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Nordea’s Helge J. Pedersen argues that the Japanese Yen appears significantly undervalued versus the Dollar on both OECD purchasing power parity estimates and The Economist’s Big Mac Index. Despite Japan’s strong trade and current account surpluses suggesting room for Yen appreciation, persistently low Japanese interest rates versus the US continue to weigh on JPY and limit sustained currency strength.

Yen undervaluation versus Dollar highlighted

"It is not every day that the US and Japan join forces in the currency market to strengthen the yen. But that is exactly what happened in late July, after the Japanese currency had approached its lowest level in nearly four decades. The intervention worked – but only briefly."

"This is an analysis where economists traditionally look at the so-called purchasing power parity (PPP) exchange rate – the rate at which an identical basket of goods in Japan and the US would cost exactly the same. This is a rate that the OECD, among others, attempts to calculate on an annual basis, and the latest figures suggest that the yen is significantly undervalued."

"And in this year's edition, the message is very clear: Asian currencies, and the yen in particular, look cheap against the dollar. The weakening of the yen has in fact been so dramatic that a Big Mac in Japan is now markedly cheaper than in China, measured in dollars."

"Since Japan runs a large trade surplus with the US and a considerable current account surplus more broadly, all of this points to strong competitiveness – and suggests that a strengthening of the currency should be well within reach."

"And unless the interest rate gap narrows – for example through further monetary tightening by the Bank of Japan – this dynamic will persist, with ever-cheaper Japanese burgers as a consequence."

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

• XAG/USD hits session highs above $70.00, on track to close a four-week rally.
• The focus on Friday is on Fed Warsh's speech at the Jackson Hole meeting.
• Silver bulls aim for the 200-day SMA, at $72.50.

Silver (XAG/USD) heads north for the second consecutive day on Friday, with all eyes on the Federal Reserve (Fed) Chairman Kevin Warsh’s speech at the Jackson Hole Symposium, due later on the day. The white metal extends gains to two-month highs a few cents below $71.00, after bouncing from the mid-range of the $67.00s on Thursday, on track to close a four-week rally.

Investors await Fed Warsh’s speech, eager for further insight about the central bank’s monetary policy, following the poor guidance provided at July’s monetary policy meeting. On Thursday, Kansas Fed President Jeffrey Schmidt and Cleveland Fed President Beth Hammack called for immediate monetary tightening, following hot US Personal Consumption Expenditures (PCE) Price Index figures the previous day.

Technical Analysis: Bulls aim for the 200-day SMA, at $72.50

XAG/USD trades at $70.44 with near-term price action showing a constructive bias from July's trough below $55.00. Momentum indicators in the daily chart remain within positive territory, with the Relative Strength Index (14) at 66 approaching, but not yet at overbought levels, and the Moving Average Convergence Divergence (MACD) highlighting moderate bullish traction.

Bulls are likely to meet resistance at the mid-June highs between $71.35 and $71.55 ahead of the key resistance area at the 200-day Simple Moving Average (SMA), a closely watched indicator in FX markets, which is now lying at $72.50. A break above there would open the way toward the June 4 high near $75.00.

On the downside, Thursday's low, at $67.63, is likely to provide support, ahead of a secondary floor near $63.25, which capped bears on August 18, and the August 6 low, near $60.90.

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

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann highlight AUD/USD’s third consecutive daily gain, with the pair stalling just under the 0.7200 resistance. While momentum is showing negative divergence, they still see scope for a brief push above 0.7200, though not sustained or extending to 0.7220. On a one-to-three-week view, they see potential for a test of 0.7220 before pullback risks increase.

Uptrend slows but upside targets still in play

"24-HOUR VIEW: AUD edged up to within a couple of pips of the major resistance at 0.7200 yesterday, printing a high of 0.7198. AUD closed higher for the third straight day at 0.7194 (+0.31%). Despite posting fresh three-month highs, upward momentum is deteriorating, with momentum indicators showing negative divergence. That said, there is scope for AUD to rise above 0.7200. However, AUD is unlikely to maintain a foothold above this level. Any further advance is also unlikely to reach 0.7220. Support is at 0.7185; a breach of 0.7175 would indicate that the immediate upward pressure has eased."

