Forex News
- USD/JPY attracts some sellers during the Asian session as hot Tokyo CPI lifts the JPY.
- Intervention risks further underpin the JPY, though a bullish USD supports the major.
- Traders also seem hesitant and opt to wait for the release of the key US NFP report.
The USD/JPY pair edges lower during the Asian session on Friday, currently trading below the 158.00 mark, though it remains near the weekly high touched the previous day.
Data released earlier today showed that consumer inflation in Tokyo – Japan's capital city – accelerated in September. This comes on top of the Bank of Japan's (BoJ) Summary of Opinions, which showed that policymakers debated the need for additional rate hikes to adjust accommodative financial conditions, and offers some support to the Japanese Yen (JPY). Adding to this, traders remain on high alert amid speculation that authorities will step in again to boost the JPY, which, in turn, is weighing on the USD/JPY pair.
The downside, however, seems cushioned amid the prevailing strong bullish sentiment surrounding the US Dollar (USD). Despite receding bets for an October Federal Reserve (Fed) rate hike, inflationary concerns stemming from volatile energy prices help limit the overnight pullback in US bond yields from multi-year highs. This, along with persistent geopolitical uncertainties, keeps the safe-haven USD well supported near its highest level since March 2025 and might continue to act as a tailwind for the USD/JPY pair.
Traders might also refrain from placing aggressive directional bets and opt to wait for the release of the crucial US monthly employment details, due later during the North American session. The popularly known Nonfarm Payrolls (NFP) report will play a key role in influencing market expectations about the Fed's future policy path, which, in turn, will drive the USD and provide some meaningful impetus to the USD/JPY. Nevertheless, spot prices remain on track to register modest gains for the third consecutive week.
USD/JPY 4-hour chart
Technical Analysis
The USD/JPY pair holds well above the 100-period Simple Moving Average (SMA) on the 4-hour chart, suggesting a constructive near-term bias as buyers maintain control over the broader uptrend. The said SMA at 156.52 should act as immediate strong support, where a break lower would start to weaken the bullish structure and expose deeper retracements. On the top side, bulls might now await acceptance above the 159.00 mark before positioning for an extension of a three-week-old uptrend.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Bank of Japan FAQs
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
- The British Pound is up at around 1.3208 against the US Dollar ahead of the US NFP data for September.
- Surging US Treasury Yields have strengthened the US Dollar.
- BoE’s Mann criticizes the central bank for not taking an early action against Iran war outbreak.
The British Pound (GBP) trades 0.1% higher at around 1.3208 against the US Dollar (USD) during the Asian trading session on Friday. The GBP/USD pair as the US Dollar Index trades slightly lower to near 101.93 after posting a fresh over-a-year high at 102.20 on Thursday.
The US Dollar is expected to trade cautiously as investors await the United States (US) Nonfarm Payrolls (NFP) data for September, which will be published at 12:30 GMT.
Analysts at OCBC flag “this week's US labour market report” as the key event risk for the Dollar, noting that Bloomberg consensus expects “nonfarm payrolls to rise by 90,000 in September, down from 162,000 in August, while the unemployment rate is forecast to remain unchanged at 4.1%.” They acknowledge that Federal Reserve (Fed) Chair Kevin Warsh has highlighted “the four-week average of initial jobless claims as a timely indicator of labour market conditions,” but stress that “payrolls remain the market's preferred measure of labour market health.”
OCBC points out that “recent claims data have continued to trend lower, suggesting labour market conditions remain firm,” and therefore “the risk of an upside payrolls surprise appears to be increasing.” In their view, “a stronger-than-expected employment report would likely reinforce expectations of further Fed tightening, keep Treasury yields elevated and provide additional support for the USD.”
The rally in the US Dollar Index is driven by surging United States (US) Treasury Yields, as elevated energy prices have boosted hawkish Fed expectations.
On the GBP front, Bank of England (BoE) member Catherine Mann, an outspoken hawk, has admitted that the central bank has made errors in assessing the consequences of energy supply shock, Reuters report. Her comments in a speech at the Nomura London Macro Forum on Thursday signaled that the central bank should has taken necessary action right at the Iran war outbreak to control inflation.
