Forex News
- Silver sits near one-year lows as the Fed kept interest rates steady while offering limited forward guidance.
- Fed kept interest rates steady at 3.75%–4.00%, pointing to ongoing expansion in overall economic activity.
- Fed Chair Warsh reaffirmed commitment to 2% inflation and price stability, emphasizing that the economy remains strong.
Silver price (XAG/USD) extends its losses for the second successive day, trading around $53.30 per troy ounce during Asian hours on Thursday. Silver remains anchored near one-year lows following the US Federal Reserve's decision to hold interest rates steady, as market participants had widely anticipated. The precious metal continues to face downward pressure as the central bank offered limited guidance regarding the timing and trajectory of its next policy move.
The Federal Reserve held interest rates steady at 3.75%–4.00%, noting that economic activity continues to expand. In its statement, the Fed highlighted resilient domestic spending, robust capital investment, and strong productivity growth. Addressing its employment mandate, the central bank observed that job gains have kept pace with the workforce while the unemployment rate has shown little change.
On the inflation front, the Fed acknowledged that price pressures remain elevated, but it chose to pause further rate hikes to gather additional data and assess the appropriate monetary policy stance. The decision was not unanimous, as Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented in favor of an immediate rate increase.
Fed Chair Kevin Warsh reaffirmed the Federal Open Market Committee's commitment to delivering price stability and achieving its 2% inflation target, emphasizing that the underlying economy remains strong. Warsh also outlined future scheduling for monetary policy, noting that the Fed will hold eight meetings next year, including one without a formal vote, and that he anticipates six policy-setting meetings in 2028.
Traders are now turning their attention to the upcoming US Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred inflation metric, for clearer signals on the future trajectory of monetary policy.
Meanwhile, market participants are monitoring renewed diplomatic initiatives aimed at preventing further escalation of conflict in the Middle East. Despite these diplomatic efforts, persistently elevated oil prices continue to fuel inflation concerns and bolster expectations of prolonged high interest rates. This environment of higher borrowing costs presents a challenging backdrop for Silver, as rising yields and persistent rate pressure tend to weigh on non-yielding precious metals.
Systematic flows rotate out of Silver into base metals
According to TD Securities, recent systematic activity has seen Commodity Trading Advisors adjust their exposure across the metals complex, with the bank noting that “in metals markets, CTAs are sellers of silver and buyers of zinc and lead on the day.” This shift underscores the divergence between precious and base metals in current positioning flows, as investors trim silver while selectively adding to industrial metals such as zinc and lead.
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.
- AUD/USD drifts higher to around 0.7055 in Thursday’s Asian session.
- Market expectations for an RBA rate hike had jumped to 82% following hot CPI data.
- Fed kept its benchmark interest rate unchanged on Wednesday; Warsh offered no clear steer on a December move.
The AUD/USD pair gathers strength to near 0.7055 during the Asian trading hours on Thursday. The Australian Dollar (AUD) edges higher against the US Dollar (USD) as hotter inflation data bolsters expectations of Reserve Bank of Australia (RBA) rate hikes. The US September Personal Consumption Expenditures (PCE) inflation report will be in the spotlight later on Thursday.
Australia’s headline Consumer Price Index (CPI) accelerated to 4.3% YoY in September, compared to 4.0% in August, the Australian Bureau of Statistics revealed on Wednesday. This figure came in above the market consensus of 4.2%. On a monthly basis, the CPI inflation rose to 0.8% in September, up from 0.4% in the previous reading.
This report has boosted the case for an RBA rate hike in the upcoming meeting and supports the Aussie. Markets are now pricing in nearly an 82% chance of an interest rate increase to 4.85% at the next RBA Board meeting, up from 62% before the data was released, according to the ASX RBA Rate Tracker.
On Wednesday, the US Federal Reserve (Fed) held its benchmark interest rate steady at 3.75%-4.00%, as widely expected. According to the statement, the central bank upgraded its assessment of the economy but acknowledged that inflation "remains elevated.”
During the press conference, Fed Chairman Kevin Warsh did not offer guidance on the outlook, but acknowledged the central bank had not achieved price stability. "We're working on it," Warsh said. Traders are pricing in a 78% chance of a hike in December, the CME FedWatch tool showed.
"Warsh's silence on further rate hikes was interpreted as dovish, or not hawkish enough," said Carol Kong, a currency strategist at Commonwealth Bank of Australia.
