Forex News

Here is what you need to know on Friday, September 11:

The US Dollar Index (DXY) reclaimed the 99.00 barrier and then some, rebounding firmly as the hot Producer Price Index (PPI) rose 5.4% over the year to August, hardening expectations for a Fed rate hike at next week's meeting.

Attention now shifts squarely to the August Consumer Price Index (CPI), with markets looking for the headline rate to hold around 3.4%, seconded by the preliminary Michigan Consumer Sentiment and inflation expectations gauges.

EUR/USD slipped and settled around the 1.1600 neighborhood, unable to hold higher ground even as the European Central Bank (ECB) delivered a widely expected 25-basis-point rate hike, lifting its deposit rate to 2.50%.

President Christine Lagarde called the move a "no-brainer," and markets added to bets on further tightening, but broad US Dollar strength kept the pair on the back foot. Speeches by Lagarde and ECB chief Philip Lane are due on Friday.

GBP/USD lost some shine and retreated toward the 1.3500 region on the back of the reinvigorated Greenback. Across the Channel, Friday brings a busy docket: monthly Gross Domestic Product, Industrial Production and Manufacturing Production, all for July, along with Consumer Inflation Expectations.

USD/JPY bounced off its seven-month lows and reclaimed the 154.00 zone, helped by the firmer Dollar even as hawkish Bank of Japan (BoJ) repricing continues to underpin the Yen. Japan has no first-tier releases due on Friday.

AUD/USD came under marked pressure and slid toward the mid-0.7100s, surrendering the bulk of the rally that had earlier carried it to four-month highs near 0.7240. Monday's report of a $54 billion Chinese stimulus package and Tuesday's hawkish Reserve Bank of Australia (RBA) commentary powered that advance, but neither could shield the Aussie from the Dollar's comeback. No major data releases are due in Australia.

West Texas Intermediate (WTI) rocketed higher, surging past the $100 mark to trade near the $102.50 zone as the intensifying US-Iran-Hormuz crisis kept supply fears front and center.

Gold came under heavy selling pressure, sliding back toward the $4,320 area per troy ounce as the rebounding Dollar and a spike in US Treasury yields, both spurred by the hot PPI, sapped demand for the non-yielding metal. Silver fared even worse, tumbling sharply on the day.

• XAG/USD breaks neckline, but daily close must confirm pattern.
• Hot PPI boosts yields, Dollar and Fed hike expectations.
• Break below $60.00 exposes the head-and-shoulders target near $55.00.

Silver (XAG/USD) price erases Wednesday's gains and forms a bearish head-and-shoulders chart pattern on Thursday after the white metal tanks and breaks a support trendline around $64.00-$64.15, exacerbating the decline below $63.50. At the time of writing, XAG/USD trades at $63.72, down over 5.30%.

XAG/USD Price Forecast: Technical Outlook

Silver shifted gears on Thursday, following a hot US Producer Price Index (PPI) report, which is driving US bond yields higher, underpinning the US Dollar and increasing the chances of a rate hike by the Fed next week. Nevertheless, a softer CPI reading on Friday would leave the meeting 'live,' while higher prices would cement a hawkish case.

Technically speaking, XAG/USD tumbled over $3.60 and cleared the head-and-shoulders neckline. However, a daily close below the latter is required to confirm the bearish chart pattern. In that scenario, the next support levels would be $60.00, followed by the head-and-shoulders target near $55.00.

On the upside, the initial significant resistance for XAG/USD is at $70.00. A strong push could send spot prices up to the 200-day SMA at $73.00, paving the way for buyers to target $75.00.

XAG/USD Price Chart – Daily

UOB’s Quek Ser Leang and Lee Sue Ann keep a negative stance on USD/CNH around 6.7060, though recent price action has been confined to 6.7033–6.7074. They see current moves as range trading between 6.7030 and 6.7100 intraday. Over 1–3 weeks, they highlight that a break and hold below 6.7000 could open further downside toward 6.6900, while resistance is capped at 6.7160.

USD/CNH downside bias points toward 6.6900

"24-HOUR VIEW: We highlighted yesterday that “the bias for USD is on the downside,” but we stated that “any decline is likely part of a lower range of 6.7020/6.7100.” USD then traded within a range of 6.7033/6.7074 and closed unchanged at 6.7067. The price movements are likely part of a range-trading phase. Today, USD could trade between 6.7030 and 6.7100."

