Forex News
Societe Generale's strategists note that the INR has rallied further, with USD/INR looking to break below the 95 handle as the RBI intensifies its FX defense. The central bank extended FX curbs to GIFT City and broadened use of risk reserves. While these actions may offer short-term INR relief, foreign portfolio outflows and a challenging backdrop limit sustained appreciation, with key support at 94.30/94.15.
RBI intervention meets FPI outflows
"In Asia, the INR rallied further with USD/INR looking to erase 95 handle after the RBI further stepped up its FX defense by backing up its regulatory measures with currency market intervention."
"The RBI late evening yesterday announced extended FX curbs to GIFT City and broadened use of risk reserve."
"Proactive intervention coupled with these measures may provide a short-term relief to the INR but the broader picture remains challenging and FPI outflows stand in the way of more sustained appreciation."
"Technically, the pair has key support around the lower limit of its multi-month range at 94.30/94.15."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
OCBC strategists Sim Moh Siong and Christopher Wong argue the US Dollar (USD) remains supported by higher Oil prices, firm US yields and resilient Federal Reserve (Fed) expectations, but not yet breaking out of its recent range. They note markets are focused on energy, US inflation and earnings, with a decisive USD move likely requiring a meaningful upside surprise in core CPI. The base case is for a supported but range-bound USD.
Dollar support tied to core CPI
"Our base case remains that the USD should stay well supported. That said, risk-sensitive currencies and EM carry trades could see a period of relief if energy prices stabilise and geopolitical tensions fade. However, we do not believe the conditions are yet in place for a decisive USD breakout from its recent range."
"Markets currently expect the Fed to remain on hold in October before delivering a fully priced 25bp rate hike in December. The key question for the USD is whether upcoming CPI data can alter that sequencing by bringing forward expectations for further tightening. Consensus forecasts point to firmer headline inflation due to higher energy costs, but core inflation is expected to remain relatively contained."
"If core inflation moderates as expected, markets could further trim expectations for additional Fed tightening, limiting the scope for further USD gains. In our view, it would likely take a core CPI print of 0.4% m/m or higher to materially shift market pricing and strengthen the case for earlier Fed action. Until then, the USD is likely to remain supported but not break decisively higher."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
ING’s Francesco Pesole writes that EUR/USD is moderately undervalued versus short-term fundamentals, reflecting a persistent France-related risk premium that could widen if French bonds sell off further. He sees a challenging backdrop for Euro bulls, expects a possible test of 1.110, and notes that ING has revised its EUR/USD forecast down to 1.13 for the fourth quarter of 2026 and first quarter of 2027.
France risk and weaker euro outlook
"EUR/USD is around 1.5% undervalued relative to short-term fundamentals. This suggests a moderate build-up in France-related risk may be becoming entrenched in the euro, but also that the risk premium could expand further if French bonds continue to lose value."
"For now, that’s not our baseline. While it’s early to call for a retightening of the OAT-Bund 10yr gap, expectations that this year's budget can be passed via decree may help contain the spread below 150-160bp."
"It’s hardly a welcoming environment for EUR bulls, though. Beyond several ECB appearances, including Lagarde's, there are few other domestic drivers for the euro this week."
"Markets are already fully priced for a December hike, leaving limited scope for additional hawkish support, while an October move still looks unlikely."
"A test of 1.110 remains the risk for EUR/USD, even if we expect some stabilisation today. We have revised our EUR/USD forecast lower to 1.13 for 4Q26 and 1Q27."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Commerzbank’s Volkmar Baur explains that the Reserve Bank of Australia is increasingly focused on high inflation, with trimmed-mean inflation above its 2–3% target band for over a year. He highlights concerns about global and domestic cost pressures, imported inflation via a weaker AUD, and outlines conditions under which further RBA tightening could occur.
RBA stance and AUD implications
"The minutes released early this morning nevertheless make clear just how strongly the RBA’s focus has shifted towards inflation. The central bank is concerned about price pressures for several reasons. First, there are global developments over which it has no control but to which it nevertheless has to respond."
"Another argument was particularly interesting from an FX perspective. The RBA expressed concern that a weaker AUD could contribute to elevated price pressures through imported inflation. In this context, it also noted that a rise in the global neutral interest rate could cause the AUD to depreciate if Australia’s neutral rate had not increased by a similar amount, although the RBA appeared to assume that it had."