"1-3 WEEKS VIEW: Last Thursday (19 Aug, spot at 0.7125), we highlighted that “while further AUD strength is not ruled out, it must first break clearly above 0.7150 before a move to 0.7175 can be expected.” After AUD broke clearly above 0.7150, we highlighted on Monday (24 Aug, spot at 0.7165) that “AUD strength remains intact, and the level to watch is 0.7200.” While AUD rose to a high of 0.7198 yesterday, upward momentum is deteriorating amid negative divergence on momentum indicators. However, as long as AUD holds above 0.7160 (‘strong support’ level previously at 0.7120), there is a chance for AUD to test 0.7220 before the risk of a pullback increases."

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

US investors will watch on Friday a labor market report that is far less familiar than the monthly jobs release but has gained considerable importance following the spectacular revisions of recent years. The Bureau of Labor Statistics (BLS) will publish its preliminary estimate of the annual benchmark revision to the payroll employment series for the twelve months ending March at 14:00 GMT.

Behind its particularly technical name, the Preliminary Nonfarm Payrolls (NFP) Benchmark Revision answers a relatively simple question: Has the number of payroll jobs reported month after month by US statisticians accurately reflected the reality of the labor market?

The answer could have implications well beyond the statistics themselves. Another large downward revision would reinforce the view that the US labor market slowdown has been deeper than previously thought, while an upward revision could instead show that job creation has been underestimated.

What is the Nonfarm Payrolls Benchmark Revision?

The monthly US employment report relies, among other sources, on the Current Employment Statistics (CES) survey, which collects data from businesses and government agencies to estimate the number of payroll employees in the United States (US).

Like any survey based on a sample, however, it is subject to a margin of error. Once a year, the Bureau of Labor Statistics therefore compares its estimates with a much more comprehensive dataset, which is the Quarterly Census of Employment and Wages (QCEW).

The QCEW is primarily based on unemployment insurance records that nearly all US employers are required to submit to authorities. Its coverage is much broader than that of the monthly survey, although the data are released with a lag of several months.

The benchmark revision essentially measures the difference between the employment level estimated by the CES survey and the level indicated by this more comprehensive dataset for March.

This distinction is crucial. Friday's figure is not a conventional revision to the NFP number for a particular month, nor does it directly represent the number of jobs created or lost over a year. Instead, it indicates how much the estimated total payroll employment level for the twelve months through March may need to be adjusted.

Importantly, Friday’s preliminary estimate will not immediately change the official payroll data. It is the final, benchmark revision, due in February 2027, that will be incorporated into the historical series with the Employment Situation report.

Why Friday's figure is attracting attention

Benchmark revisions used to be relatively modest, but they have become considerably larger in recent years. According to historical data presented by HAAWKS Research, the average absolute preliminary revision to total nonfarm employment was just 0.12% between 2016 and 2020. It increased to 0.34% between 2021 and 2025. Moreover, the 2024 and 2025 revisions were particularly notable.

In September 2025, the BLS estimated that the level of nonfarm employment in March 2025 should be revised downward by 911K jobs, or 0.6%. When the final benchmark revision was incorporated into the data in February 2026, the final March employment level was revised by minus 898K. 

Such a big revision raised questions about the ability of monthly surveys to accurately measure a labor market transformed by the pandemic, business births and deaths, and declining response rates to statistical surveys.

It also explains why a release once followed mainly by specialists could trigger a much stronger market reaction this year.

