Forex News
OCBC strategists Sim Moh Siong and Christopher Wong report that the Korean Won (KRW) strengthened alongside gains in tech equities, lower Oil prices and strong export data, including a surge in semiconductor shipments. They note a bearish engulfing pattern and rejection near 1388 in USD/KRW, pointing to near-term downside risk, though patchy foreign equity flows mean sustained buying is still needed for a firmer KRW footing.
Technical rejection signals softer USD/KRW
"KRW strengthened alongside gains in Korean, US tech equities and lower oil prices overnight. Domestic data was also supportive, with exports rising 78.3% YoY in the first 20 days of September, led by a 259% surge in semiconductor shipments."
"Trade surplus widened to USD23bn. But foreign flows remain patchy, with foreign investors turning net sellers of Korean equities again on Monday Asia despite gains in KOSPI."
"Near term, softer oil and slower pace of US Treasury yield increase should remain supportive of KRW, while USD/KRW’s rejection near 1388 and bearish engulfing pattern also point to some downside risk for the pair."
"Foreign equity flows remain key. A more sustained return of foreign buying would give KRW a firmer footing."
"Daily momentum remains bullish while RSI eased lower from overbought conditions. Bearish engulfing candlestick bears watching for any follow-through in downside momentum. Support at 1364 (21 DMA), 1350 levels. Resistance at 1388 levels (23.6% fibo retracement of Jul high to Sep low), 1405 (50 DMA)."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- DXY pushes to its highest since late July on the case for another increase.
- Futures put a Fed rate increase on October 28 at 55.36%.
- Wednesday's flash services PMI is forecast at 56, after 56.5.
The Dollar Index trades near 100.70, its highest level since late July. It has climbed through five straight sessions of falling Crude Oil, the opposite of how the war has moved it for most of this year. The Fed is the reason. It raised rates on September 16, signalled at least one more increase this year, and its officials have spent the days since backing that up.
Cheaper Crude Oil is supposed to cost the Dollar
Japanese news agency Kyodo, citing a senior Iranian official, reported that Iran would let ships back through the Strait of Hormuz inside a week. The conditions are that the United States ends the blockade of Iran's ports and stops its military operations around the strait, and the offer hasn't been independently confirmed. Crude Oil fell on the report, and Brent, the global benchmark, hit its lowest price since September 8.
Crude Oil reaches the Dollar through the Fed. Cheaper Crude Oil means less inflation, which means less reason for the Fed to raise rates again. Fewer increases mean less extra interest for holding Dollars instead of Euros or Yen. The offer went to Washington through mediators on September 16 and moved Crude Oil only once it was reported.
Before the war, about a fifth of the world's Crude Oil and liquefied natural gas went through the strait. Saudi Arabia is also testing a restart of its East-West pipeline, which carries Crude Oil from its Gulf coast to the Red Sea and around the strait. More barrels getting out means a lower price, and a lower price means lower odds of another Fed increase, which is how both stories reach the Dollar Index.
A seven-week high on odds a little better than even
Crude Oil came off its low after Trump used his United Nations speech to put a deal with Iran after the November 3 midterms. The Dollar Index went to its session high after Boston Fed President Collins spoke at 15:00 GMT. She said she supported the September 16 increase and warned that inflation could stay above the Fed's 2% target. The Fed's own projections have it staying there until after 2028.
Prices in the futures market put the chance of an increase on October 28 at 55.36%, against 44.64% for no change. Those odds slipped on the Hormuz report, and the Dollar Index slipped with them. Another increase would widen what Dollars earn over the other currencies in the index. ADP's four-week average of private-sector hiring, the only American data of the session, came in at 20K against 16.75K before it, a small push in the same direction.
The case for October doesn't rest on the barrel. Minneapolis Fed President Kashkari has said inflation is too high across the whole economy rather than only in the price of Crude Oil. Chicago Fed President Goolsbee and St. Louis Fed President Musalem said much the same on Monday. That is why the Hormuz report has moved Crude Oil more than it has moved the Dollar.
The Yen fell for a third session in a row, in thin trading with Tokyo shut for public holidays through Wednesday. That came even though the Bank of Japan (BoJ) raised its rate to 1.25% on September 18. The Yen is part of the Dollar Index, so a weaker Yen means a higher index.