GBP/USD Technical Analysis
In the daily chart, GBP/USD trades at 1.3208, maintaining a bearish near-term bias as spot holds below the 20-period exponential moving average (EMA) at 1.3333. The pair continues to retreat away from that dynamic cap, and the Relative Strength Index (RSI) at 31.3 hovers just above oversold territory, hinting that while downside pressure persists, sellers may begin to slow rather than accelerate aggressively from current levels.
On the topside, immediate resistance is located at the 20-period EMA at 1.3333, which acts as the first hurdle for any corrective bounce and reinforces the broader bearish structure while price trades beneath it. Looking down, the Year-Till-Date (YTD) low at 1.3140 is the major support level.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Nonfarm Payrolls FAQs
Nonfarm Payrolls (NFP) are part of the US Bureau of Labor Statistics monthly jobs report. The Nonfarm Payrolls component specifically measures the change in the number of people employed in the US during the previous month, excluding the farming industry.
The Nonfarm Payrolls figure can influence the decisions of the Federal Reserve by providing a measure of how successfully the Fed is meeting its mandate of fostering full employment and 2% inflation. A relatively high NFP figure means more people are in employment, earning more money and therefore probably spending more. A relatively low Nonfarm Payrolls’ result, on the either hand, could mean people are struggling to find work. The Fed will typically raise interest rates to combat high inflation triggered by low unemployment, and lower them to stimulate a stagnant labor market.
Nonfarm Payrolls generally have a positive correlation with the US Dollar. This means when payrolls’ figures come out higher-than-expected the USD tends to rally and vice versa when they are lower. NFPs influence the US Dollar by virtue of their impact on inflation, monetary policy expectations and interest rates. A higher NFP usually means the Federal Reserve will be more tight in its monetary policy, supporting the USD.
Nonfarm Payrolls are generally negatively-correlated with the price of Gold. This means a higher-than-expected payrolls’ figure will have a depressing effect on the Gold price and vice versa. Higher NFP generally has a positive effect on the value of the USD, and like most major commodities Gold is priced in US Dollars. If the USD gains in value, therefore, it requires less Dollars to buy an ounce of Gold. Also, higher interest rates (typically helped higher NFPs) also lessen the attractiveness of Gold as an investment compared to staying in cash, where the money will at least earn interest.
Nonfarm Payrolls is only one component within a bigger jobs report and it can be overshadowed by the other components. At times, when NFP come out higher-than-forecast, but the Average Weekly Earnings is lower than expected, the market has ignored the potentially inflationary effect of the headline result and interpreted the fall in earnings as deflationary. The Participation Rate and the Average Weekly Hours components can also influence the market reaction, but only in seldom events like the “Great Resignation” or the Global Financial Crisis.
- Gold remains confined in a range as traders opt to wait for the release of the US NFP report.
- The USD stands firm near a one-and-a-half-year top, acting as a headwind for the commodity.
- Oil-driven inflation fears keep US bond yields near multi-year highs, further capping the bullion.
Gold (XAU/USD) attracts some sellers during the Asian session on Friday, though the downside remains limited as traders opt to wait for the crucial US employment details before placing fresh directional bets. The popularly known US Nonfarm Payrolls (NFP) report is expected to show that the economy added only 90K jobs in September, compared to the previous month's reading of 162K. Meanwhile, the Unemployment Rate is seen holding steady at 4.1%. Furthermore, the annual wage inflation, as measured by the change in the Average Hourly Earnings, will be looked upon for more cues about the Federal Reserve's (Fed) future policy path amid receding October rate hike bets. This, in turn, will drive the US Dollar (USD) and provide some meaningful impetus to the non-yielding bullion.
A slew of influential FOMC members recently indicated that they do not see an urgent need for an immediate interest rate hike after the widely expected quarter-point increase at the September meeting. Meanwhile, the Institute for Supply Management (ISM) reported on Thursday that economic activity in the US manufacturing sector expanded for the ninth straight month in September. Additional details of the survey revealed that raw material prices increased for a 24th consecutive month. This comes on top of inflationary concerns stemming from volatile energy prices, which underpin prospects for additional Fed tightening and help limit the overnight pullback in US bond yields from multi-year highs. Apart from this, the US-Iran standoff keeps the USD firm near its highest level since April 2025.