"1-3 WEEKS VIEW: We have been holding a negative USD stance since the start of the month. In our most recent narrative from Monday (07 Sep, spot at 6.7070), we noted that “downward momentum has increased further, and if USD breaks and holds below 6.7000, it could decline further to 6.6900.” Although USD has not been able to make much headway on the downside, we will continue to hold the same view as long as 6.7160 (‘strong resistance’ previously at 6.7200) is not breached."

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

• NZD/USD hits near two-month low after rejecting SMA confluence.
• Bearish RSI signals sellers control the short-term technical bias.
• Break below 0.5800 exposes 0.5761, 0.5750 and 0.5658.

The New Zealand Dollar (NZD) fails to clear a confluence of key Simple Moving Averages (SMAs) and dives below 0.5800 on Thursday, printing a near two-month low of 0.5797. At the time of writing, NZD/USD is down 0.65% and poised to test lower levels if it closes below 0.5800.

NZD/USD Price Forecast: Technical Outlook

From a technical perspective, the NZD/USD pair shifted to a downward bias. After clearing the confluence of the 100-, 50- and 200-day Simple Moving Averages (SMAs) at 0.5854, 0.5850 and 0.5842, it opened the door to breach the 0.5800 mark.

Also, overall US Dollar strength, driven by money markets expecting a rate hike by the Federal Reserve (Fed), shifted momentum in favor of the Greenback. The Relative Strength Index (RSI) turned bearish, an indication that further downside is expected.

If NZD/USD dives below 0.5800, the next support would be the July 29 low of 0.5761. Below is the 0.5750 psychological level, before printing a leg down to the July 3 high, which turned support at 0.5658.

Should buyers move in and push NZD/USD above 0.5855, it will expose 0.5900. On further strength, the next key resistance levels are the 0.6000 figure, followed by the February 18 swing high of 0.6054.

NZD/USD Price Chart – Daily

Commerzbank notes USD/MYR has risen to 4.07, marking a fourth consecutive session of Ringgit weakness, weighed by foreign portfolio outflows from Malaysian equities. However, they stress that resilient manufacturing, firm domestic demand and Bank Negara Malaysia’s slightly more hawkish tone should cap further MYR losses, as policymakers look through mining-led industrial softness and focus on persistent inflation pressures.

Ringgit pressured by outflows, policy support

"July industrial production surprised to the downside, rising 4.7% yoy (Bloomberg consensus: 5.6%) vs 6.5% in June, marking the weakest growth since March."

"The slowdown was concentrated in mining, while manufacturing and electricity production remained resilient. As such, the underlying industrial growth momentum remains relatively firm, supported by robust AI-related demand for electronic products and firmer domestic demand."

"On monetary policy, Bank Negara Malaysia (BNM) is likely to look through the weaker headline industrial production data, as the downside surprise was concentrated in mining and reflects structural declines in mature oil fields rather than a broad-based slowdown."

"In FX, USD/MYR rose 0.2% to 4.07 yesterday, gaining for the fourth consecutive session. Foreign portfolio outflows have weighed on the MYR, with foreign investors net selling USD120mn of equities since the start of September. Nonetheless, BNM’s slightly more hawkish tone and a resilient growth outlook should help limit further MYR weakness in the near-term."

"Overall resilience in manufacturing and domestic demand should keep the growth outlook relatively firm, while persistent inflationary pressures should reinforce BNM’s hawkish tilt."

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

• WTI climbs to its highest level since May as escalating Middle East tensions deepen supply concerns.
• EIA data show a modest decline in US crude inventories.
• OPEC cuts its 2026 demand growth forecast but raises its projection for next year.

West Texas Intermediate (WTI) Oil rallies nearly 5% on Thursday, climbing to its highest level since May 21 as escalating tensions in the Middle East raise fears of further disruption to already tight supplies. At the time of writing, WTI trades around $99 and is up about 10.50% so far this week.

The advance follows a fresh escalation between the United States (US) and Iran in recent days, increasing security risks around the Strait of Hormuz, where shipping remains heavily restricted following the outbreak of the war in late February. Adding to concerns, The Wall Street Journal reported on Thursday, citing US and Middle Eastern officials, that Iran has resumed producing ballistic missiles.

Iran’s Islamic Revolutionary Guard Corps (IRGC) also claimed that the Strait of Hormuz is blocked and under its “intelligent control and information dominance.” The group warned that any hostile presence in the strategic waterway would be targeted, according to Iranian state broadcaster IRIB.