Australia inflation surprise bolsters RBA hike expectations and supports the Aussie
Strategists at Brown Brothers Harriman highlight that the latest Australia inflation data “beat expectations, strengthening the case for another RBA hike and underpinning AUD.” They note that September headline CPI “rose 4.3% y/y (consensus: 4.2%) vs. 4.0% in August reflecting rising housing and transport costs,” leaving price pressures running hotter than the central bank had anticipated.
BBH stresses that “inflation is materially worse than the RBA assessed in August, when it forecast year-end headline CPI at 3.6% and trimmed mean at 3.3%.” In their view, “this argues for additional tightening,” with RBA cash rate futures having “raised odds of a 25bps hike to 4.85% on November 3 from 60% to 85%, and increased bets on another hike in Q1.”
On the core measures, BBH points out that “trimmed mean CPI matched consensus at 3.6% y/y up from 3.5% in August.” However, they emphasize that “the policy-relevant Q3 trimmed mean CPI ran hot at 3.7% y/y (consensus: 3.6%) vs. 3.6% in Q2,” reinforcing the view that underlying inflation remains uncomfortably elevated for the RBA.
Warsh flags investment surge and AI risks but avoids pre-committing on rates
Fed Chair Warsh’s speech scores 5.6/10 on the FXS Speechtracker, modestly softer relative to the historical average of 6.1/10, reflecting a cautious tone despite upbeat comments on structural growth and an investment surge. The remark about being “over-scarred from the global financial crisis” underscores a persistent risk-awareness that tempers optimism, while repeated refusals to prejudge the October and December meetings keep rate expectations deliberately opaque even as Warsh highlights AI and investment as key upside forces. Overall, the tone is balanced: supportive of continued growth and AI-driven productivity, yet framed by an emphasis on financial stability and tail risks that limits any fresh hawkish signal for the Dollar.
The FXS Fed Sentiment Index was unchanged, moving 0.00 points to a still-elevated level of 127.51, indicating that the speech left the perceived policy stance firmly in hawkish territory despite the lack of incremental tightening cues. The steady index reading, combined with the slightly below-baseline FXS Speechtracker score, suggests the Dollar’s existing hawkish premium remains intact but was not meaningfully reinforced by this appearance.
Technical Analysis: AUD/USD keeps a bullish vibe above the 100-day SMA
In the daily chart, AUD/USD holds a mildly bullish near-term bias as spot trades above the 100-day simple moving average (SMA) and the Bollinger middle band, suggesting a constructive underlying trend after the recent recovery from sub-0.70 levels. The Relative Strength Index (RSI) at 57 is in positive territory without being overbought, hinting that upside momentum is improving but not stretched.
On the topside, immediate resistance is located at the Bollinger upper band near 0.7065, where the current advance is starting to meet headwinds. On the downside, initial support is seen at the 100-day SMA at 0.7035, followed by the Bollinger middle band around 0.6990, while a deeper pullback would likely find firmer demand toward the lower Bollinger band near 0.6915.
(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.
- DXY attracts some dip-buyers during the Asian session, though it lacks follow-through.
- Oil-driven inflation concerns keep Fed rate hike bets on the table and support the USD.
- Geopolitical uncertainties further benefit the safe-haven buck ahead of crucial US data.
The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, struggles to capitalize on a modest Asian session uptick on Thursday, though it holds above the 102.00 round figure. Moreover, the index remains close to a two-week high, touched on Wednesday, as traders now look forward to important US macro releases for a fresh impetus.
The Advance US GDP report, along with the Personal Consumption Expenditures (PCE) Price Index, is due to be published later today and will be scrutinized for more cues about the Federal Reserve's (Fed) future policy path amid bets for a December rate hike. Hence, stronger data will reinforce market expectations and push the DXY higher. Meanwhile, the immediate reaction to any disappointment from the market-moving reports is likely to be limited on the back of the Fed's hawkish pause on Wednesday.
In a widely expected move, the US central bank held interest rates steady at the end of the October policy meeting in a 10-2 vote, with Governor Lisa Cook and Cleveland Fed President Beth Hammack preferring a quarter-point hike. Moreover, Fed Chair Kevin Warsh signaled during the post-meeting press conference that the central bank remains vigilant against persistent inflation and geopolitical risks. This, along with persistent geopolitical uncertainties, should act as a tailwind for the Greenback and support the DXY.