Wednesday's surveys are early estimates, and the odds will move on them anyway
S&P Global's flash purchasing surveys land Wednesday at 13:45 GMT, with services forecast at 56 after 56.5 and manufacturing at 53.5 after 53.9. A Purchasing Managers Index (PMI) above 50 means more firms reported growth than decline, so both are forecast to keep growing a little more slowly. The final versions come out in early October. Stronger flash numbers would add to the same October odds the Dollar Index rose and fell with on Tuesday, and weaker ones would take from them.
Jobless claims on Thursday at 12:30 GMT are forecast at 201K after 196K. Durable goods orders, which count orders for goods meant to last three years or more, follow on Friday at 12:30 GMT and are forecast at -0.4% after 1.1%.
The University of Michigan survey on Friday at 14:00 GMT carries what households expect inflation to be over the coming year, forecast at 4.6%, exactly where it was last time. That makes the week's only inflation reading one that nobody expects to change.
Levels and bias
Resistance: Tuesday's high near 100.70 is the highest since late July. Above it, 101.00, then the late-July highs just above 101.50, the level the Dollar fell from at the end of July.
Support: 100.50, where Friday's run stopped and Tuesday's went through, is the first floor. Below it, Tuesday's low near 100.30, where the dip on the Hormuz report stopped, then the Friday and Monday lows near 100.20.
Bias: Bullish above 100.50. The first objective is 101.00 and the second is the late-July highs just above 101.50. The daily Stochastic Relative Strength Index (Stoch RSI), a momentum gauge, is near 75 and rising, just short of the 80 line that marks a stretched market. The bullish case is wrong on a daily close below 100.20.
DXY daily chart
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact 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 when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
Richmond Federal Reserve (Fed) President Thomas Barkin said on Tuesday that the Federal Open Market Committee (FOMC) decided to raise interest rates last Wednesday because inflation risks outweighed those to maximum employment.
Barkin, who spoke at an event in Baltimore, said, “Last week's rate hike will help restore price stability, we'll see if more hikes are needed,” and remains unsure about further tightening needed by the Fed to tackle inflationary pressures.
Key highlights:
We raised rates last week because risks to inflation outweigh risks to maximum employment
Last week's rate hike will help restore price stability, we'll see if more hikes are needed
It is tempting to blame high inflation on a handful of categories exposed to energy costs or tariffs, but much of the personal consumption expenditures index is rising by more than 3%
Economic conditions are, if anything, firming
There is momentum outside data centers and AI, with consumer spending holding up and strength in defense and manufacturing
Passing shocks like tariffs and energy are not fading, there is a risk that high inflation today will impact future inflation
The labor market is not overheated or even particularly tight
Don't see much evidence that consumer balance sheets are stretched
Consumers will spend as long as the job market remains healthy
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 Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.27% | 0.30% | 0.08% | 0.31% | 0.18% | -0.06% | 0.07% | |
| EUR | -0.27% | 0.03% | -0.16% | 0.05% | -0.08% | -0.33% | -0.18% | |
| GBP | -0.30% | -0.03% | -0.23% | -0.00% | -0.12% | -0.36% | -0.21% | |
| JPY | -0.08% | 0.16% | 0.23% | 0.22% | 0.10% | -0.16% | 0.00% | |
| CAD | -0.31% | -0.05% | 0.00% | -0.22% | -0.12% | -0.37% | -0.21% | |
| AUD | -0.18% | 0.08% | 0.12% | -0.10% | 0.12% | -0.25% | -0.09% | |
| NZD | 0.06% | 0.33% | 0.36% | 0.16% | 0.37% | 0.25% | 0.17% | |
| CHF | -0.07% | 0.18% | 0.21% | -0.01% | 0.21% | 0.09% | -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 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).
- GBP/USD retreats despite reports that Tehran could reopen Hormuz within days.
- Strong ADP data and hawkish Fed rhetoric lift the US Dollar.
- UK borrowing overshoot adds pressure despite November BoE hike bets.