The Wall Street Journal reported that the Pentagon may soon send a third aircraft carrier strike group and 10,000 sailors and Marines to the Persian Gulf. Separately, Iran’s Persian Gulf Strait Authority (PGSA) said several tankers were attacked in the Strait of Hormuz in recent days. Adding to this, US President Donald Trump said on Wednesday that he would decide very soon whether to blow up Iran and added that the war will end very soon one way or the other. This keeps the geopolitical risk premium firmly in play and remains supportive of the strong bid tone surrounding the safe-haven Greenback, which might continue to act as a headwind for the Gold. That said, the lack of follow-through selling warrants some caution for XAU/USD bears before positioning for any meaningful depreciation.
XAU/USD 4-hour chart
Technical Analysis
The XAU/USD pair keeps a bearish near-term tone below the 200-period Simple Moving Average (SMA) on the 4-hour chart and the mid-range Fibonacci retracements. However, the Moving Average Convergence Divergence (MACD) indicator remains in positive territory with the line above its signal and a still-constructive histogram. Meanwhile, the Relative Strength Index (RSI) around 43 hints at a potential pause in the downside rather than a clear bullish reversal.
Hence, any positive move beyond the $4,200 mark is more likely to confront immediate resistance near the 61.8% retracement at $4,230. The 50% level at $4,319 forms the next nearby topside barrier ahead of the 200-period SMA at $4,386 and the 38.2% retracement at $4,408. This reinforces a dense supply zone, with the 23.6% retracement at $4,519 marking a more distant cap that would need to be reclaimed to meaningfully challenge the current bearish bias. On the downside, initial support is seen at the 78.6% Fibo. retracement at $4,103, ahead of the prior swing low near $3,942.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Nonfarm Payrolls FAQs
Nonfarm Payrolls (NFP) are part of the US Bureau of Labor Statistics monthly jobs report. The Nonfarm Payrolls component specifically measures the change in the number of people employed in the US during the previous month, excluding the farming industry.
The Nonfarm Payrolls figure can influence the decisions of the Federal Reserve by providing a measure of how successfully the Fed is meeting its mandate of fostering full employment and 2% inflation. A relatively high NFP figure means more people are in employment, earning more money and therefore probably spending more. A relatively low Nonfarm Payrolls’ result, on the either hand, could mean people are struggling to find work. The Fed will typically raise interest rates to combat high inflation triggered by low unemployment, and lower them to stimulate a stagnant labor market.
Nonfarm Payrolls generally have a positive correlation with the US Dollar. This means when payrolls’ figures come out higher-than-expected the USD tends to rally and vice versa when they are lower. NFPs influence the US Dollar by virtue of their impact on inflation, monetary policy expectations and interest rates. A higher NFP usually means the Federal Reserve will be more tight in its monetary policy, supporting the USD.
Nonfarm Payrolls are generally negatively-correlated with the price of Gold. This means a higher-than-expected payrolls’ figure will have a depressing effect on the Gold price and vice versa. Higher NFP generally has a positive effect on the value of the USD, and like most major commodities Gold is priced in US Dollars. If the USD gains in value, therefore, it requires less Dollars to buy an ounce of Gold. Also, higher interest rates (typically helped higher NFPs) also lessen the attractiveness of Gold as an investment compared to staying in cash, where the money will at least earn interest.
Nonfarm Payrolls is only one component within a bigger jobs report and it can be overshadowed by the other components. At times, when NFP come out higher-than-forecast, but the Average Weekly Earnings is lower than expected, the market has ignored the potentially inflationary effect of the headline result and interpreted the fall in earnings as deflationary. The Participation Rate and the Average Weekly Hours components can also influence the market reaction, but only in seldom events like the “Great Resignation” or the Global Financial Crisis.
- Euro trades broadly under pressure near 177.60 against the Japanese Yen.
- Hotter-than-projected Tokyo CPI data for September might prompt hawkish BoJ bets.
- Soaring France bond yields will likely keep the Euro under pressure.
