Forex News
- WTI rebounds as uncertainty around US-Iran talks keeps supply risks in focus.
- Saudi pipeline flows and higher Gulf exports ease some concerns over Middle East supply.
- WTI holds above key daily SMAs, though momentum indicators remain mixed.
West Texas Intermediate (WTI) Oil rebounds on Wednesday and remains on track for a monthly gain of around 5.5%. The lack of progress in US-Iran negotiations to reopen the Strait of Hormuz keeps geopolitical risks elevated, even as Middle East supply conditions improve. At the time of writing, WTI trades around $90, recovering part of the previous day’s losses.
The US benchmark fell over 4% on Tuesday, slipping to its lowest level since September 4, as easing supply concerns weighed on prices. Reuters reported that Saudi Arabia resumed tanker loadings at Yanbu after restarting its East-West pipeline, which provides an alternative route around Hormuz. Goldman Sachs estimated that Gulf Oil exports recovered to around 23.3 million barrels per day last week, broadly matching their 2025 average. The US also announced that it would offer up to 40 million barrels from its Strategic Petroleum Reserve.
Meanwhile, data released by the US Energy Information Administration (EIA) on Wednesday showed that crude inventories increased by 922,000 barrels last week. The reading was above market expectations for a decline of around 300,000 barrels but considerably smaller than the previous week’s 2.969 million-barrel build.
On the Middle East front, Iran confirmed that it had received Washington’s response to Tehran’s seven-day proposal aimed at reopening the Strait of Hormuz. The initial plan was rejected by US President Donald Trump, while Tehran has signalled that it will not soften its demands, which include lifting the naval blockade of Iranian ports and releasing frozen Iranian assets. Iranian Foreign Minister Abbas Araqchi is expected to review Washington’s response with officials in Tehran.
A deal between Washington and Tehran could remove some of the geopolitical premium from Oil prices. In contrast, a prolonged stalemate could support further gains in WTI.
Technical analysis
On the daily chart, WTI US Oil holds above the 50-day, 100-day and 200-day Simple Moving Averages (SMAs), which together suggest a still constructive underlying trend even after retreating from a brief move above $100 earlier this month.
Momentum is more cautious, with the Relative Strength Index (RSI) hovering near a neutral 48 and the Moving Average Convergence Divergence (MACD) in negative territory, hinting that bullish pressure is losing steam even as price remains supported by the key medium- and long-term averages.
On the topside, initial resistance is seen at the horizontal barrier near $95, followed by a stronger cap at $100. On the downside, immediate support is aligned with the $89.95 area and the 50-day SMA at $87.03, ahead of the 100-day SMA at $84.78 and the 200-day SMA at $81.27. Below these, deeper structural floors emerge at $75 and $70, which would come into play only if selling extends significantly.
(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.
European Central Bank (ECB) President Christine Lagarde said that France’s debt situation is “serious at 120% of GDP and without a path to lowering it.”
In an interview with La Croix newspaper released Wednesday, Lagarde added that the European financial system is more solid than in the 2008 and 2011 crises and said “France needs a credible budget trajectory and reforms to restore confidence.”
Key highlights:
Tells La Croix newspaper that France's debt situation is serious at 120% of GDP and without a path to lowering
Tells La Croix newspaper the European financial system is more SOLID now than in the 2008 and 2011 crises
Tells La Croix newspaper, France needs a credible budget trajectory and reforms to restore confidence
Asked by La Croix newspaper if she would be a French presidential candidate, says, 'that would not be a good idea at all'
Tells La Croix if I leave ECB early, "It will only be by a few months
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.02% | -0.26% | 0.02% | 0.19% | 0.49% | 0.09% | 0.11% | |
| EUR | -0.02% | -0.25% | -0.04% | 0.17% | 0.46% | 0.07% | 0.09% | |
| GBP | 0.26% | 0.25% | 0.23% | 0.44% | 0.72% | 0.35% | 0.37% | |
| JPY | -0.02% | 0.04% | -0.23% | 0.18% | 0.50% | 0.07% | 0.13% | |
| CAD | -0.19% | -0.17% | -0.44% | -0.18% | 0.31% | -0.10% | -0.06% | |
| AUD | -0.49% | -0.46% | -0.72% | -0.50% | -0.31% | -0.40% | -0.36% | |
| NZD | -0.09% | -0.07% | -0.35% | -0.07% | 0.10% | 0.40% | 0.03% | |
| CHF | -0.11% | -0.09% | -0.37% | -0.13% | 0.06% | 0.36% | -0.03% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
ECB FAQs
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
European Central Bank (ECB) Governing Council member Isabel Schnabel said Wednesday that high costs are passed through to consumers more quickly when the economy is resilient.