The Pound Sterling (GBP) dives over 0.17% against the US Dollar (USD) on Tuesday amid newswire reports that Tehran intends to reopen the Strait of Hormuz if the United States meets certain conditions. At the time of writing, GBP/USD trades at 1.3343 after peaking at 1.3387.
Sterling slips as Fed tightening bets eclipse Iran de-escalation headlines
Sentiment remains upbeat after Kyodo reported that Tehran told the US administration it would open the Strait of Hormuz in seven days if Washington lifts the blockade on Iran and stops military operations.
Broad US Dollar strength, driven by growing speculation that the Federal Reserve (Fed) would raise rates once more before year-end, continues to underpin the Greenback.
The US Dollar Index (DXY), which measures the performance of the American currency against six others, is up 0.27% at 100.69, about a two-month high.
Data-wise, the ADP Employment Change 4-week average rose from 16.75K to 20K, an indication of strength in the labor market. Aside from this, Fed speakers are crossing the wires.
Boston Fed Susan Collins said in a LinkedIn post that she supported a rate hike last week because inflation could become entrenched above 2%. “With the labor market on a better footing, monetary policy can focus on a timely return to price stability, especially after five and a half years of too-high inflation,” she said.
Regarding geopolitics, US President Donald Trump reiterated that Iran can’t have a nuclear weapon and added that a deal between the US and Iran is possible after the US midterm election in November.
In the UK, Public Sector Net Borrowing in August rose to £18.26 billion, higher than expectations of £15.7 billion, which triggered a jump in the UK deficit to £77.3 billion in the first five months of the fiscal year, £8.1 billion more than the Office for Budget Responsibility forecast.
Speculation that the Bank of England (BoE) would raise rates at the upcoming November meeting is at 65% via Prime Terminal, which has kept the GBP/USD pair from weakening further below the 1.3300 level.
Nevertheless, if the interest rate differential widens between the two countries, favoring the US, it could open the door for further downside.
GBP/USD Price Forecast: Technical outlook
In the daily chart, GBP/USD trades at 1.3324, keeping a clear bearish tone as spot holds below the clustered simple moving averages (SMA) group around 1.3481 and under several broken ascending trend-line levels that now sit overhead. Price is also trading beneath the nearby descending resistance trend line, whose break reference at 1.3335 caps any immediate recovery attempts, while the Relative Strength Index (14) near 31 suggests the sell-off is stretching into oversold territory rather than signaling a sustainable base.
On the topside, initial resistance emerges at the downtrend line break around 1.3335, followed by the secondary descending barrier near 1.3449. Above there, the SMA cluster around 1.3481 aligns with the former rising support trend line turned resistance at 1.3504, before the higher broken support line near 1.3713 marks a more distant cap on any corrective bounce. On the downside, support is primarily momentum-based, with the RSI hovering close to oversold readings, hinting that while selling pressure remains dominant, the pair could soon attempt a modest pause rather than a decisive reversal unless the overhead technical levels are reclaimed.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Euro.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.26% | 0.32% | 0.09% | 0.28% | 0.23% | -0.03% | 0.07% | |
| EUR | -0.26% | 0.06% | -0.13% | 0.03% | -0.03% | -0.28% | -0.18% | |
| GBP | -0.32% | -0.06% | -0.25% | -0.06% | -0.10% | -0.35% | -0.24% | |
| JPY | -0.09% | 0.13% | 0.25% | 0.19% | 0.14% | -0.13% | 0.00% | |
| CAD | -0.28% | -0.03% | 0.06% | -0.19% | -0.04% | -0.29% | -0.18% | |
| AUD | -0.23% | 0.03% | 0.10% | -0.14% | 0.04% | -0.26% | -0.14% | |
| NZD | 0.03% | 0.28% | 0.35% | 0.13% | 0.29% | 0.26% | 0.12% | |
| CHF | -0.07% | 0.18% | 0.24% | -0.00% | 0.18% | 0.14% | -0.12% |
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).
- DJIA drops from its highest level since September 14 as bank shares slide.
- Trump expects an Iran deal right after the November 3 midterm election.
- The Fed's next rate decision is October 28, six days before the midterms.