The Euro (EUR) trades flat against the Japanese Yen (JPY) at around 177.60 during the Asian trading session on Friday, but the pair is close to its fresh over 10-month low of 176.66 posted the previous day.
The Japanese currency broadly outperforms on Friday as Tokyo Consumer Price Index (CPI) data for September remains stronger-than-expected, reinforcing expectations of more interest rate hikes by the Bank of Japan (BoJ) in the near term.
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.04% | -0.06% | -0.08% | -0.03% | -0.01% | -0.06% | -0.09% | |
| EUR | 0.04% | -0.03% | -0.04% | 0.02% | 0.06% | -0.01% | -0.05% | |
| GBP | 0.06% | 0.03% | -0.02% | 0.02% | 0.07% | 0.00% | -0.03% | |
| JPY | 0.08% | 0.04% | 0.02% | 0.06% | 0.07% | 0.02% | -0.01% | |
| CAD | 0.03% | -0.02% | -0.02% | -0.06% | 0.01% | -0.05% | -0.07% | |
| AUD | 0.00% | -0.06% | -0.07% | -0.07% | -0.01% | -0.06% | -0.08% | |
| NZD | 0.06% | 0.00% | -0.01% | -0.02% | 0.05% | 0.06% | -0.02% | |
| CHF | 0.09% | 0.05% | 0.03% | 0.01% | 0.07% | 0.08% | 0.02% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
Tokyo CPI ex. Fresh Food arrives at 2.7% Year-on-Year (YoY), higher than 2.4% estimates and the previous reading of 1.8%. The headline inflation accelerates to 2.7% from 1.9% in August.
The BoJ Summary of Opinions of the September policy meeting on Thursday showed that several policymakers argued in favor of tightening monetary conditions further, adding that “focus must be on anchoring underlying inflation near 2%”.
Meanwhile, the Euro is expected to trade cautiously as surging government bond yields in France due to accelerating public debt could prompt fiscal concerns. According to a report from Associated Press (AP), the public debt in France now stands at 119% of Gross Domestic Product (GDP), which has pushed 10-year France bond yields to 4.96%. This is the highest level seen since August 2002.
In response, France’s Finance Minister Roland Lescure has vowed to put public finances back on track for budget consolidation, aiming to reduce its budget deficit from a target of 5% of economic output next year to the European Union limit of 3% by 2029, Reuters report.
On the economic data front, investors await the Eurozone preliminary Harmonized Index of Consumer Prices (HICP) data for September, which will be published at 09:00 GMT.
Economic Indicator
Tokyo CPI ex Fresh Food (YoY)
The Tokyo Consumer Price Index (CPI), released by the Statistics Bureau of Japan on a monthly basis, measures the price fluctuation of goods and services purchased by households in the Tokyo region excluding fresh food, whose prices often fluctuate depending on the weather. The index is widely considered as a leading indicator of Japan’s overall CPI as it is published weeks before the nationwide reading. The YoY reading compares prices in the reference month to the same month a year earlier. Generally, a high reading is seen as bullish for the Japanese Yen (JPY), while a low reading is seen as bearish.
Read more.Last release: Thu Oct 01, 2026 23:30
Frequency: Monthly
Actual: 2.7%
Consensus: 2.4%
Previous: 1.8%
Source: Statistics Bureau of Japan
- AUD/USD holds losses as the US Dollar gains on persistent energy-driven US inflation concerns.
- Traders await US September jobs data, with Nonfarm Payrolls projected to slow to 90,000 additions.
- CBA expects RBA rate hikes have paused, but November’s meeting remains live depending on upcoming inflation data.
AUD/USD remains subdued for the fifth consecutive day, trading around 0.6930 during the Asian hours on Friday. The pair loses ground as the US Dollar (USD) receives strong support from persistent inflation concerns stemming from elevated energy costs, alongside market expectations of higher US interest rates.
Ahead of Friday’s release of the US September employment data, traders are paying close attention for signals regarding the future direction of Federal Reserve monetary policy. Economists project Nonfarm Payrolls to show an addition of 90,000 jobs, marking a slowdown from the 162,000 recorded in the previous month, while the Unemployment Rate is expected to remain unchanged at 4.1%.