Supply concerns have also spread beyond the Strait of Hormuz after Iran-aligned Houthis seized Yemen’s port of Mocha on Thursday, increasing risks around the Red Sea and the Bab el-Mandeb Strait. However, a Houthi spokesperson said current operations are limited to specific targets and described them as defensive, adding that navigation and international trade through the two waterways remain safe and uninterrupted.

The latest Energy Information Administration (EIA) report showed that US crude Oil inventories fell by 391,000 barrels, missing expectations for a 1.6 million-barrel decline after inventories dropped by 4.45 million barrels a week earlier.

In its Short-Term Energy Outlook released on Wednesday, the EIA raised its average WTI price forecast for 2026 to $84.65 per barrel. The agency said global Oil inventories have fallen by around 400 million barrels so far this year and are expected to decline further through year-end, as significant volumes of Middle Eastern production and exports remain offline.

Meanwhile, OPEC offered a mixed demand outlook. The group lowered its forecast for global Oil demand growth in 2026 to 380,000 barrels per day from 580,000 bpd. However, it raised its 2027 growth estimate to 2.36 million bpd from 2.16 million bpd.

According to Reuters sources, the European Central Bank (ECB) is expected to further tighten monetary policy in the months ahead and could raise rates in October.

The ECB hiked rates by 0.25% on Thursday for the second time this year, recognizing that inflation risks are tilted to the upside, while growth risks are tilted to the downside.

A prolonged US-Iran war and the Russia-Ukraine war sent energy prices soaring, prompting ECB members to take preemptive action to stop inflation from spreading to other goods and services.

At the ECB press conference, ECB President Lagarde said she couldn’t anticipate the next move and reaffirmed the meeting-by-meeting mantra.

• Gold retreats as hot US PPI boosts Fed-tightening bets.
• WTI above $100 sends the US 10-year yield toward 4.93%.
• Friday CPI could decide whether September hike becomes unavoidable.

Gold price retraces by about 0.90% on Thursday as traders price in a hawkish Federal Reserve (Fed) following the release of the US Producer Price Index (PPI) for August. The risk-off sentiment in the market is supported by a jump in energy prices with Brent and WTI crude benchmarks rising above the $100 threshold. The XAU/USD trades at $4,360 at the time of writing.

XAU/USD falls as wholesale inflation and Crude spike revive Fed fears

The US PPI came in at 0.4% MoM, matching forecasts, but its annual rate reached 5.4%, slightly above the expected 5.3%. Excluding volatile items, the data were aligned with economists' predictions, though the monthly core increase was 0.2%, lower than the estimated 0.3%, and the yearly core figure was 4.6% as expected.

At the same time, the US Department of Labour revealed that Initial Jobless Claims for the week ending September 5 rose by 205K above forecasts of 205K but below the previous week's print.

The PPI reading, alongside surging energy prices, increased the chances that the Fed will raise interest rates by 25 basis points at next week’s meeting. Money markets see a nearly 70% chance for an increase, based on the CME FedWatch Tool.

West Texas Intermediate (WTI), the US Crude benchmark, cleared the $100 per barrel barrier for the first time since mid-May. In addition, US Treasury yields are rising with the 10-year benchmark note soaring nearly 7 basis points at 4.93%.

The US Dollar Index (DXY), which tracks the buck’s performance against six currencies, is up 0.2% to 98.99, exerting pressure on the yellow metal that is denominated in US Dollars.

Traders' focus shifts to Friday’s Consumer Price Index (CPI) release. August’s CPI is foreseen rising from 0.1% to 0.4% MoM, and for the last 12 months is expected to remain unchanged at 3.4%. Core CPI is estimated to hold at 0.2% Mo and to dip from 2.5% to 2.4% YoY.

The US docket will also feature the University of Michigan's preliminary Consumer Sentiment reading for September.

XAU/USD Price Forecast: Gold retreats toward 100-day SMA, eyes on $4,200

Gold price consolidated above the 100-day Simple Moving Average (SMA) of $4,339, keeping the yellow metal from testing the $4,282 September 2 low.

The Relative Strength Index (RSI) signals that further sideways trading lies ahead as the 200-day SMA is at $4,538, capping Bullion’s advance.

For a bearish continuation, XAU/USD must drop below the 100-day SMA and also clear the $4,300 mark. Below the next stop is $4,282, followed by the 50-day SMA at $4,266, and by $4,200.