The Dow Jones Industrial Average (DJIA) rose on Tuesday to its highest level since September 14 before the opening bell, then turned lower once trading started in New York. It trades near 51,800, below Monday's close. The NASDAQ Composite tested record highs and the S&P 500 is barely changed. Money is moving out of financial companies and into technology, and the Dow has more of the first in it and less of the second compared to the other two indexes.
The smaller bank counts for more in the Dow
Financial shares, from banks to brokers and insurers, are falling across the market. Traders are moving the money into technology on growing interest in artificial intelligence (AI) agents, apps that carry out tasks like booking travel. JPMorgan Chase (JPM), the biggest bank in the country, is falling with the rest. JPMorgan's own analysts raised their rating on Meta Platforms (META) earlier in September because of Meta's new agent, and Meta is one of the stocks the money is going into.
The Dow is calculated from share prices alone, so a $1 change in any of its 30 shares moves the index about 6 points, whatever the size of the company. A $10 fall is 1% of a $1,000 share and 10% of a $100 share, and it takes about 60 points off the Dow either way. The S&P 500 and the NASDAQ Composite are weighted by each company's total stock market value instead, so the biggest technology companies count the most there.
Goldman Sachs (GS) shares cost more than $900, among the most expensive in the Dow, and JPMorgan's cost less than $400. JPMorgan is worth more than three times as much, but a 1% fall in Goldman Sachs takes more than twice as many points off the index. Meta isn't in the Dow at all, which is how a day of selling banks and buying technology leaves the Dow lower and the NASDAQ Composite at a record.
Crude Oil keeps falling on a deal dated after the midterms
Crude Oil is down for a fifth session in a row. Brent, the international benchmark, reached its lowest level since September 8 on reports that Iran has offered to reopen the Strait of Hormuz within seven days. The offer depends on the United States lifting its blockade of Iranian ports, and it hasn't been independently confirmed. A cheaper barrel costs Chevron (CVX), the only energy producer in the Dow, and saves the other 29 money on fuel.
Trump told the United Nations General Assembly he must choose between a deal with Iran and wiping out the Islamic Republic. He expects a deal right after the November 3 midterms and said it would push Crude Oil below its prewar price. Crude Oil rose off its low after the speech, and on his timeline, the fall he promised in fuel costs for the other 29 comes after November 3. By his account, Iran is waiting on the result of an American election before it signs.
The Fed decides six days before the midterms
The Fed raised its main reference rate, what banks charge each other to borrow overnight, by a quarter-point to 3.75-4.00% on September 16. It was the first increase since July 2023, and higher fuel prices helped drive it. JPMorgan raised its prime rate, what it charges its most creditworthy borrowers, to 7.00% on September 17, so the increase went straight into what it charges for loans.
Most Fed officials expect at least one more increase before the end of the year, and the next decision is on October 28. Goldman Sachs makes less from lending and more from arranging takeovers and share sales, which are harder to pay for when borrowing costs rise. Another increase would do more for the bank that moves the Dow less.
Levels and bias
Resistance: The index went through the September 17 and Monday highs just above 52,100 before the open and fell back under them once trading started, which makes that area the first cap. Tuesday's high just above 52,400 is the highest since September 14 and the level the rally ended at.
Support: Tuesday's low just under 51,800 matches Monday's low just above 51,750, the second session in a row the index has stopped there. Below that are the September 18 low just under 51,500 and the September 16 low near 51,200, the lowest since June.
Bias: Bearish below 52,100. The first objective is the September 18 low just under 51,500, and the second is the September 16 low near 51,200. The daily Stochastic Relative Strength Index (Stoch RSI), a momentum gauge, is near 22 and has fallen for two weeks without turning up. The bearish view fails on a daily close above 52,200.
Dow Jones daily chart
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
- USD/CAD gains 0.27% on Tuesday and trades around 1.4070.
- Falling Oil prices weigh on the Canadian Dollar despite improving risk appetite.
- Hopes for the reopening of the Strait of Hormuz ease geopolitical concerns.
USD/CAD gains 0.27% on Tuesday and trades around 1.4070 at the time of writing, supported by weakness in the Canadian Dollar (CAD). Falling Oil prices offset the positive impact of improving risk appetite on the Loonie, as fresh prospects for negotiations over the Strait of Hormuz ease geopolitical concerns.