Meanwhile, Matt Comyn, chief executive of Australia's largest bank, Commonwealth Bank (CBA), noted that while CBA believes the Reserve Bank of Australia has finished hiking interest rates for now, the board's November meeting remains "live" with another rise still a possibility. Speaking with the ABC's Alan Kohler, he emphasized that the RBA's next move will heavily depend on the quarterly inflation data scheduled for release at the end of the month.
RBA seen staying patient as Commerzbank flags still-elevated inflation
Commerzbank’s Volkmar Baur acknowledges that “there’s no question that inflation is still too high, and it will take a while before it returns to the middle of the target range,” but argues that the Reserve Bank of Australia is unlikely to respond with further rapid tightening. Pointing to the lagged impact of previous rate hikes and emerging weakness in the real estate sector, he suggests the RBA will prefer to wait and assess the effects of policy already in place, leaving the Australian Dollar without significant additional support from near-term rate increases.
Technical Analysis:
In the daily chart, AUD/USD trades at 0.6930, extending its decline below both the nine- and 50-period Exponential Moving Averages (EMAs), which together hint at a bearish near-term bias with the pair capped by clustered dynamic resistance overhead. The 14-day Relative Strength Index (14) has slid into oversold territory near 25, suggesting selling pressure is stretched but, as long as price holds under these moving averages, rebounds are likely to be corrective rather than trend-changing.
On the topside, immediate resistance emerges at the nine-period EMA around 0.6993, followed by a more significant barrier at the 50-period EMA near 0.7073, where sellers would be expected to reassert control if tested. On the downside, the current price around 0.6927 acts as a short-term pivot, while a more meaningful structural support sits at the horizontal level of 0.6667, where a deeper extension of the downtrend could look for a base if the present slide continues.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
- EUR/USD softens to near 1.1235 in Friday’ Asian session.
- Concerns about the French fiscal trajectory weigh on the Euro.
- Fed's Logan called for '50 bps or more' in rate hikes.
- US September employment data will be in the spotlight on Friday.
The EUR/USD pair declines to around 1.1235 during the Asian trading hours on Friday. The Euro (EUR) extends its downside on French fiscal concerns. The US jobs report for September will take center stage later on Friday.
French 10-year government bond yields retreat after reaching their highest level since 2002 in the previous session. This action came after the French government unveiled its 2027 budget amid deepening concern surrounding France’s fiscal outlook. Additionally, a renewed rise in oil prices on a prolonged US-Iran war is driving yields higher as elevated inflation.
"Clearly the market is not pricing for a hawkish Fed," said Prashant Newnaha, senior rates strategist at TD Securities. "This is a flight-to-safety move spurred on by developments in Europe. In this scenario expect the dollar index and the yen to strengthen at the same time,” Newnaha added.
Hawkish signals from the Federal Reserve (Fed) officials and an extended rise in US Treasury yields underpin the Greenback. Dallas Fed President Lorie Logan said on Thursday that the central bank will need to raise short-term borrowing costs by at least 50 basis points (bps) to turn monetary policy "modestly restrictive" and get inflation back on track to the Fed’s 2% target.
Markets are now pricing in nearly a 24.9% probability of a Fed rate hike in October and a 79.4% odds of an increase in December, according to the CME FedWatch Tool.
Traders await the US September employment data on Friday for more clues about the US interest rate outlook. The US Nonfarm Payrolls (NFP) is projected to show an increase of 90,000 job additions in September, while the Unemployment Rate is projected to stay unchanged at 4.1% during the same period. Any signs of weakening in the US labor market could drag the Greenback lower and act as a tailwind for the major pair.
Euro struggles to capitalise on ECB hawkishness as US Dollar resilience persists
Analysts at Rabobank argue that the “turnaround from expectations of Fed easing to Fed tightening can account for much of the USD’s strong performance during the summer and into last month.” They add that the “lacklustre performance of the EUR has also played a part in driving EUR/USD in the months since the war commenced,” noting that, just as the earlier “attraction of the single currency likely underpinned flows out of the USD during parts of 2025,” the Euro’s “inability to draw strength from the hawkish position of the ECB since the start of the Iran war has likely helped underpin the USD.”