Schnabel added that the economy may respond more to the recent spike in global yields, which “would dampen price pressures.” This can return inflation to the target more gradually, Schnabel added.
Key highlights:
High costs passed through to consumers more quickly when economy resilient
Robust credit dynamics suggest that financial conditions are not yet restrictive
Possible economy responds more to the recent global yield rise than assumed; would dampen price pressures
Can return inflation to target more gradually when expectations anchored
Euro Price This Month
The table below shows the percentage change of Euro (EUR) against listed major currencies this month. Euro was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 2.49% | 2.18% | -1.51% | 2.64% | 3.13% | 5.02% | 3.33% | |
| EUR | -2.49% | -0.29% | -3.91% | 0.14% | 0.63% | 2.47% | 0.83% | |
| GBP | -2.18% | 0.29% | -3.65% | 0.43% | 0.91% | 2.78% | 1.14% | |
| JPY | 1.51% | 3.91% | 3.65% | 4.20% | 4.71% | 6.57% | 4.99% | |
| CAD | -2.64% | -0.14% | -0.43% | -4.20% | 0.50% | 2.28% | 0.69% | |
| AUD | -3.13% | -0.63% | -0.91% | -4.71% | -0.50% | 1.84% | 0.22% | |
| NZD | -5.02% | -2.47% | -2.78% | -6.57% | -2.28% | -1.84% | -1.61% | |
| CHF | -3.33% | -0.83% | -1.14% | -4.99% | -0.69% | -0.22% | 1.61% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
ECB FAQs
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
- AUD/USD falls 0.41% on Wednesday after fully erasing its initial rebound following the US inflation release.
- Softer-than-expected PCE inflation initially weighed on the US Dollar, but stronger employment and growth data help limit the decline.
- Markets reduce expectations for an October rate hike while shifting bets toward December.
AUD/USD declines 0.41% on Wednesday and trades around 0.6960 at the time of writing, having fully erased its initial rebound following the release of softer-than-expected United States (US) inflation data. The pair comes under renewed selling pressure as the US Dollar (USD) rebounds from its post-data lows.
The US Personal Consumption Expenditures (PCE) Price Index showed that annual headline inflation remained unchanged at 3.4% in August, below the 3.7% expected by markets. July's reading was also revised lower to 3.4% from the previously reported 3.7%.
The core PCE Price Index, which excludes volatile food and energy components and is closely watched by the Federal Reserve (Fed) as a measure of underlying inflation, remained steady at 3% YoY, below the 3.3% market forecast. July's reading was also revised down to 3% from 3.3%. On a monthly basis, headline PCE rose 0.3%, while core PCE increased 0.2%.
The softer inflation figures initially triggered selling pressure on the US Dollar, allowing AUD/USD to rebound immediately after the release. However, the move quickly faded as investors also digested stronger US employment and economic growth figures.
Automatic Data Processing (ADP) reported that private-sector employment increased by 90K jobs in September, exceeding expectations for a 70K rise and accelerating sharply from the revised 36K increase recorded in August.
US economic growth also delivered an upside surprise. Annualized Gross Domestic Product (GDP) growth for the second quarter was revised higher to 2.2%, from the previous estimate of 1.5% and above the 1.5% expected by markets. The revision indicates that economic growth accelerated from the 2.1% pace recorded in the first quarter.
The combination of softer inflation and resilient economic activity is leading markets to reconsider the timing, rather than the prospect, of further monetary tightening. According to the CME FedWatch tool, investors now assign around a 35% chance to a rate increase in October, down from nearly 51% a day earlier and 71% a week ago.
Meanwhile, expectations for a later move remain firm, with the chance of a rate hike in December rising to nearly 60%, from 49.4% a day earlier. The shift in expectations toward December helps the US Dollar recover from its immediate post-PCE decline.
The recovery in the US Dollar puts renewed pressure on AUD/USD, which similarly reverses its initial reaction to the inflation figures and returns to negative territory. Persistent expectations of another Fed rate increase later this year could continue to provide support to the Greenback despite the softer PCE readings.