"Looking ahead, three factors are therefore likely to be crucial for the RBA. First, what other central banks do. If they raise rates more aggressively than expected, the RBA could feel compelled to tighten further as well to prevent an excessive depreciation of the AUD. Second, developments in energy prices will be important. And third, as far as the domestic economy is concerned, the focus will clearly be on inflation and inflation expectations rather than economic growth."
"We do not expect either the ECB or the Fed to raise rates at their meetings at the end of the month, and therefore do not expect another rate hike from the RBA in early November either. A further move in December cannot be ruled out, however, if energy markets have not eased by then and inflation fails to show initial signs of improvement."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- Gold consolidates gains as a pullback in the US Dollar and Treasury yields offers support.
- The metal struggles to extend its recovery as Fed interest rate hike expectations remain a headwind.
- Traders await Wednesday’s US CPI report for fresh clues on the interest rate outlook.
Gold (XAU/USD) extends its sideways price action heading into American trading hours on Tuesday. A pullback in US Treasury yields drags the US Dollar (USD) away from recent highs, helping the metal hold its ground. At the time of writing, XAU/USD trades around $4,183, up 0.28% on the day.
The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 102.25 after reaching 102.61 on Monday, its highest since April 2025.
Meanwhile, Treasury yields are declining across the curve as short covering and demand for government bonds pick up after a sell-off in AI-related stocks. The benchmark 10-year yield slips below 5.20%, retreating from last week’s peak of 5.36%, its highest since 2002.
However, Gold lacks strong upward momentum and remains capped below the $4,200 mark as the broader fundamental backdrop keeps buyers cautious. Further declines in the US Dollar and Treasury yields could remain limited as energy-driven inflation risks linked to Middle East tensions reinforce expectations that the Federal Reserve (Fed) may need to keep interest rates higher for longer.
Cleveland Fed President Beth Hammack said on Monday that she prefers smaller interest-rate adjustments but wants the Fed to act “relatively quickly.” Hammack added that trend inflation is in the “mid-to-high 2% range” and expects it will take time to return to the central bank’s 2% target despite appropriate monetary policy.
Energy prices remain volatile at elevated levels, with no sign of a breakthrough in diplomatic efforts to reach a US-Iran agreement on reopening the Strait of Hormuz. Escalating fighting between Saudi Arabia and Yemen’s Houthis adds to concerns over regional security and energy supplies.
Geopolitical tensions and inflation risks would normally support Gold. However, elevated borrowing costs encourage investors to favour interest-bearing assets. Traders now look ahead to the US Consumer Price Index (CPI) report, due on Wednesday, for fresh clues on the interest-rate path.
Analysts at MUFG/BTMU highlight that “the recent run of softer US data (PCE deflator report for August and NFP report for September) alongside cautious comments over the need for another back-to-back hike from the Fed’s leadership have dampened expectations for another rate hike as soon as this month.” They note that “market expectations for the Fed to stay on hold this month will be tested by the release on Wednesday of the latest US CPI report for September,” which is seen as the key near-term catalyst for rate pricing.
MUFG/BTMU add that “unless there is a significant upside surprise for underlying inflation, we expect the Fed to leave rates on hold this month,” while stressing that “it is likely to be only a temporary pause as the Fed currently plans to hike rates again before the end of this year in December.”
Technical analysis: XAU/USD consolidates below key moving averages
On the daily chart, XAU/USD maintains a pattern of lower highs and lower lows since peaking near $4,700 in late August and subsequently slipping back below its key Simple Moving Averages (SMAs). The broader structure remains bearish, although selling pressure shows signs of easing.
The Relative Strength Index (RSI) near 45 hints at subdued downside pressure, whereas the Moving Average Convergence Divergence (MACD) is turning slightly positive, though the overhead moving averages remain barriers to a stronger recovery.
On the topside, initial resistance lies at the 100-day SMA near $4,252, followed by the 50-day SMA around $4,339. A stronger barrier stands at $4,450, ahead of the 200-day SMA near $4,527.
On the downside, initial support emerges at $4,100. A break below this level could expose the $4,000-$3,950 zone, while holding above this floor would allow Gold to consolidate within the current bearish framework.
(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.
United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note USD/JPY continues to grind higher as wide US‑Japan yield differentials weigh on the Japanese Yen (JPY). Intraday, the pair is expected to hold within 158.20–158.80. Over the next 1–3 weeks, upward momentum is starting to build, with scope for an advance toward 159.05, provided the pair holds above strong support at 157.85.