In the latest developments surrounding the Middle East crisis, US Vice President JD Vance reportedly sent a letter to Mohsen Rezaei, secretary of Iran's Supreme National Security Council, in an effort to revive peace negotiations. This unfolds as US President Donald Trump threatens to resume military action in the approaching weeks. US officials have told several Middle East countries and regional allies to be prepared for a potential short, intense military campaign against Iran after the November 3 midterm elections.
Meanwhile, regional mediators led by Qatar are working to restart negotiations between the US and Iran to prevent a resumption of the war. Nevertheless, the geopolitical risk premium remains in play, suggesting any corrective pullback in the DXY is more likely to be bought into and remain limited. Bulls, however, might wait for a sustained move beyond the 102.55 horizontal barrier before positioning for the resumption of the recent uptrend from the September low and aiming to test the October swing high.
DXY 1-hour chart
Technical Analysis
The overnight corrective pullback showed some resilience below a confluence – comprising the 100-period Exponential Moving average (EMA) and the 38.2% Fibonacci retracement – around 102.10. This is closely followed by the 38.2% retracement at 102.09, with further demand seen at the 50.0% and 61.8% levels at 101.97 and 101.85, and then the 78.6% retracement at 101.67. On the topside, immediate resistance appears at the 23.6% retracement near 102.25, ahead of the cycle high anchor around 102.49, where a break would open the way for a more decisive bullish extension.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
(This story was corrected on October 29 at 02:14 GMT to say that the Advance US GDP report will be published later today, not US ADP report.)
Inflation FAQs
Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
- The ECB is expected to hold its deposit rate steady at 2.50% at Thursday's meeting.
- Energy-driven price pressures keep potential December CB rate hike expectations alive among investors.
- Markets eagerly await ECB commentary on inflation risks, growth, and future monetary policy trajectory.
EUR/USD depreciates after registering modest gains in the previous day, trading around 1.1140 during Asian hours on Thursday. The pair loses ground as the US Dollar (USD) bounces back from the previous day's losses after the Federal Reserve (Fed) kept interest rates unchanged.
The Federal Reserve held interest rates steady at 3.75%–4.00%, noting that economic activity continues to expand. In its statement, the Fed highlighted resilient domestic spending, robust capital investment, and strong productivity growth. Addressing its employment mandate, the central bank observed that job gains have kept pace with the workforce while the unemployment rate has shown little change.
On the inflation front, the Fed acknowledged that price pressures remain elevated, but it chose to pause further rate hikes to gather additional data and assess the appropriate monetary policy stance. The decision was not unanimous, as Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented in favor of an immediate rate increase.
Fed Chair Kevin Warsh reaffirmed the Federal Open Market Committee's commitment to delivering price stability and achieving its 2% inflation target, emphasizing that the underlying economy remains strong. He also outlined future scheduling for monetary policy, noting that the Fed will hold eight meetings next year—including one without a formal vote—and that he anticipates six policy-setting meetings in 2028.
Meanwhile, the Euro (EUR) faces headwinds as the European Central Bank (ECB) is expected to hold its deposit rate unchanged at 2.50% at its Thursday meeting, following a total of 50 basis points in rate increases earlier in the year. However, persistent energy-driven inflation continues to spark debate over whether policymakers might pursue another rate hike in December. Consequently, market participants are closely monitoring the ECB’s evaluation of inflation risks, economic growth, and any guidance on the future trajectory of interest rates.
Euro credit conditions tighten only modestly as ECB pass-through stays smooth
Analysts at Danske Bank highlight that the ECB’s Q3 Bank Lending Survey points to only a limited impact from recent policy moves on credit conditions. They note that “banks tightened credit standards more than expected, although the net share reporting a tightening remained low from a historical perspective and was mainly driven by banks in France.” In Danske’s view, this pattern “suggests that the ECB's tightening has so far only led to a modest tightening of credit standards and should not in itself stop the ECB from tightening further as the pass-through remains relatively smooth.”
Economic Indicator
ECB Rate On Deposit Facility
One of the European Central Bank's three key interest rates, the rate on the deposit facility, is the rate at which banks earn interest when they deposit funds with the ECB. It is announced by the European Central Bank at each of its eight scheduled annual meetings.