According to Rabobank, this disconnect reflects mounting concerns on the European side. They point out that “even though the ECB brought forward its tightening cycle, and despite the resilience of the Eurozone economy this year, the market is concerned about growth risks in view of the Eurozone’s position as an energy importer.” In their view, “European political uncertainties are also likely contributing to the EUR’s lacklustre performance,” compounding the currency’s struggle to benefit from monetary policy support.
Logan’s hawkish tilt lifts Fed expectations and supports the Dollar
Fed’s Logan delivered a notably more hawkish message, with a FXS Speechtracker score of 9.2 versus a historical average of 8.1, underscoring a stronger tightening bias relative to the established baseline. The emphasis that higher long-term yields may partly reflect rising term premiums, thereby reducing the need for additional tightening, sits in tension with explicit calls for at least 50 bps more in rate hikes and several further moves to revive price stability, reinforcing a clear hawkish tone for the Dollar. Logan’s characterization of policy as not yet restrictive, alongside a strengthening economic expansion and balanced labor market, signals scope for further rate increases despite ongoing uncertainty about the terminal rate needed to secure 2% inflation.
The FXS Fed Sentiment Index rose by 1.68 points to 136.59, confirming a deeper move into hawkish territory well above the neutral 100 threshold. This upward shift in the FXS Fed Sentiment Index, aligned with the elevated FXS Speechtracker score, points to rising market expectations for additional Fed tightening, a supportive backdrop for the Dollar against major peers.
Technical Analysis: EUR/USD keeps a bearish vibe amid oversold conditions
In the daily chart, EUR/USD extends its slide well below the Bollinger Bands (20, 2) middle band and the 100-day simple moving average (SMA), which together suggest a firmly bearish near-term structure with the pair capped by layered overhead resistance. The price is now closer to the Bollinger lower band, while the Relative Strength Index (14) at 17.21 sits deep in oversold territory, hinting that downside momentum remains strong even as the risk of a corrective bounce increases.
On the topside, initial resistance emerges at the Bollinger middle band near 1.1460, followed by the 100-day SMA around 1.1515, with a more distant barrier at the Bollinger upper band near 1.1705, where stronger selling interest would be expected if recovery attempts gain traction. On the downside, immediate support is aligned with the Bollinger lower band at 1.1215; a sustained break beneath this floor would open the way for a continuation of the bearish trend, while holding above it could allow EUR/USD to consolidate before attempting to retest the nearby resistance band.
(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.
Japanese Finance Minister (FM) Satsuki Katayama said on Friday that she will beef up efforts to promote the Japanese version of the doge review of subsidies and funds, adding that there are about 200 existing funds, worth about 7 trillion yen.
Meanwhile, Economy Minister Minoru Kiuchi stated that he hopes the Bank of Japan (BoJ) continues to communicate closely with the government in guiding policy. He added that Japan no longer needs extraordinary monetary stimulus, as seen in Boj's decision to end yield curve control. Kiuchi declined to comment on monetary policy, which falls under the jurisdiction of the BoJ.
Key quotes from Japan Katayama
Will beef up efforts to promote Japanese version of doge review of subsidies and funds.
Will drastically streamline idled funds in the budget process.
There are about 200 existing funds, worth about 7 trillion yen.
Market reaction
At the time of writing, the USD/JPY pair is down 0.11% on the day at 157.90.
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.
- Silver falls as elevated oil prices due to US-Iran conflict fears reignite inflation concerns.
- A strong dollar, rising Treasury yields, and hawkish Fed comments put additional selling pressure on Silver.
- Traders await US September Nonfarm Payrolls data for signals on future Fed rate decisions.
Silver price (XAG/USD) loses ground after registering gains the previous day, trading around $60.30 per troy ounce during Asian hours on Friday. Silver price retreats as rising crude oil costs, driven by fears of a deteriorating conflict between the US and Iran, reignite broader inflation concerns.
Meanwhile, the non-yielding white metal faces additional selling pressure from a strengthening US Dollar (USD) and climbing Treasury yields, as investors recalibrate their expectations following recent hawkish remarks from Federal Reserve (Fed) officials.