Another downward revision? Forecasts are unusually divided

Unlike last year, the available data do not clearly point to a significant overestimation of employment, and estimates ahead of the release are unusually divided. Wells Fargo sees an adjustment of around 100K jobs to the downside, while Pantheon Macroeconomics economists Samuel Tombs and Oliver Allen expect an overstatement of roughly 200K jobs over the 12 months through March 2026.

On the other side of the debate, Commerzbank economist Bernd Weidensteiner expects an upward revision of around 250K jobs, while Guy Berger of MacroMostly also sees a small positive revision as the most likely outcome.

This divergence partly reflects the behavior of the QCEW during 2025. Through December, QCEW employment data tracked the monthly survey figures much more closely than during the periods preceding the large revisions of 2024 and 2025.

However, uncertainty remains high as the QCEW data available ahead of Friday’s release only run through December 2025, while preliminary QCEW estimates themselves can subsequently be revised.

A positive revision would not mean the labor market is strong again

This is probably the main trap surrounding Friday's release. The benchmark essentially looks in the rear-view mirror. It will provide a more accurate assessment of the one-year employment level through March 2026, but it will not directly tell investors what has happened since then.

US employment growth has already slowed considerably. According to Commerzbank, average monthly job growth stood at just 32K between August 2025 and July 2026. A positive revision of several hundred thousand jobs could therefore improve the starting level for the year, but it wouldn’t challenge the broader conclusion that the labor market has lost momentum this year.

Bernd Weidensteiner highlights precisely this distinction: "While the revision does change the baseline, even if it won’t be incorporated into the data until next year, it is unlikely to lead to a reassessment of labor market developments since March."

The Unemployment Rate, which comes from a separate household survey, is also unaffected by this revision. The benchmark applies to the establishment survey and therefore does not rewrite the entire picture of the US labor market.

What could the revision mean for the Federal Reserve and markets?

The market reaction will probably depend less on whether the revision is positive or negative than on its magnitude. A limited adjustment, whether slightly positive or negative, would support the view that the major discrepancies observed over the past two years have diminished. It could also suggest that methodological improvements to the monthly estimates are producing results that are closer to administrative employment data.

A large positive revision would represent a more significant surprise. It would indicate that the US economy had substantially created more jobs than previously reported, potentially easing some concerns about past labor market weakness.

The most market-sensitive scenario, however, would likely be another downward revision of several hundred thousand jobs. Such an outcome would revive questions about the reliability of monthly employment figures and could reinforce the perception that labor demand weakened faster than official statistics initially suggested.

This information would be particularly important for the Federal Reserve (Fed), whose policy decisions depend heavily on the balance between inflation and employment. If investors conclude that the labor market is more fragile than previously estimated, expectations for interest-rate hikes could decrease, weighing down on the US Dollar (USD). Conversely, a significant positive revision could reinforce expectations of hikes, supporting the Greenback.

Friday's figure will not replace the next Nonfarm Payrolls report or the Unemployment Rate. It will answer a different question. Not how many jobs the US economy is creating now, but how much confidence investors should place in the employment levels they were given over the past year.

After the enormous revisions of 2024 and 2025, that question may ultimately prove just as important as the headline number itself.

Silver prices (XAG/USD) rose on Friday, according to FXStreet data. Silver trades at $70.41 per troy ounce, up 1.68% from the $69.25 it cost on Thursday.

Silver prices have decreased by 0.94% since the beginning of the year.

The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 65.38 on Friday, down from 66.44 on Thursday.

(An automation tool was used in creating this post.)

MUFG highlights that rising European natural gas prices are reviving inflation risks, which could push the Bank of England toward another rate hike and underpin the Pound. While crude Oil remains contained, UK natural gas futures have surged, and the bank notes that this divergence in energy dynamics may support both the Euro and Pound against peers.

Natural gas surge underpins BoE hike risk

"As we have highlighted this week, the natural gas backdrop in Europe is certainly pointing to upside inflation risks. Crude oil prices have been more contained but the UK natural gas front future price has gained 62.5% since the start of July and the close yesterday was the highest since January 2023 following the surge in price after the start of the Russia-Ukraine conflict."