West Texas Intermediate (WTI) US Oil falls 0.46% on Tuesday to around $91.20 at the time of press. The decline acts as a headwind for the Canadian Dollar, as Canada is a major Oil producer and exporter. The relationship between energy prices and the Canadian currency therefore helps keep USD/CAD tilted to the upside.
US President Donald Trump, however, maintains a firm stance toward Tehran. Speaking at the United Nations (UN) General Assembly, he called on countries to maintain pressure on Iran and said Tehran will never obtain a nuclear weapon. He nevertheless expects the United States (US) and Iran to reach an agreement after the US elections.
On the policy side, the National Bank of Canada highlights that domestic conditions argue for patience from the Bank of Canada (BoC), stating that "in Canada, we’ve pulled tightening closer on our expected timeline, but still expect the BoC to be sidelined in October as economic momentum is threatened and slack remains."
In the United States, the US Dollar (USD) also benefits from a relatively supportive monetary policy backdrop. Boston Federal Reserve (Fed) President Susan Collins said on Tuesday that she supported last week's interest-rate hike and views a somewhat more restrictive monetary policy stance as appropriate to bring inflation sustainably back toward the Fed's 2% target.
Collins notes that upside risks to inflation have increased, while labor market conditions appear somewhat stronger. Her comments reinforce the view that the Fed has some room to maintain restrictive monetary policy to contain inflationary pressures, providing additional support to the US Dollar against the Canadian Dollar.
Canadian Dollar Price Today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.27% | 0.30% | 0.08% | 0.28% | 0.27% | 0.02% | 0.07% | |
| EUR | -0.27% | 0.03% | -0.18% | 0.03% | -0.00% | -0.25% | -0.19% | |
| GBP | -0.30% | -0.03% | -0.25% | -0.04% | -0.06% | -0.28% | -0.22% | |
| JPY | -0.08% | 0.18% | 0.25% | 0.20% | 0.20% | -0.07% | 0.01% | |
| CAD | -0.28% | -0.03% | 0.04% | -0.20% | 0.00% | -0.25% | -0.18% | |
| AUD | -0.27% | 0.00% | 0.06% | -0.20% | 0.00% | -0.25% | -0.18% | |
| NZD | -0.02% | 0.25% | 0.28% | 0.07% | 0.25% | 0.25% | 0.08% | |
| CHF | -0.07% | 0.19% | 0.22% | -0.01% | 0.18% | 0.18% | -0.08% |
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 Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).
- Gold recovers from its intraday low as traders react to Iran’s proposal on reopening the Strait of Hormuz.
- Hawkish Federal Reserve expectations continue to cap the metal’s upside.
- Technically, XAU/USD remains trapped between the 50- and 100-day SMAs and the 200-day SMA.
Gold (XAU/USD) consolidates on Tuesday as traders weigh fresh Middle East headlines while the broader geopolitical backdrop remains tense. At the time of writing, XAU/USD trades around $4,328 after rebounding from an intraday low of $4,291 during European trading hours.
Iran has offered to reopen the Strait of Hormuz within seven days if the United States (US) lifts its blockade of Iranian ports and eases military pressure, Kyodo News reported earlier on Tuesday, citing a senior Iranian official. The proposal has reportedly already been conveyed to Washington through mediators.
Following the development, the US Dollar (USD) trims part of its earlier gains, helping Gold recover some ground, while Oil prices extend their decline for a fifth straight day. However, both the Greenback and Oil have recovered somewhat as traders assess remarks from US President Donald Trump at the UN, where he said the US could reach a deal with Iran after the November 3 midterm elections.
The US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, trades around 100.60, just below the intraday high of 100.67, its highest level since July 30. Meanwhile, West Texas Intermediate (WTI) Oil trades near $90 and is still down more than 5% so far this week.
For Gold, however, the main headwind remains the hawkish Federal Reserve (Fed) policy outlook, which could limit a stronger recovery unless the Strait of Hormuz reopens and triggers a meaningful decline in Oil prices and inflation concerns. As a non-yielding asset, Gold tends to struggle when borrowing costs rise.