Read more.Last release: Thu Sep 10, 2026 12:15
Frequency: Irregular
Actual: 2.5%
Consensus: 2.5%
Previous: 2.25%
Source: European Central Bank
- USD/CAD softens to around 1.3975 in Thursday’s early Asian session.
- The BoC raised interest rates for the first time in more than three years.
- The Fed kept its benchmark interest rate at current levels in October.
The USD/CAD pair loses ground to near 1.3975 during the early Asian trading hours on Thursday. The Canadian Dollar (CAD) strengthens against the US Dollar (USD) after the Bank of Canada (BoC) delivers a rate hike. Traders will keep an eye on the preliminary reading of the US Gross Domestic Product (GDP) for the third quarter (Q3) and Personal Consumption Expenditures (PCE) inflation data for September, which are due on Thursday.
The BoC decided to raise its benchmark overnight interest rate by 25 basis points (bps) to 2.50% at its October policy meeting on Wednesday. Governor Tiff Macklem said additional rate hikes might be necessary, although policymakers would proceed cautiously given uncertainty surrounding the economic outlook.
According to the BoC statement, "Given the ongoing resilience of the global economy, the Bank has revised up global GDP growth slightly to 3.1% in 2026, while growth in 2027 and 2028 remains unchanged from the July projection at 3.2%.
Oil prices rise on Thursday amid renewed concerns over energy supply disruptions in the Middle East. Yemen's Iran-aligned Houthis attacked Aden airport on Wednesday after the Iran-aligned group warned people to evacuate the facility, per Reuters. On Tuesday, the Houthis said that they had launched a ballistic missile toward the Ras Tanura oil refinery in eastern Saudi Arabia, the kingdom’s largest refinery.
It is worth noting that Canada is a major oil-exporting country, and high crude oil prices generally have a positive impact on the Loonie.
As widely expected, the Federal Reserve (Fed) held its benchmark federal funds rate in a range of 3.75% to 4.00% on Wednesday.
The US central bank acknowledged inflation 'remains elevated,' upgrading its assessment of the economy, signaling that further hikes may come depending on the performance of inflation.
BoC hike expectations build but banks doubt scope for sustained CAD gains
Analysts at BBH highlight that underlying inflation is running close to the Bank of Canada’s projections, noting that “the average of CPI trim and median was 1.85% y/y in September, tracking just below the BoC’s 2.0% Q3 projection.” They add that “the pick-up in firm’s one- and two-year inflation expectations could lift the core CPI outlook, reinforcing the case for further hikes.” BBH also expects the BoC to revise its projections higher, arguing that “the BoC will likely raise its inflation and real GDP forecast, which can underpin CAD,” as “September headline CPI printed at 3.1% y/y, exceeding the bank’s 2.5% Q3 projection, while Q2 real GDP grew 3.3% annualized vs. the bank’s 2.5% projection.”
Warsh underscores unwavering 2% inflation goal, keeping Dollar bulls engaged
Warsh’s press conference tone is firmly hawkish, with the 7/10 FXS Speechtracker score in line with the established baseline, underscoring continuity rather than a regime shift. By stressing that “ensuring price stability is not about a fixed date on a calendar” and highlighting “new monetary medicine” plus the September removal of accommodation, the message is that policy will remain data-driven and resolutely focused on quashing inflation, even as inflation expectations are said to be “going the right way.” Repeated assurances of “no ifs and or buts, we will deliver price stability” and a hard 2% PCE target, alongside acknowledgement that interest rates are biting in technology and CAPEX, reinforce a narrative of ongoing restrictive policy that is supportive for the Dollar and keeps risk assets sensitive to further tightening signals.
The FXS Fed Sentiment Index jumped by +14.39 points to 141.89, a clear move deeper into hawkish territory and consistent with the steady 7/10 tone captured by the FXS Speechtracker. With the index far above the neutral 100 line, markets are likely to interpret Warsh’s emphasis on effective “monetary medicine” and unwavering commitment to the 2% PCE target as validation of a higher-for-longer rate path, a backdrop that typically underpins the Dollar while posing headwinds for high-beta FX and rate‑sensitive assets.