RBA seen on hold as softer inflation and housing strain curb Aussie tailwinds
Analysts at Commerzbank argue that the latest data reinforce the case for policy patience from the RBA. “One day after the Reserve Bank of Australia’s monetary policy meeting, the CPI figures released today also show why 1.5 additional rate hikes by the RBA - as the market was still expecting yesterday - are likely to be too much.” They acknowledge that “there’s no question that inflation is still too high, and it will take a while before it returns to the middle of the target range,” but stress that “interest rate hikes always take effect with a certain time lag.”
In their view, the lagged impact is particularly evident in the real estate sector, “where building permits fell again in August by 6.1% compared to the previous month and prices in the largest cities continue to decline,” suggesting the central bank “would likely be well advised to wait and see how things develop in the coming months.” Against this backdrop of softer CPI and mounting housing weakness, Commerzbank concludes that “as a result, the AUD is unlikely to receive any further tailwind.”
AUD/USD technical analysis
In the one-hour chart, AUD/USD trades at 0.6956, extending its slide below the 100-period simple moving average (SMA) at 0.7005 and the 200-period SMA at 0.7051, which keeps the near-term bias bearish. The Relative Strength Index (14) around 35 suggests lingering downside pressure, though not yet in outright oversold territory, as the pair consolidates just above the 0.6950 structural floor.
On the topside, initial resistance emerges at 0.6980, followed by the 0.7005 horizontal barrier coinciding with the 100-period SMA, while higher caps are seen at 0.7045, 0.7075, 0.7105 and 0.7140. On the downside, the only nearby support is the horizontal level at 0.6950, and a clear break beneath this floor would open the door to an extension of the hourly downtrend.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
- Silver remains under pressure as hawkish Fed expectations outweigh softer US inflation data.
- Technically, XAG/USD holds below the 50-day, 100-day and 200-day SMAs.
- Momentum remains bearish, with the $60 level offering initial support.
Silver (XAG/USD) trades under pressure on Wednesday even as traders reduce bets that the Federal Reserve (Fed) will raise interest rates again in October following softer-than-expected US PCE inflation data. At the time of writing, the metal trades around $60.38 and is set to close September with a loss of nearly 9%.
The white metal briefly strengthened after the inflation data pushed the US Dollar and Treasury yields lower. However, the move proved short-lived as stronger Gross Domestic Product (GDP) and ADP employment figures showed that the US economy remains resilient. The data keeps expectations alive that the Fed could still raise rates later this year as policymakers remain committed to bringing inflation back to the central bank’s 2% target.
These hawkish Fed expectations keep the US Dollar and Treasury yields supported, weighing on non-yielding assets such as Silver, which tend to perform better when borrowing costs are low. Attention now turns to the US ISM Manufacturing PMI on Thursday and the Nonfarm Payrolls report on Friday for fresh clues about the Fed’s policy path.
Technical analysis
On the daily chart, XAG/USD maintains a bearish near-term bias as it holds well below the 50-day, 100-day and 200-day Simple Moving Averages (SMAs).
Momentum reinforces this pressured tone, with the Relative Strength Index (RSI) slipping toward the lower 40s and Moving Average Convergence Divergence (MACD) remaining below zero with a negative reading, while the subdued Average Directional Index (ADX) around 13 suggests a weak but persistent downtrend.
On the downside, initial support emerges at the horizontal level near $60, ahead of a deeper floor at $55 and the more distant $50 zone. On the topside, any recovery would first need to challenge resistance at the 50-day SMA around $63, followed by the 100-day SMA at $65, while the 200-day SMA near $73 remains a broader bearish barrier capping the medium-term outlook.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
- GBP/USD climbs as softer PCE flips October odds toward hold.
- UK growth beats forecasts, supporting Sterling's recovery.
- ADP strength and resilient GDP keep Fed outlook data-dependent.
The Pound Sterling (GBP) posts solid gains versus the US Dollar (USD) on Wednesday, edging up 0.42% as the latest US inflation figures were below estimates, reaffirming New York Federal Reserve (Fed) President John Williams' comments that the Fed is in no rush to tighten monetary policy. This, along with solid growth figures in the UK, boosted GBP/USD to current spot prices near 1.3280.