On the upside, if Gold rises past $4,400, a move to the $4,450 psychological level is likely to. If hurdled, the $4,500 would be up for grabs, ahead of the 200-day SMA.

• EUR/JPY rises above 179.00 after the European Central Bank raised its deposit rate to 2.50%, its second hike this year.
• ECB President Christine Lagarde called the move a "no-brainer," and markets lifted bets on further hikes, keeping the Euro firm.
• The cross had slid over the past week on a resurgent Japanese Yen.

EUR/JPY rises above the 179.00 mark on Thursday in the aftermath of the European Central Bank (ECB) raising its deposit rate by a quarter point to 2.50%, its second hike since the US-Iran war broke out. The decision was fully expected and steadied a cross that had slid sharply over the past week from levels above 180.00. At the time of writing, EUR/JPY is up 0.40%, with the Euro (EUR) snapping the Japanese Yen's (JPY) three-day winning streak.

ECB President Christine Lagarde called the hike a "no-brainer" and, alongside upward inflation forecasts and an acknowledgment of the Eurozone's resilience, led investors to add to bets on further tightening. She stopped short of pre-committing to another move but warned that gas prices could rise on supply disruptions or a cold winter. Euro area inflation ran at 3.3% in August, driven by energy.

On another note, bets that the Bank of Japan (BoJ) will raise rates as soon as this month, together with suspected intervention to prop up the currency, sparked a rally over the past week that dragged EUR/JPY lower. An adviser to Prime Minister Sanae Takaichi said earlier this week the BoJ is likely to hike in September and deliver another increase by early next year.

Attention now turns to the BoJ, which meets on September 18 and is expected to weigh in with its own hike. A BoJ move would revive the Yen and pressure the cross, while a hold would leave the hawkish ECB in the driving seat. With Oil near $100 a barrel and the Middle East conflict still driving energy prices, both central banks remain focused on inflation.

Short-term technical analysis:

On the 4-hour chart, EUR/JPY trades at 179.38. The cross has bounced off its recent lows and now holds above the 20-period Simple Moving Average (SMA) at 178.81, hinting at a modest recovery while remaining well below the 100-period SMA at 183.51, which keeps the broader tone capped. The Relative Strength Index (RSI) has recovered toward the mid-40s from oversold territory, suggesting that bearish momentum has faded but a decisive trend is yet to emerge.

On the topside, immediate resistance is located at 179.46, where the latest horizontal barrier sits ahead of the distant 100-period SMA near 183.51, a level that would need to be reclaimed to reassert a stronger bullish bias. On the downside, initial support is seen at 179.05, reinforced by the nearby 20-period SMA and clustered horizontal levels at 178.78 and 178.54; a break below this band would expose a deeper pullback toward prior lows and undermine the current stabilisation.

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

The European Central Bank (ECB) increased the Deposit Facility Rate to 2.50%, the Refinancing Rate to 2.65% and the Marginal Lending Facility to 2.90%, effective from September 16. The decision was accompanied by a clear warning that the outlook remains highly uncertain, with risks tilted to the upside for inflation and to the downside for growth.

The new staff projections see headline inflation averaging 3% in 2026, 2.5% in 2027 and 2.1% in 2028. The 2026 forecast was unchanged from June, but projections for 2027 and 2028 were revised higher. Inflation excluding energy and food is expected to remain above target, averaging 2.5% in 2026, 2.6% in 2027 and 2.3% in 2028.

ECB President Christine Lagarde said the economy was proving resilient, supported by consumption, public investment and a recovery in services. In addition, manufacturing remains solid, consumer confidence has rebounded and the labour market is robust, although employment growth is slowing. The near-term growth outlook has improved, with business and housing investment expected to provide further support.

The central bank nevertheless faces a difficult energy shock: higher prices are expected to feed through to core inflation and food costs, while a worsening conflict, supply disruptions or an unusually cold winter could push gas prices higher still. The ECB will therefore remain data-dependent and meeting-by-meeting (as per usual), without pre-committing to a particular rate path (as per usual).

Overall

This is a hawkish hike, but stagflationary risks remain. The ECB raised rates because it expects inflation to remain above target for longer, even as growth risks have increased. The combination of resilient domestic demand, higher inflation forecasts and the possibility of second-round effects leaves the door open to further tightening, although the Governing Council will wait for evidence on how persistent the energy shock becomes.

Following today's event, the probability of another quarter-point rate hike at the bank's October 29 gathering sits just above 61%, while markets pencil in nearly 35 basis points of tightening by year-end.