Technical Analysis: USD/CAD retains a bearish tone below the 100-day SMA
In the daily chart, USD/CAD keeps a bearish near-term tone as spot holds beneath the 100-day simple moving average (SMA) and the Bollinger middle band. The pair is retreating from the upper half of the recent Bollinger envelope, while the Relative Strength Index (14) at 38.5 leans toward weak momentum rather than outright oversold conditions, hinting that sellers still have the upper hand but downside traction is moderating.
On the topside, initial resistance emerges at the 100-day SMA near 1.4045, followed by the Bollinger middle band at 1.4140 and then the upper band toward 1.4350, where a break would be needed to ease the current bearish pressure. On the downside, the first notable support sits at the Bollinger lower band around 1.3930, and a clear move beneath this floor would open the path for an extension of the corrective leg in the coming sessions.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
- GBP/USD attracts fresh sellers during the Asian session amid reviving USD demand.
- Oil-driven inflation concerns keep Fed rate hike bets on the table and support the buck.
- Geopolitical risks further underpin the USD as traders look to crucial US macro data.
The GBP/USD pair meets with a fresh supply during the Asian session on Thursday, stalling the previous day's bounce from the 1.3275-1.3270 region, or a nearly two-week low. Spot prices drop to the 1.3300 mark in the last hour amid a broadly firmer US Dollar (USD), though the lack of follow-through selling warrants caution for bearish traders.
The USD regains positive traction following the previous day's post-FOMC slide as inflation risks stemming from elevated energy prices keep bets for another rate hike by the Federal Reserve (Fed) this year. According to the CME Group's FedWatch Tool, traders are currently assigning around an 80% chance that the US central bank will raise borrowing costs again in December. Moreover, persistent geopolitical uncertainties act as a tailwind for the safe-haven Greenback, which, in turn, is seen exerting some downward pressure on the GBP/USD pair.
In the latest developments surrounding the Middle East crisis, US Vice President JD Vance reportedly sent a letter to Mohsen Rezaei, secretary of Iran's Supreme National Security Council, in an effort to revive peace negotiations. This unfolds as US President Donald Trump threatens to resume military action in the approaching weeks. The Wall Street Journal reported that US officials have told several Middle East countries and regional allies to be prepared for a potential short, intense military campaign against Iran after the November 3 midterm elections.
Meanwhile, regional mediators led by Qatar are working to restart negotiations between the US and Iran to prevent a resumption of the war. Furthermore, USD bulls might opt to wait for more cues about the Fed's future policy path beyond December before placing fresh bets. Hence, the focus now shifts to the release of the Advance US Q3 GDP report and the Personal Consumption Expenditures (PCE) Price Index. In the meantime, expectations of tighter monetary policy from the Bank of England (BoE) could help limit the downside for the GBP/USD pair.
GBP/USD 4-hour chart
Technical Analysis
The GBP/USD pair holds a mildly bullish near-term bias above the 100-period Simple Moving Average (SMA) on the 4-hour chart and the mid-range Fibonacci supports. Spot prices currently trade just above the 38.2% retracement, suggesting a constructive tone while upside is being probed toward the upper part of the recent recovery range.
Meanwhile, initial resistance emerges at the 23.6% Fibo. retracement at 1.3352, ahead of the cycle high anchor near 1.3417. On the downside, immediate support is seen at the 38.2% retracement at 1.3311, followed by the 50.0% level at 1.3278 and deeper Fibonacci floors at 1.3246 and 1.3199, with the 1.3140 area marking a more distant structural base.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Euro.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.07% | 0.02% | 0.03% | -0.10% | -0.10% | -0.02% | 0.05% | |
| EUR | -0.07% | -0.05% | -0.04% | -0.19% | -0.18% | -0.10% | -0.03% | |
| GBP | -0.02% | 0.05% | 0.00% | -0.14% | -0.13% | -0.05% | 0.01% | |
| JPY | -0.03% | 0.04% | 0.00% | -0.14% | -0.13% | -0.07% | 0.00% | |
| CAD | 0.10% | 0.19% | 0.14% | 0.14% | 0.01% | 0.09% | 0.16% | |
| AUD | 0.10% | 0.18% | 0.13% | 0.13% | -0.01% | 0.09% | 0.14% | |
| NZD | 0.02% | 0.10% | 0.05% | 0.07% | -0.09% | -0.09% | 0.10% | |
| CHF | -0.05% | 0.03% | -0.01% | -0.01% | -0.16% | -0.14% | -0.10% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
The People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead on Thursday at 6.7147 compared to the previous day's fix of 6.7165 and 6.6596 Reuters estimate.