Logan’s hawkish tilt boosts Dollar as higher yields seen reducing need for aggressive tightening
Fed’s Logan delivered a notably more hawkish message, with a FXS Speechtracker score of 9.2/10 compared to the established baseline of 8.1/10, underscoring a stronger conviction that policy rates must rise further. The key remark that “higher yields may also indicate increased term premiums, lowering need to tighten monetary policy” sits alongside calls for at least 50 bps more in rate hikes and several additional moves, suggesting that while bond market dynamics may do some of the tightening, the Fed stance is still not viewed as sufficiently restrictive. Logan’s emphasis on a strengthening economic expansion, a well-balanced labor market, and the need to revive price stability reinforces a hawkish tone supportive of the Dollar.
The FXS Fed Sentiment Index rose by 1.68 points to 136.59, signaling a clear move deeper into hawkish territory well above the neutral 100 threshold. This upward shift in the FXS Fed Sentiment Index, aligned with the elevated FXS Speechtracker score, confirms that Logan’s remarks are perceived as materially increasing expectations for further policy tightening and sustained support for the Dollar.
Fed’s Cook flags AI as inflation risk, keeping Dollar bulls alert
Fed’s Cook’s speech scores 7/10 on the FXS Speechtracker, only marginally above the 6.9/10 historical average, signaling a tone that is slightly more consequential but broadly consistent with the established baseline. The emphasis on AI as a top risk for 2027, already generating “pockets of inflation” and potentially triggering sector-specific supply shocks, tilts the message toward vigilance on inflation expectations and consumer confidence rather than comfort with the current disinflation trend. Cook’s focus on AI-driven productivity gains as a possible source of future inflation and the need to keep inflation expectations anchored reinforces a cautious, mildly hawkish bias for the Dollar.
Crude prices could further appreciate as geopolitical tensions flare up again. Reports suggest attacks on at least three tankers in the Strait of Hormuz and repeated strikes on regional refineries by Iran and its Houthi allies. The US is considering the deployment of another aircraft carrier to the Middle East, escalating the risk of broader conflict with Iran and threatening further disruption to energy supplies.
Additionally, the Pentagon is evaluating the deployment of 10,000 sailors and Marines to the Persian Gulf, giving President Donald Trump expanded operational flexibility should he choose to intensify military action against Iran, strikes he has reportedly signaled could resume after the November midterm elections.
Traders await Friday’s release of the US September employment data for signals regarding the future direction of Federal Reserve (Fed) monetary policy. Economists project Nonfarm Payrolls to show an addition of 90,000 jobs, marking a slowdown from the 162,000 recorded in the previous month, while the Unemployment Rate is expected to remain unchanged at 4.1%.
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.
- DXY retains a bullish tone for the fifth straight day despite receding October Fed hike bets.
- Oil-driven inflation fears limit corrective pullback in US bond yields and support the USD.
- Geopolitical risks further underpin the buck as traders now look to the key US NFP report.
The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, attracts buyers for the fifth straight day and climbs back above the 102.00 mark during the Asian session on Friday. The Index remains close to its highest level since April 2025, touched the previous day, and seems poised to register strong gains for the third week in a row as traders now look to the closely watched US monthly employment details.
The popularly known US Nonfarm Payrolls (NFP) report is expected to show that the economy added only 90K jobs in September, which would mark a notable slowdown compared to the previous month's reading of 162K. Meanwhile, the Unemployment Rate is seen holding steady at 4.1%. Furthermore, the annual wage inflation, as measured by the change in the Average Hourly Earnings, will be looked upon for more cues about the Federal Reserve's (Fed) future policy path amid receding October rate hike bets and will provide some meaningful impetus to the DXY.
Heading into the key data risk, the Institute of Supply Management (ISM) reported on Thursday that economic activity in the manufacturing sector expanded in September for the ninth consecutive month. Additional details of the survey revealed that raw-material prices increased for a 24th consecutive month. This comes on top of oil-driven inflation risks, which limit the overnight pullback in US bond yields from multi-year highs. Apart from this, uncertainties stemming from the US-Iran standoff continue to act as a tailwind for the safe-haven USD and favor bulls.