Dollar-Yen bias tilts higher near recent highs
"24-HOUR VIEW: When USD was at 158.25 in the early Asian session yesterday, we noted that “the underlying has firmed somewhat.” We indicated that USD “could trade in a higher range of 157.90/158.55.” We did not expect USD to rise to a high of 158.75. Despite the relatively sharp rise, upward momentum has not strengthened much. Today, USD is likely to trade within a range of 158.20/158.80."
1-3 WEEKS VIEW: Tracking our range-trading view in USD since early this month, we highlighted last Friday (09 Oct, spot at 158.05) that “we continue to expect USD to trade in a range, but a narrower 157.00/158.70 range is likely to contain price movements for now.” Yesterday, USD rose to a high of 158.75. Upward momentum is starting to build, and from here, USD could edge higher toward 159.05. USD must break clearly above this level before further sustained rise is likely. To sustain the momentum build-up, USD must hold above the ‘strong support’ level, now at 157.85"
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- US private employers added an average of 24.75K jobs per week in late September.
- The recent hiring improvement seems to have lost some momentum.
Private-sector hiring in the US has gained some pace in late September. According to the NER Pulse, the weekly companion to the ADP National Employment Report, companies added an average of 24.75K jobs per week in the four weeks ending September 26.
That marks a slight drop from the prior reading (25.25K), showing extra recovery in hiring.
Market reaction
The Greenback trades on the defensive on Tuesday, returning to the low 102.00s when gauged by the US Dollar Index (DXY). The move lower in the US Dollar comes in tandem with declining US Treasury yields across the curve, lower crude Oil prices and somewhat cooling tensions in the Middle East.
Employment FAQs
Labor market conditions are a key element to assess the health of an economy and thus a key driver for currency valuation. High employment, or low unemployment, has positive implications for consumer spending and thus economic growth, boosting the value of the local currency. Moreover, a very tight labor market – a situation in which there is a shortage of workers to fill open positions – can also have implications on inflation levels and thus monetary policy as low labor supply and high demand leads to higher wages.
The pace at which salaries are growing in an economy is key for policymakers. High wage growth means that households have more money to spend, usually leading to price increases in consumer goods. In contrast to more volatile sources of inflation such as energy prices, wage growth is seen as a key component of underlying and persisting inflation as salary increases are unlikely to be undone. Central banks around the world pay close attention to wage growth data when deciding on monetary policy.
The weight that each central bank assigns to labor market conditions depends on its objectives. Some central banks explicitly have mandates related to the labor market beyond controlling inflation levels. The US Federal Reserve (Fed), for example, has the dual mandate of promoting maximum employment and stable prices. Meanwhile, the European Central Bank’s (ECB) sole mandate is to keep inflation under control. Still, and despite whatever mandates they have, labor market conditions are an important factor for policymakers given its significance as a gauge of the health of the economy and their direct relationship to inflation.
Societe Generale’s Commodity Compass, authored by Michael Haigh and Jeremy Sellem, highlights how El Niño 2026-2027 could constrain copper output in the African Copperbelt. With hydropower providing most electricity in the DRC and Zambia, the report warns that drought-driven power shortages and already slowing mine growth may leave Copperbelt production flat at best through H1 2027 before improving later.
El Niño threatens Copperbelt expansion
"El Niño Could Stall Copper Supply Growth in 2027. Major El Niño episodes have consistently coincided with weaker Copperbelt production. Output declined in the DRC in 2016 and in Zambia in 2019 and 2023, while growth stalled in 2015."
"Today, the RONI index is approaching 1997-98 levels, making the current episode one of the strongest on record. We estimate rainfall could fall 30cm below last year while temperatures rise almost +1°C, putting additional pressure on river levels and hydropower generation."
"Consensus expects copper output growth of +200 kt in the DRC and +70 kt in Zambia this year, yet year-to-date trends point to only +90 kt and +20 kt, respectively. With the climate anomaly likely to remain elevated through H1 2027, we believe Copperbelt production growth could be flat at best before conditions begin to improve from Q3 2027 onward."
"Looking into H1 2027, we expect the RONI anomaly to remain above +0.5°C, as observed in both 1998 and 2024. If history is any guide, this would leave copper production flat at best on a year-on-year basis. Conditions should start improving from Q3 2027 onwards as the climate anomaly fades."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- EUR/GBP struggles near its lowest level since June 2025 as French fiscal risks weigh on sentiment.
- The pair remains below its 50-, 100- and 200-day SMAs, reinforcing the bearish outlook.
- Sellers target the 0.8400 psychological mark, although oversold conditions could limit further losses.