The Fed raised the federal funds rate by 25 basis points last week to 3.75%-4.00% as policymakers responded to stubborn inflation and elevated energy prices. 16 of 18 officials expect at least one more increase this year.
Analysts at ING note that gold "edged lower at the start of the week as investors assessed the implications of the Fed's first rate hike since 2023 and the prospect of further policy tightening." They highlight that comments from Fed officials have "reinforced concerns that inflation remains elevated," in turn "supporting expectations that rates will stay higher for longer." ING acknowledges that "tighter monetary policy remains a headwind for bullion," but points out that "ETF holdings are sitting at a six-month high, and continued central bank buying should help limit downside."
Technical analysis: XAU/USD steadies above 50-day and 100-day SMAs
On the daily chart, XAU/USD holds above the 50-day and 100-day Simple Moving Averages (SMAs) at $4,301 and $4,316, respectively, while remaining below the 200-day SMA at $4,541. This setup keeps the near-term bias broadly neutral, with Gold caught between nearby trend support and longer-term resistance.
Momentum indicators also point to a range-bound setup. The Relative Strength Index (RSI) at 47 stays close to the neutral 50 mark, while the Moving Average Convergence Divergence (MACD) remains in negative territory. However, the fading red histogram bars suggest bearish momentum is losing strength.
On the downside, the 100-day SMA at $4,316 and the 50-day SMA at $4,301 form a key support zone. A break below this area could expose $4,150 and the psychological $4,000 mark.
On the topside, the 200-day SMA at $4,541 acts as the key resistance, followed by the $4,700 level. A sustained break above these barriers would be needed to strengthen the bullish outlook.
(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.
TD Securities’ Ryan McKay and Bart Melek highlight that elevated speculative positioning leaves Crude Oil vulnerable to shifting headlines around Middle East supply routes. They note reports about Iran potentially opening the Strait and Saudi testing East-West pipeline flows, which are weighing on prices. The authors describe current energy market dynamics as a double-edged sword for both crude and refined products.
Spec positioning heightens headline risk
"Crude is prone to headlines amid elevated spec positions. Headlines are in full force this morning, with reports that Iran would open the Strait within 7 days if their demands are met by the US. These headlines have already been refuted by Iran."
"Further, Saudi are running tests to resume East-West pipeline flows and reportedly notified Asian buyers they will soon be able to pick up from Yanbu."
"All of this is weighing heavy on crude oil prices today, but as always regarding deal making headlines, we remain skeptical until there is actually something concrete."
"The elevated flows through the Strait point to a loss of Iranian leverage, which suggests they could be more open to making a deal than previously, but it also increases the probability of escalation in an attempt to reassert control."
"We continue to see the current state of the energy market as a double-edged sword, as either increased refiner runs ease product market tightness but re-tighten crude, or the crude rally succumbs to increased flows without increased refiner uptake, leaving product markets to continue higher until demand destruction is found."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- USD/JPY trades sideways on Tuesday despite a broadly stronger US Dollar.
- Technically, the pair remains capped below a cluster of key moving averages on the daily chart.
- Momentum has improved, but a clear break above the 158.44-159.53 resistance zone is needed to strengthen the upside.
USD/JPY trades flat on Tuesday as the Japanese Yen (JPY) holds firm in thin holiday trading during Japan’s Silver Week. However, a broadly stronger US Dollar (USD) keeps the Yen’s gains in check. At the time of writing, USD/JPY trades around 157.46.
The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 100.60, near levels last seen in late July, supported by expectations of further Federal Reserve (Fed) interest rate hikes. Traders are also closely watching Middle East developments after remarks from US President Donald Trump at the UN offered little sign that tensions could ease anytime soon.
Yen steadies as BoJ rate check tempers USD/JPY upside
Analysts at MUFG note that the Yen “initially weakened sharply after the BoJ’s latest policy update on Friday,” with USD/JPY “hitting a high of 158.05” before dropping back towards 157.00. They highlight that the trigger for the late-Friday rebound was “reports that the BoJ had conducted a rate check during the New York trading session,” which sent “a clear signal that they are prepared to intervene again if the yen continues to weaken.”