"In the July Monetary Policy Report the BoE as always used the futures curve in a 15-day period to a certain date prior to the release (in July’s report it was 20th July) which basically had the natural gas futures prices peaking at a little over 123p in Q4 before declining to under 60p at the end of the forecast period."

"Still, the hawks on the MPC, like Catherine Mann, will no doubt highlight the energy-related inflation risks that have actually worsened and therefore makes it more difficult to ignore due to the offsetting weaker domestic economic conditions."

"For the BoE, the backdrop does not look as urgent and the data provides continued scope for the BoE to remain more patient than the ECB. Today’s panel topic does not suggest Catherine Mann will use this opportunity to provide an update on her monetary policy views but given her hawkish leanings any comment would likely focus on the potential need to act."

"A hike by the BoE is priced by year-end and that is looking more realistic given the natural gas price backdrop. The natural gas price moves in Europe will fuel divergence and provide support for the euro and pound."

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

Commerzbank’s Michael Pfister reviews EUR/USD options, noting that risk reversals turned positive again after comments by the US Treasury Secretary. He argues the earlier period of persistent positive EUR/USD risk reversals was likely an exception, and that the Euro tends to benefit whenever doubts over US policy resurface, a pattern reflected in current risk reversal pricing.

Risk reversals react to US policy signals

"Following the start of the war in Iran, risk reversals initially returned to their pre-Liberation Day levels. In other words, during periods of heightened volatility, the demand for hedging against further USD appreciation was apparently greater. This was likely due in part to the fact that the euro area was hit significantly harder by the disruption to oil and gas supplies."

"But the longer the conflict lasted - or once hostilities ended - the market moved towards slightly negative risk reversals (i.e. hedging against US dollar strength), amid very low implied volatility. Even this development was fundamentally consistent with the relationship prior to Liberation Day. Implied volatility was so low that market participants did not wish to hedge more strongly."

"It now seems reasonable to assume that the period from early April last year to the end of February was the exception rather than the rule – after all, we have consistently observed positive EUR/USD risk reversals."

"I suspect the situation is not quite so clear-cut, but depends on political signals from the US, although it is difficult to back up this assumption with data. But the past few days provide a clue: following the announcement by the US Treasury Secretary, risk reversals rose back into positive territory."

"Of course, six trading days' worth of data are too few to draw clear conclusions. The trend must therefore be monitored further over the coming weeks. Presumably, however, the foreign exchange market has not yet forgotten the uncertainty that followed Liberation Day. In other words, whenever there are sustained doubts about US policy, the euro is likely to benefit. And the risk reversals reflect precisely that."

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

ING’s Chris Turner notes a quiet, risk-positive week for global markets, with low volatility and mixed G10 FX, as the Dollar debasement theme fails to extend. Markets expect little on monetary policy from Fed Chair Kevin Warsh at Jackson Hole, and ING anticipates FX will track long-dated Treasuries, with DXY likely holding a 99.00-99.30 range.

Fed speech, yields and DXY range

"It has been a quiet, risk-positive week for global asset markets. Volatility remains low and the picture in G10 FX has been mixed, with certainly no follow-through on the dollar debasement theme which returned last week. The FX market expects little from Kevin Warsh today, with a one-day USD/JPY straddle pricing around a 35 USD pip range today."

"It may well be that he avoids any discussion of monetary policy whatsoever and is quietly contented with market pricing of a Fed September hike having slipped back to 8/9bp. If he does go near monetary policy, expect a reiteration of a Fed commitment to monetary policy – especially after his performance at the July FOMC unnerved the long-end of the Treasury market."

"We suspect FX markets will take their cue from long-dated US Treasuries today. If somehow a hawkish read emerges, then the dollar can advance against the low-yielders of CHF and JPY. If Warsh underestimates the mood at the long-end of the market and 30-year Treasury yields spike back towards 5.30%, higher volatility will see higher-yielding carry currencies underperform and probably CHF start to outperform again as it did briefly last week."