PBOC FAQs
The primary monetary policy objectives of the People's Bank of China (PBoC) are to safeguard price stability, including exchange rate stability, and promote economic growth. China’s central bank also aims to implement financial reforms, such as opening and developing the financial market.
The PBoC is owned by the state of the People's Republic of China (PRC), so it is not considered an autonomous institution. The Chinese Communist Party (CCP) Committee Secretary, nominated by the Chairman of the State Council, has a key influence on the PBoC’s management and direction, not the governor. However, Mr. Pan Gongsheng currently holds both of these posts.
Unlike the Western economies, the PBoC uses a broader set of monetary policy instruments to achieve its objectives. The primary tools include a seven-day Reverse Repo Rate (RRR), Medium-term Lending Facility (MLF), foreign exchange interventions and Reserve Requirement Ratio (RRR). However, The Loan Prime Rate (LPR) is China’s benchmark interest rate. Changes to the LPR directly influence the rates that need to be paid in the market for loans and mortgages and the interest paid on savings. By changing the LPR, China’s central bank can also influence the exchange rates of the Chinese Renminbi.
Yes, China has 19 private banks – a small fraction of the financial system. The largest private banks are digital lenders WeBank and MYbank, which are backed by tech giants Tencent and Ant Group, per The Straits Times. In 2014, China allowed domestic lenders fully capitalized by private funds to operate in the state-dominated financial sector.
- USD/JPY recovers as the Fed maintains rates, with two dissenting votes favoring a 25-bps hike.
- Strong AI sector earnings and Fed Chair Warsh's firm inflation stance support market sentiment.
- Safe-haven outflows amid rising bond yields weigh on the Japanese Yen despite upcoming BoJ policy decisions.
USD/JPY recovers its recent losses from the previous day, trading around 158.00 during Asian hours on Thursday. The pair gains ground as the US Dollar (USD) bounces back from its previous day's losses. The Federal Reserve (Fed) recently opted to keep interest rates unchanged, even as two policymakers dissented in favor of a 25-basis-point increase.
In subsequent remarks, Fed Chair Kevin Warsh reaffirmed the Federal Open Market Committee's commitment to delivering price stability and achieving its 2% inflation target, emphasizing that the economy remains strong. He also outlined future monetary policy schedules, noting that the Fed will hold eight meetings next year, including one without a vote, and that he expects six policy-setting meetings in 2028.
Meanwhile, the Japanese Yen (JPY) also faces pressure from safe-haven outflows. This shift is driven by a decline in government bonds alongside rising market sentiment surrounding artificial intelligence. Supporting the positive AI sector outlook, South Korean chipmaker SK Hynix reported strong third-quarter results and announced increased shareholder returns fueled by AI-driven profits.
Traders are turning their focus to the Bank of Japan’s upcoming policy meeting due on Friday. While interest rates are widely expected to remain unchanged, officials may signal a potential December rate hike in response to persistent inflationary pressures.
Strategists at Rabobank highlight the improving performance of the Japanese Yen within the G10 complex, noting that “the JPY is the second best performing G10 currency in the half year to date after the NOK” and “the fourth best performing G10 currency in the year to date.” They caution, however, that “significant amounts of FX intervention in favour of the JPY have been a notable factor in supporting it this year,” underscoring the extent to which official action has contributed to the currency’s recent resilience.
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.
- WTI price jumps to near $101.20 in Thursday’s early Asian session.
- An attack on a refinery in Saudi Arabia and worries that the US could strike Iran after US midterm elections boost the WTI price.
- Crude oil inventories fell by 1.462 million barrels in the week ended October 23, EIA said.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $101.20 during the early Asian trading hours on Thursday. WTI rises amid renewed concerns about additional energy supply disruptions in the Middle East.
Reuters reported that Yemen's Iran-aligned Houthis attacked Aden airport on Wednesday after the Iran-aligned group warned people to evacuate the facility. On Tuesday, the Houthis said that they had launched a ballistic missile toward the Ras Tanura oil refinery in eastern Saudi Arabia, the kingdom’s largest refinery.
US officials have told several Middle East countries and regional allies to be prepared for potential renewed military action against Iran after next week’s midterm elections in the US, as well as the possibility that Iran will attempt to retaliate against them.
