on Thursday that additional rate hikes will likely be needed to lower inflation to the Fed's 2% target, but added there was "flexibility" about the pace of increases and left the door open for a pause at the upcoming October meeting.
Markets are now pricing in nearly a 17.7% chance that the US central bank will lift the interest rate at least 25 basis points (bps) at the policy meeting later this month, down from 38% a week ago, the CME FedWatch tool showed. Markets are pricing in an 83% chance of a hike at the Fed's December meeting.
However, UK fiscal concerns could weigh on the Cable in the near term. After the UK's long-term borrowing costs reached their highest level since the 1990s last week, the focus remains firmly on Finance Minister John Healey's first budget on October 28.
Earlier this week, the UK chancellor said the country’s largest lenders are facing a “challenging fiscal picture” but stopped short of guiding whether he will hit banks with higher taxes in the Budget later this month.
GBP range bias holds as UOB flags limited downside
Strategists at UOB Group note that their previous constructive stance on GBP was quickly undermined by the latest price action. Following Tuesday’s move, they had highlighted on 07 Oct, with spot at 1.3265, that “there has been a slight increase in upward momentum, and GBP may edge higher toward 1.3315.” However, that view “was invalidated quickly as GBP fell below our ‘strong support’ at 1.3200 with a low of 1.3194.”
In their updated 1–3 week view, UOB now observes that “there has been a slight increase in downward momentum, but it is insufficient to indicate a sustained decline.” From here, they judge that “GBP could edge lower, but any decline is likely to be part of a lower range of 1.3140/1.3280.” In their words, “GBP is unlikely to break clearly below 1.3140,” reinforcing a broadly range-bound bias despite the recent setback.
Fed’s Musalem flags need for further tightening as inflation stays elevated
Fed’s Musalem delivers a firmly hawkish message, with a 7.3/10 FXS Speechtracker score essentially in line with the 7.2/10 historical average, underscoring continuity rather than a tonal shift. The emphasis that “more monetary policy firming will be required” to return inflation to 2% while the economy and job market remain “pretty strong” and “balanced” reinforces a narrative of additional rate hikes rather than cuts, even as Musalem stresses going into meetings with an open mind. Musalem’s comments on persistent demand pressures, anchored market inflation expectations, and structurally higher real yields driven by AI investment and fiscal deficits point to a higher-for-longer rate environment that should support the Dollar and keep risk assets sensitive to policy repricing.
The FXS Fed Sentiment Index slipped by 0.25 points to 138.33, indicating a modest pullback in perceived hawkishness but still firmly in hawkish territory well above the neutral 100 mark. This configuration—slightly lower index reading yet elevated level—suggests that while the incremental surprise versus prior Fed communication is limited, the policy backdrop remains clearly restrictive, consistent with Musalem’s call for further firming and the steady tone captured by the FXS Speechtracker.
Technical Analysis: Bearish outlook of GBP/USD remains intact below the 100-day SMA
In the daily chart, GBP/USD keeps a bearish near-term tone as spot holds beneath the 20-day simple moving average (SMA) from the Bollinger Bands and well below the 100-day SMA. Price is also capped by the upper Bollinger band, while the Relative Strength Index (14) at 39 leans toward modestly bearish momentum without reaching oversold territory, suggesting sellers remain in control but lack extreme conviction.
On the topside, initial resistance emerges at the Bollinger middle band SMA near 1.3295, ahead of the 100-day SMA at 1.3402 and the upper Bollinger band at 1.3470. On the downside, the lower Bollinger band at 1.3115 offers the next key support area, and a decisive break beneath this floor would open the way to a deeper retreat in the pair.
(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.
Japanese Finance Minister (FM) Satsuki Katayama said on Friday that the country's doge initiative is key for the Sanae Takaichi administration to pursue budget promoting growth while maintaining fiscal sustainability, Reuters reported.
The government stated that it would reboot its spending review, widening scrutiny of tens of billions of dollars in public funds and subsidies as it seeks funding sources for Takaichi's costly policy pledges.
Japan’s renewed effort under its DOGE initiative, modelled on the US Department of Government Efficiency, came after an earlier review of special tax measures produced only three proposals to eliminate tax breaks out of approximately 120 examined by government ministries.
Market reaction
At the time of writing, USD/JPY is up 0.02% on the day at 157.92.
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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