EUR/GBP reverses earlier gains on Tuesday as fiscal and political concerns in France limit the Euro’s (EUR) upside, while the technical picture also suggests sellers remain dominant. At the time of writing, the cross trades around 0.8445, near its lowest level since June 2025, after reaching an intraday high of 0.8457.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.28% | -0.29% | -0.32% | -0.30% | -0.27% | -0.46% | -0.32% | |
| EUR | 0.28% | -0.02% | -0.05% | -0.01% | -0.01% | -0.18% | -0.03% | |
| GBP | 0.29% | 0.02% | -0.04% | -0.03% | 0.01% | -0.18% | -0.01% | |
| JPY | 0.32% | 0.05% | 0.04% | 0.02% | 0.04% | -0.16% | 0.01% | |
| CAD | 0.30% | 0.00% | 0.03% | -0.02% | 0.03% | -0.17% | -0.01% | |
| AUD | 0.27% | 0.00% | -0.01% | -0.04% | -0.03% | -0.20% | -0.04% | |
| NZD | 0.46% | 0.18% | 0.18% | 0.16% | 0.17% | 0.20% | 0.17% | |
| CHF | 0.32% | 0.03% | 0.01% | -0.01% | 0.00% | 0.04% | -0.17% |
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).
Pound support builds as EUR/GBP seen anchored in tight range despite UK budget risk
Analysts at ING have turned more constructive on the Pound, noting that they have "lowered our EUR/GBP forecast and now expect the pair to trade in a 0.84-0.85 range for at least several more months." They argue that "idiosyncratic risks surrounding the euro are unlikely to fade anytime soon," while the BoE "has sent a clear enough signal that it is prepared to hike," creating a supportive backdrop for GBP.
At the same time, ING flags the forthcoming "UK budget on 28 October" as "a potential risk for sterling, as markets are pricing in little fiscal concern." Even so, the bank points out that "Chancellor John Healey and Prime Minister Andy Burnham have appeared mindful of market sensitivities," and stresses that "while the budget will be closely scrutinised, we do not currently expect it to trigger significant bond volatility or leave a lasting negative mark on GBP."
Traders look ahead to the UK’s August Gross Domestic Product (GDP) report on Thursday, followed by the final Eurozone inflation reading for September on Friday. These releases, alongside comments from European Central Bank (ECB) and Bank of England (BoE) officials throughout the week, could trigger some price swings over the coming days.
Technical analysis
EUR/GBP has reversed sharply after testing 0.8600 in late September, slipping below the 50-day and 100-day Simple Moving Averages (SMAs). The 200-day SMA sits further overhead, reinforcing the bearish structure.
Momentum remains weak, with the Relative Strength Index (RSI) near 22 signalling deeply oversold conditions, while the Moving Average Convergence Divergence (MACD) remains in negative territory. The Average Directional Index (ADX) around 33 points to a strong prevailing downtrend, although oversold conditions leave room for a short-term recovery.
On the topside, initial resistance appears just above the market at the 0.8450 horizontal level, followed by a stronger barrier at 0.8500. Beyond these, the 50-day SMA at 0.8554 and the 100-day SMA at 0.8572 form a dense technical zone ahead of the 0.8600 horizontal line, with the 200-day SMA at 0.8626 marking a more strategic hurdle. On the downside, a further decline could bring the 0.8400 psychological mark into focus as the next support level.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
MUFG’s Michael Wan analyses recent Reserve Bank of India actions and their impact on the Indian Rupee. He notes that RBI’s new FX and liquidity measures have sharply strengthened spot USD/INR, but also pushed stress into forwards, offshore NDFs and bonds. Wan highlights India’s structural capital inflow imbalance and forecasts USD/INR gradually rising to 97.50 by the September quarter next year.
RBI tools shift pressure across markets
"The key driver for the INR move was yet another round of FX measures by the RBI to curb weakness in the Indian Rupee announced over the weekend."
"The 20% Foreign Exchange Risk Reserve charge on FX derivatives to hedge current account exposures in particular is somewhat akin to similar measures undertaken by China in the past to manage the pace of RMB depreciation."
"Overall, while spot USD/INR went down sharply, the pressure showed up in other areas of the market, including some rise in onshore forward premias reflecting some incorporation of the 20% charge amidst likely lower liquidity, wider INR NDF offshore spreads reflecting a shift in hedging demand and positioning adjustments near-term, coupled with higher INR bond yields with the 10-year rising closer to 7.4% now."
"We are forecasting USD/INR to gradually rise higher to 97.50 by the September quarter next year, with RBI likely to take more measures if INR were to weaken further from here."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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