"Coincidentally, at the time as Warsh is speaking, the Bureau for Labour Statistics announces its annual nonfarm payroll benchmark revisions. Consensus expects a close to +200k revision, versus a prior revision of -911k. Any surprises here could be noteworthy."

"We presume Warsh will do his utmost to avoid upsetting the bond market today – perhaps by avoiding monetary policy altogether – and see DXY trading in a quiet 99.00-99.30 range."

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

Rabobank Senior Macro Strategist Bas van Geffen says the US-Iran stalemate and disruption in the Strait of Hormuz are keeping oil-driven inflation risks elevated. Inventories have cushioned reduced flows so far, but prolonged tensions could erode that buffer, while Venezuelan oil may eventually provide an alternative supply source.

Iran, Hormuz and Venezuela reshape oil flows

"It's increasingly difficult to see a way out of the US-Iran stalemate. Yesterday, the Qatari prime minister travelled to Tehran to try to revive the dialogue between Washington and Tehran, but President Trump thwarted hopes of diplomacy. The US president reportedly has no interest in reviving the memorandum of understanding, blocking mediators’ options to restart negotiations."

"Inventories have cushioned the impact of reduced oil flows for now, but as the stalemate continues and inventories deplete, the efficacy of the Hormuz closure increases."

"Closing the Strait of Hormuz is forcing exporting neighbours and importing countries around the globe to rethink their supply lines. As alternatives are developed, Iran’s ability to take the global economy hostage will wane."

"As a case in point, the US is negotiating a stake in Venezuela’s oil fields, and Venezuela is reportedly considering quitting OPEC."

"Still, it will take time for this alternative supply to come online. And that may require massive upfront investments, hence funding, at a time when there is already so much strain on budgets and competition for funding."

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

• USD/CHF stalls below 0.8750, on track for a 0.45% weekly appreciation.
• US Dollar firms up as Fed officials push for higher interest rates ahead of Warsh's speech at Jackson Hole.
• On Thursday, Swiss data revealed that the labour market remains resilient despite Middle East uncertainty.

The Swiss Franc (CHF) trades marginally lower against a somewhat firmer US Dollar (USD) on Friday, with market volatility subdued as investors await the speech of the Federal Reserve (Fed) Chairman, Kevin Warsh, at the Jackson Hole Symposium, due later on the day. The USD/CHF pair trades practically flat just below 0.8750, on track for a 0.45% appreciation this week.

Markets are eager for further insight into the Fed’s plans to tame hot inflationary pressures, after the disappointment of the last monetary policy meeting, which left investors pondering whether the hawkish comments of Warsh’s inaugural speeches will be supported with facts.

Fed officials call for higher interest rates

Recent US inflationary data added pressure to hike interest rates, and some Federal Reserve officials supported that view on Thursday, putting some pressure on Warsh. Kansas Fed President Jeffrey Schmidt said on CNBC that inflation is “still sticky and we've got to continue to find ways to break through" while the Cleveland Fed President Beth Hammack reiterated that it is “time to act,” referring to interest rate hikes, which provided a moderate boost to the USD.

Rabobank’s Bas van Geffen remains sceptical over how much guidance FOMC Chair Warsh will offer at Jackson Hole. Van Geffen wonders whether he will stick to his script or instead “feel compelled to be a bit more outspoken, after Treasury Secretary Bessent’s interventions in the rates market pushing back against the long end of the Treasury curve.” For Rabobank, “the lack of a monetary policy panel in this year’s schedule suggests that Warsh will stick with the first option,” reinforcing expectations that clear policy signals may remain in short supply.

The Swiss Franc, on the other hand, failed to draw support from the upbeat Swiss employment figures released on Thursday, which suggest that the Swiss labour market is withstanding the energy shock and the uncertainty from the Middle East conflict quite well.