Sterling rallies as cooler US inflation collides with stronger UK growth
On Tuesday, several Fed officials crossed the wires, with St. Louis Fed Alberto Musalem, Chicago Fed Austan Goolsbee, and Fed Governor Michael Barr delivering hawkish remarks ahead of the Core Personal Consumption Expenditures (PCE) Price Index release, which came in below estimates and caught investors off guard, after they had priced in a Fed October hike.
US core figures in August came in at 3% YoY, below estimates of 3.3% and were unchanged from July’s print. Headline PCE stood at 3.4% YoY, unchanged from the previous number and also below forecasts for a 3.7% jump.
Other data showed that the US economy grew 2.2% in the final reading for the second quarter of 2026, exceeding forecasts of 1.5%, while ADP jobs data showed private companies hired over 90K people in September, above the 70K forecast, indicating a solid labor market.
Against this backdrop, money markets shifted from expecting a rate hike to a hold for the October 28 meeting. The odds stand at 66% for a hold and nearly 34% for a rate hike, according to Prime Terminal.
The Greenback fell after the data, and the US Dollar Index (DXY), which tracks the buck’s performance versus six currencies, is down 0.08% to 101.29.
In the UK, the Office for National Statistics (ONS) reported that GDP improved to 0.5% QoQ in Q2, up from the expected 0.4%, following 0.4% growth in Q1. Although the news provides some relief for Pound buyers, traders' focus is on fiscal policy as they await Prime Minister Andy Burnham's Autumn Budget, as well as his openness to a potential “rejoin” of the European Union.
Money markets are pricing in near 33 basis points of tightening from the Bank of England towards the end of 2026 and more than 100 basis points by the end of the next year,
GBP/USD Price Forecast: Technical outlook
In the daily chart, GBP/USD trades at 1.3278, extending a bearish tone as the pair holds below the cluster of longer-term simple moving averages (SMAs) grouped around 1.3457 and under multiple broken trend-line levels now acting as overhead supply. The Relative Strength Index (14) at 36.5 hovers just above oversold territory, hinting that downside momentum remains in place but is no longer as aggressive as in prior sessions.
On the topside, initial resistance emerges at the downward trend-line break near 1.3318, with the more significant cap formed by the confluence of a resistance trend line around 1.3437 and the triple SMA cluster near 1.3457. Above that, the former upward support trend lines, now turned resistance at approximately 1.3536 and 1.3738, delineate the next barriers for any corrective bounce, while the absence of clearly defined nearby supports below the market leaves the pair vulnerable to further declines until a new base is established.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound Sterling Price This Month
The table below shows the percentage change of British Pound (GBP) against listed major currencies this month. British Pound was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 2.29% | 2.05% | -1.62% | 2.47% | 2.98% | 4.78% | 3.26% | |
| EUR | -2.29% | -0.22% | -3.84% | 0.16% | 0.68% | 2.43% | 0.94% | |
| GBP | -2.05% | 0.22% | -3.63% | 0.38% | 0.90% | 2.67% | 1.19% | |
| JPY | 1.62% | 3.84% | 3.63% | 4.14% | 4.68% | 6.44% | 5.02% | |
| CAD | -2.47% | -0.16% | -0.38% | -4.14% | 0.52% | 2.21% | 0.78% | |
| AUD | -2.98% | -0.68% | -0.90% | -4.68% | -0.52% | 1.74% | 0.29% | |
| NZD | -4.78% | -2.43% | -2.67% | -6.44% | -2.21% | -1.74% | -1.46% | |
| CHF | -3.26% | -0.94% | -1.19% | -5.02% | -0.78% | -0.29% | 1.46% |
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 British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
- Gold retreats after briefly rising above $4,200 following softer US inflation data.
- Softer PCE data and less hawkish Fed remarks reduce expectations of an October rate hike.
- The technical outlook remains bearish as XAU/USD trades below its key daily moving averages.
Gold (XAU/USD) reverses its earlier gains on Wednesday after briefly climbing above $4,200 in reaction to softer-than-expected US Personal Consumption Expenditures (PCE) inflation data. The initial move fades as the US Dollar (USD) trims its losses and US Treasury yields resume their advance. At the time of writing, XAU/USD trades around $4,166, although it remains above the seven-week low of $4,110 touched on Monday.