"Crude futures once again pricing in nearer term tighter supplies on news the US is likely to re-start military operations soon, which could be more intense than in the past given the latest attacks on Saudi Arabia and other Middle East allies," said Dennis Kissler, senior vice president of trading at US financial services firm BOK Financial.
US crude oil inventories declined by more than expected last week. According to the Energy Information Administration (EIA), crude stockpiles dropped by 1.462 million barrels in the week ending October 23, compared to a fall of 3.061 million barrels in the previous week. The market consensus was for a decline of 300,000 barrels.
Middle East risks and freight costs keep crude skewed to the upside
According to TD Securities, crude oil prices are likely to remain supported in the near term, with the bank expecting that "crude oil will remain skewed to the upside in the near term as escalation risk ahead of Israeli elections and US midterm elections remains elevated." The analysts highlight that "recent Houthi strikes have seen risk premium pricing in the market increase, while persistent tanker attacks by Iran appear to have been successful in reducing some Hormuz flows," reinforcing the geopolitical risk premium embedded in current pricing.
TD Securities also points to freight dynamics as an increasingly important factor, noting that "beyond escalation in the Middle East conflict, freight rates have increasingly become the important marginal driver, with elevated landed prices for refiners potentially putting a cap on crude oil upside as weaker margins may limit refiner runs." In their view, the combination of heightened geopolitical risk and rising freight costs is supporting crude, even as pressure on refining margins may temper the extent of further gains.
Technical Analysis: WTI maintains a constructive outlook above the 100-day SMA
In the daily chart, WTI US Oil extends its advance well above the 20-day Bollinger simple moving average and the 100-day simple moving average (SMA), keeping the near-term bias firmly bullish while prices press into the upper half of the Bollinger envelope. The Relative Strength Index (14) at 63 leans into bullish territory but stays shy of overbought, suggesting upside momentum is constructive yet not excessively stretched.
On the topside, initial resistance is aligned with the upper Bollinger band around $104.00, where the recent impulsive leg could begin to meet profit-taking. On the downside, immediate support level is seen ath the $100.00 psychological level, followed by the mid-Bollinger band near $95.10 and the lower limit Bollinger band at roughly $86.15. A breach of this level could expose the 100-day SMA around $85.15, levels that would be expected to attract dip-buying while the broader uptrend remains intact.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
- USD/JPY has won back most of its October 22-23 drop and is just under 158.00.
- Fed Chair Warsh says most Fed officials don't think the economy is too hot.
- The BoJ decides Friday, and traders price a hold at 1.25% near 86%.
Most of USD/JPY's October 22-23 drop is back, and the Fed's hold didn't add to it. The pair was above 158.00 in the run-up to the Fed's decision and made its session high, short of 158.50, as Fed Chair Warsh's press conference began. It's back just under 158.00, above a session low just above 157.50.
Fed Chair Warsh said most Fed officials don't think the US economy is running too hot, and that faster growth doesn't by itself mean more inflation. USD/JPY gave back its rise above 158.00 during his answers, after the Fed held at 3.75%-4.00% against 1.25% at the Bank of Japan (BoJ).
USD/JPY's October 22-23 drop came with a global selloff in technology stocks, as investors bought back the Yen they had borrowed. It climbed back as chip stocks recovered on Monday and Tuesday. Wednesday's Fed decision and press conference moved USD/JPY across a smaller range than Monday's rebound in chip stocks did.
On the calendar
Thursday's 12:30 GMT US releases on third-quarter growth and September prices feed the Fed side of USD/JPY's rate gap. Tokyo's Consumer Price Index (CPI) for October follows at 23:30 GMT, with the measure excluding fresh food forecast at 2.6% after 2.7%. Japan's jobless rate is forecast to hold at 2.5%.
The BoJ's decision on Friday has no set time, its quarterly outlook report is due at 03:00 GMT, and BoJ Governor Ueda takes questions at 06:30 GMT. With a hold priced near 86%, they bear on the timing of the next hike, the BoJ side of the gap.
On the charts
The 50-day and 200-day Exponential Moving Averages (EMA) are about a fifth of a yen apart, and USD/JPY is trading between them. Since October 1 it has traded between just above 156.00 and just under 159.00, and the October 23 low is the bottom of that run of sessions.
USD/JPY daily chart
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
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