In the latest developments surrounding the Middle East crisis, the Wall Street Journal reported that the Pentagon may soon send a third aircraft-carrier strike group and 10,000 sailors and Marines to the Persian Gulf. This comes after US President Donald Trump said increased military strikes against Iran were “possible” after the November midterm elections. Separately, Iran’s Persian Gulf Strait Authority (PGSA) said several tankers were attacked in the Strait of Hormuz in recent days. This keeps geopolitical risks premium in play and validates the positive outlook for the DXY.
DXY daily chart
Technical Analysis
The DXY holds well above the 200-day Simple Moving Average (SMA) and the overnight breakout through the 101.70-101.70 horizontal barrier reinforces a constructive near-term bias. The said resistance breakpoint now seems to protect the immediate downside and limit any corrective pullback. On the top side, bulls might now look to test the next relevant hurdle near the 102.65-102.70 area before aiming to conquer the 103.00 mark.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 1.28% | 0.37% | 0.49% | 0.64% | 1.38% | 1.22% | 0.46% | |
| EUR | -1.28% | -0.96% | -0.73% | -0.65% | 0.09% | -0.07% | -0.81% | |
| GBP | -0.37% | 0.96% | 0.02% | 0.29% | 1.02% | 0.86% | 0.11% | |
| JPY | -0.49% | 0.73% | -0.02% | 0.06% | 0.82% | 0.64% | -0.12% | |
| CAD | -0.64% | 0.65% | -0.29% | -0.06% | 0.77% | 0.55% | -0.16% | |
| AUD | -1.38% | -0.09% | -1.02% | -0.82% | -0.77% | -0.17% | -0.91% | |
| NZD | -1.22% | 0.07% | -0.86% | -0.64% | -0.55% | 0.17% | -0.74% | |
| CHF | -0.46% | 0.81% | -0.11% | 0.12% | 0.16% | 0.91% | 0.74% |
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).
- CAD weakens as falling crude oil prices pressure the commodity-linked currency.
- Steady US inflation concerns and expected interest rate hikes continue supporting the US Dollar.
- Traders await US September Nonfarm Payrolls data for signals on future Fed rate decisions.
USD/CAD rebounds after registering losses in the previous day, trading around 1.4230 during the Asian hours on Friday. The currency pair continues to gain ground as the US Dollar (USD) receives strong support. This momentum is driven by persistent inflation concerns stemming from elevated energy costs, alongside market expectations of higher US interest rates.
Ahead of Friday’s release of the US September employment data, traders are paying close attention for signals regarding the future direction of Federal Reserve (Fed) monetary policy. Economists project Nonfarm Payrolls to show an addition of 90,000 jobs, marking a slowdown from the 162,000 recorded in the previous month, while the Unemployment Rate is expected to remain unchanged at 4.1%.
Meanwhile, the USD/CAD pair’s upward momentum is being reinforced by weakness in the commodity-linked Canadian Dollar, which is coming under pressure due to falling crude oil prices. Oil prices recently pulled back as regional supply flows from the Middle East largely recovered to prewar levels.
However, market participants remain skeptical that this supply recovery can be sustained without a formal agreement to end the conflict, especially following attacks on at least three tankers in the Strait of Hormuz and repeated strikes on regional refineries by Iran and its Houthi allies.
Looking ahead, crude prices could quickly rebound as geopolitical tensions flare up again. The US is considering the deployment of another aircraft carrier to the Middle East, escalating the risk of broader conflict with Iran and threatening further disruption to energy supplies. Additionally, the Pentagon is evaluating the deployment of 10,000 sailors and Marines to the Persian Gulf, giving President Donald Trump expanded operational flexibility should he choose to intensify military action against Iran, strikes he has reportedly signaled could resume after the November midterm elections.
BoC seen in no rush to hike despite flat Canada growth
According to TD Securities, the latest data showing "flat growth in July" reinforces the view that there is "no compelling reason for the BoC to rush into rate hikes in October." The firm argues that, while activity has stalled on a month-on-month basis, the current backdrop does not warrant an accelerated tightening timetable, and instead supports a more measured approach to future policy moves.
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.
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