Data released by the US Bureau of Economic Analysis (BEA) showed that the core PCE Price Index rose 0.2% MoM in August, below the 0.3% forecast but above July’s 0.1% increase. Headline PCE inflation climbed 0.3% MoM, also below the 0.4% expected and up from 0.1% previously. On an annual basis, core and headline inflation held steady at 3.0% and 3.4%, respectively, both below market expectations.
However, stronger growth and employment figures overshadow the softer inflation readings. The US economy expanded at an annualized rate of 2.2% in the second quarter, above the 1.5% forecast and previous estimate. Meanwhile, ADP Employment Change rose by 90K in September, beating expectations of 70K and accelerating from 36K previously.
The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 101.27 after rebounding from 101.03. The benchmark 10-year US Treasury yield climbs back to around 5.27%, near the previous day’s peak of 5.29%, its highest level since 2007.
The data points to continued resilience in the US economy, giving the Federal Reserve (Fed) room to keep interest rates elevated as it works to bring inflation back to its 2% target. Still, the softer inflation figures reduce the likelihood of an immediate rate increase. Markets now see around a 37% chance of an October hike, down from 70% earlier this week, according to the CME FedWatch Tool.
Less hawkish remarks from New York Fed President John Williams on Tuesday also encouraged traders to scale back expectations of a rate increase as soon as next month.
“With the policy action we took at our September meeting, there is no need for urgency,” Williams said. He added that “if the economy evolves in a manner broadly consistent with my forecast, one further upward adjustment of the federal funds target range may be appropriate late this year to support a timelier return of inflation to target.”
The median projection released after the September meeting placed the policy rate at 4.1% for 2026, suggesting that officials still expect to raise rates once more this year. The prospect of further tightening remains a key headwind for Gold, leaving the metal on track to end September in negative territory.
Energy-driven inflation risks could ease as Middle East crude supplies show signs of recovery. Reuters reported that Saudi Arabia resumed tanker loadings at Yanbu after restarting its East-West pipeline, while Goldman Sachs estimated that Gulf Oil exports returned to their 2025 average over the past week. The US also announced that it would offer up to 40 million barrels from its Strategic Petroleum Reserve.
Attention now turns to Friday’s US Nonfarm Payrolls (NFP) report for further clues about the strength of the labour market and the Fed’s policy path.
Technical Analysis: XAU/USD remains vulnerable while below major SMAs
On the daily chart, XAU/USD keeps a bearish near-term bias as spot holds beneath the 50-day, 100-day and 200-day Simple Moving Averages (SMAs) clustered between roughly $4,287 and $4,538. The relative strength index (RSI) at 39 sits below its midline, while the Moving Average Convergence Divergence (MACD) indicator remains in negative territory, both hinting that downside momentum still outweighs recovery attempts despite the recent stabilization off the $4,100 region.
On the topside, initial resistance emerges at the 100-day SMA at $4,287, followed by the 50-day SMA at $4,322, with the broader bearish structure reinforced by the 200-day SMA near $4,538 and a horizontal barrier at $4,700. On the downside, immediate support is seen at the horizontal level of $4,100, ahead of a deeper floor around $4,000, where a break would open the way for an extension of the prevailing corrective phase.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Societe Generale analysts note China has unveiled targeted support measures, including a 25bp cut to the PBoC’s PSL rate and expanded relending quotas for innovation, technology, agriculture and small businesses. Mortgage subsidies for first‑time buyers of smaller homes were introduced, but these drip‑feed steps failed to excite equities.
Policy easing meets muted market reaction
"In Asia, China unveiled a fresh round of targeted support measures aimed at bolstering growth and stabilising key sectors including property, infrastructure and technology."
"The PBoC lowered the rate on its pledged supplementary lending facility by 25bp, dropping the one-year PSL rate to 1.50% from 1.75%."
"It also expanded relending quotas by CNY200bn for innovation and technology sectors and by CNY500bn for agriculture and small businesses."
"On the housing front, authorities introduced mortgage subsidies of up to five years for first-time buyers of smaller, lower-cost homes."
"Overall, these drip feed measures failed to excite equity markets as they fell well short of the broader measures announced back in September 2024."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
TD Securities' Macro Research team expects the European Central Bank (ECB) to continue a measured tightening cycle, delivering a final 25bp hike in December and taking the deposit rate to 2.75%, which they see as mildly restrictive. They maintain a bullish EUR/USD year-end forecast, arguing that current market pricing overstates future tightening and that policymakers may soon push back against expectations.