MUFG argues that the “rate check should help to dampen market expectations for how much the yen will be allowed to weaken in the near-term as USD/JPY moves closer to the 160.00-level.” Looking ahead, the bank believes that the BoJ’s “new phase” for monetary policy is “consistent with a rate hike every three months,” although they caution that “the combination of higher energy prices and widening yield spreads is making it more difficult for Japanese policymakers to prevent a weaker yen, and increasing pressure to intervene again to buy more time.”
Technical analysis
From a technical perspective, USD/JPY has recovered most of the sharp decline seen at the start of the month, when the pair fell from near 160 to 153. However, the recovery remains capped by a cluster of key moving averages on the daily chart.
Despite this heavy overhead structure, momentum has improved, with the Relative Strength Index hovering around 52 and the Moving Average Convergence Divergence (MACD) turning positive, which hints at fading downside pressure but not yet at a clear bullish reversal.
On the topside, initial resistance is seen at the 200-day SMA at 158.44, followed by the 50-day SMA at 158.86 and the 100-day SMA at 159.53. The psychological 160 mark acts as the next key barrier. A sustained break above this level could expose 164, near the 40-year high touched in late July.
On the downside, initial support is seen near 155.50, followed by 153. A clear move above the moving-average cluster would be needed to strengthen the bullish outlook.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.24% | 0.23% | 0.03% | 0.23% | 0.21% | -0.03% | 0.03% | |
| EUR | -0.24% | -0.02% | -0.20% | -0.00% | -0.03% | -0.28% | -0.20% | |
| GBP | -0.23% | 0.02% | -0.21% | -0.01% | -0.02% | -0.27% | -0.18% | |
| JPY | -0.03% | 0.20% | 0.21% | 0.19% | 0.18% | -0.10% | 0.02% | |
| CAD | -0.23% | 0.00% | 0.01% | -0.19% | -0.01% | -0.27% | -0.17% | |
| AUD | -0.21% | 0.03% | 0.02% | -0.18% | 0.01% | -0.26% | -0.16% | |
| NZD | 0.03% | 0.28% | 0.27% | 0.10% | 0.27% | 0.26% | 0.10% | |
| CHF | -0.03% | 0.20% | 0.18% | -0.02% | 0.17% | 0.16% | -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 Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
US President Donald Trump said at the UN General Assembly that “we must be united in maintaining pressure on Iran,” adding that he believes that the US and Iran will strike a deal following the US midterm elections in November.
Trump added that more Oil is flowing through the Strait of Hormuz since the war started, that the US should maintain pressure on Iran, and that Tehran “will never have a nuclear weapon.”
Key highlights:
I urge Iran to make a deali urge Iran to make a deal
More oil is flowing than at any point since the war started
We must be united in maintaining pressure on Iran
I have a decision to make on Iran
I believe we'll make deal with Iran right after US election
Iran will never have a nuclear weapon
Calls on all nations to economically isolate Iran
Iran's regime is weak and desperate
Big changes can happen fast
Cuba is a failed state, freedom will be coming to Cuba
US secretary of state rubio is deep into negotiations with Cuba
We will build two major military bases in Greenland
Will sign Greenland agreement later today
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 Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.20% | 0.17% | -0.05% | 0.21% | 0.19% | -0.12% | -0.05% | |
| EUR | -0.20% | -0.04% | -0.23% | 0.02% | -0.01% | -0.31% | -0.24% | |
| GBP | -0.17% | 0.04% | -0.23% | 0.03% | 0.02% | -0.28% | -0.20% | |
| JPY | 0.05% | 0.23% | 0.23% | 0.27% | 0.25% | -0.08% | 0.02% | |
| CAD | -0.21% | -0.02% | -0.03% | -0.27% | -0.01% | -0.32% | -0.24% | |
| AUD | -0.19% | 0.00% | -0.02% | -0.25% | 0.01% | -0.31% | -0.22% | |
| NZD | 0.12% | 0.31% | 0.28% | 0.08% | 0.32% | 0.31% | 0.09% | |
| CHF | 0.05% | 0.24% | 0.20% | -0.02% | 0.24% | 0.22% | -0.09% |
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).
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
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