TD sees final ECB hike in December
"We expect the ECB to deliver a final 25bp hike in December, taking the deposit rate to 2.75%, as resilient growth and persistent inflation pressures keep policymakers focused on returning rates to mildly restrictive territory."
"We maintain a bullish EURUSD year-end forecast and recently expressed the view via 3m risk reversal to fade the broad-based USD rally."
"OIS markets are currently pricing around 31bp of ECB tightening by end-2026 and close to 100bp cumulatively by end-2027, taking the terminal rate to nearly 3.5%, well above the 2.5% neutral rate referenced by several ECB policymakers."
"Neither we nor the broader consensus expect the ECB, or other major central banks, to validate the full extent of current market pricing."
"In our view, underlying economic data and inflation indicators remain broadly consistent with a measured tightening cycle aimed at moving policy into mildly restrictive territory."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- USD/JPY falls 0.30% on Wednesday as softer-than-expected US inflation weighs on the US Dollar.
- Core PCE inflation remains at 3% in August, below the 3.3% forecast, while private-sector employment rises more than expected.
- Markets scale back bets on an October Fed rate hike but increase expectations for a move in December.
USD/JPY falls 0.30% on Wednesday and trades around 156.80 at the time of writing, as the US Dollar (USD) comes under selling pressure following softer-than-expected United States (US) inflation data. The pair remains on the back foot as investors reassess the timing of a potential further tightening by the Federal Reserve (Fed).
The US Personal Consumption Expenditures (PCE) Price Index showed that annual headline inflation remained unchanged at 3.4% in August, below the 3.7% expected by markets. July's reading was also revised lower to 3.4% from the previously reported 3.7%.
The core PCE Price Index, which excludes volatile food and energy components and is closely watched by the Fed as a measure of underlying inflation, remained steady at 3% YoY, below the 3.3% market forecast. July's reading was also revised down to 3% from 3.3%. On a monthly basis, headline PCE rose 0.3%, while core PCE increased 0.2%.
The softer inflation figures add to stronger US economic data. Automatic Data Processing (ADP) reported that private-sector employment increased by 90K jobs in September, exceeding expectations for a 70K rise and accelerating sharply from the 36K increase recorded in August after revision.
US economic growth also delivered an upside surprise. Annualized Gross Domestic Product (GDP) growth for the second quarter was revised higher to 2.2%, from the previous estimate of 1.5% and above the 1.5% expected. The revision means that economic growth accelerated from the 2.1% pace recorded in the first quarter, reversing the slowdown indicated by the previous estimate.
The softer inflation readings prompt markets to reconsider the timing of the Fed's next rate hike. According to the CME FedWatch tool, investors now assign around a 35% chance to a rate increase in October, down from nearly 51% a day earlier and 71% a week ago.
This repricing weighs on the US Dollar and adds downward pressure on USD/JPY. The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, falls 0.21% on Wednesday to trade around 101.20, after touching an intraday low of 101.03 immediately following the PCE release.
However, markets are not abandoning expectations for further monetary tightening. Instead, investors appear to be shifting the expected timing of the Fed's next move toward the end of the year. The chance of a rate hike in December rises to nearly 60%, from 49.4% a day earlier. Persistent expectations of another Fed rate increase could therefore provide some support to the US Dollar and limit the downside in USD/JPY.
USD/JPY technical analysis
In the one-hour chart, USD/JPY trades at 156.84, retaining a bearish near-term bias as it holds below both the 100-period simple moving average (SMA) at 157.59 and the 200-period SMA at 157.58. The pair is retreating from recent highs, and the Relative Strength Index (14) around 42 suggests fading bullish momentum but not outright oversold conditions, hinting that sellers still have the upper hand while any rebounds would likely be capped by the clustered moving-average resistance overhead.
On the topside, immediate resistance is located at the 200-period SMA at 157.58, followed closely by the 100-period SMA at 157.59, creating a dense supply zone before the horizontal barrier at 158.00 and a stronger cap near 159.00. On the downside, initial support emerges at 156.50, with a deeper floor at 155.50, and a clear break under these levels would open the door to a more pronounced downside extension in the coming hours.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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