Forex News
Commerzbank’s Charlie Lay reports the Bank of Korea has delivered back-to-back 25bp hikes to 3.0%, front-loading tightening as growth and core inflation forecasts rise. The bank signals one more hike over six months but may pause to assess effects. Despite strong fundamentals and a huge current-account surplus, further KRW gains versus USD are expected to be more gradual after a 12% rally.
Front-loaded tightening and slower KRW gains
"Looking ahead, BoK maintained a tightening bias, but the pace of further hikes is likely to slow after the cumulative 50bp increase since July."
"BoK provided some forward guidance, by way of its new six-month rate projections, with the median forecast at 3.25%, implying one additional 25bp hike over the next six months."
"BoK is expected to pause in October and possibly November as it assesses the impact of the recent tightening."
"However, given the magnitude of the recent appreciation, further gains are likely to be more gradual and we could see consolidation for USD/KRW in the near term around 1,360-1,400."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
DBS Group Research economists Radhika Rao and Chua Han Teng note that Bangko Sentral ng Pilipinas (BSP) raised its policy rate by 25 bps to 5.0% to anchor inflation expectations and support the Peso. Philippine Peso (PHP) is the only ASEAN-6 currency weaker in 3Q26 versus the Dollar, and DBS flags above-target inflation as leaving room for one more measured BSP hike this year.
Peso underperforms peers in 3Q26
"The Philippines’ BSP hiked its benchmark rate by 25bps to 5.0% yesterday, in line with our expectations, in a bid to contain inflation expectations and support the currency."
"The peso is the only ASEAN-6 currency to have underperformed so far in 3Q26 (-0.8% vs the USD), while the others have appreciated by 0.9-1.7% over the same period."
"Our baseline view is that ASEAN-6 central banks will remain on hold through the rest of 2026, with the Philippines as the sole exception. Above-target inflation leaves open the possibility of one final, measured BSP rate hike."
"Such developments could bring BI and the BSP back into the tightening conversation first, while other central banks would respond more gradually."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
ING’s Chris Turner reports that the Korean Won (KRW) continues to advance, driven by back-to-back Bank of Korea (BoK) rate hikes to 3.00% and a Dot Plot pointing to 3.25% in six months. Upgraded Gross Domestic Product (GDP) forecasts linked to a chip export boom underpin the currency, though authorities may worry about KRW/JPY highs and USD/KRW looks due for consolidation.
BoK tightening and export-led growth
"The Korean won continues its advance. The driver this week has been back-to-back rate hikes from the Bank of Korea, with the policy rate now a reasonably high 3.00%. The Bank of Korea has its own, Fed-like, Dot Plot."
"The median expectation is for the policy rate to reach 3.25% in six months' time. The good news is that rate hikes are not only being driven by above-target inflation, but by broadening and strengthening growth prospects. GDP forecasts have been revised substantially higher for 2026 and 2027 as the chip export boom filters across large parts of the economy."
"However, KRW/JPY has quickly returned to the highs seen in 2023/24. This might be a problem for Korean authorities fearful of Japanese competition in third markets. Yet having suffered such a weak won for so long, we suspect local authorities will be prepared to tolerate current strength."
"There is an outside risk to 1350, but USD/KRW has come a long way in a short space of time and is probably due some consolidation."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
DBS Group strategists Taimur Baig and Nathan Chow expect Bank Negara Malaysia (BNM) to keep its Overnight Policy Rate unchanged at 2.75% on September 3, maintaining the stance adopted after its July 2025 insurance cut. They highlight contained Malaysian inflation and robust 2026 growth near 5%, arguing there is little urgency for rate hikes despite some market expectations.
BNM expected to stay on hold
"We expect BNM to maintain its Overnight Policy Rate (OPR) at 2.75% on September 3, unchanged since its 25bps insurance rate cut in July 2025."
"The central bank will likely continue assessing that the current monetary policy stance remains conducive to supporting economic growth amid ongoing price stability."
"As a result, overall growth could be around 5% in 2026."
"While some market participants expect BNM to reverse its previous insurance easing with a rate hike over the next couple of meetings, we see little urgency for the central bank to do so."
"Malaysia’s headline inflation has remained contained despite the Middle East shock, easing to 1.8% yoy in July 2026, the lowest since March, and within policymakers’ 2026 average forecast of 1.5-2.5%."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- USD/MXN reclaims 17.00 as Warsh fuels US Dollar rebound.
- Hawkish Fed tone sharply lifts year-end rate-hike expectations.
- Mexico jobless rate holds steady while trade surplus narrows.
The Mexican Peso (MXN) depreciates against the US Dollar (USD) on Friday, down by over 0.42% on hawkish remarks by Federal Reserve (Fed) Chair Kevin Warsh at the Jackson Hole Symposium. This prompted investors to price in a potential rate hike in 2026, a tailwind for the Greenback. The USD/MXN pair trades at 17.04, after bouncing off daily lows of 16.94.
USD/MXN weakens after Jackson Hole remarks revive Fed tightening expectations
Warsh’s speech set the tone for markets, which were uncertain whether the new Fed Chair would provide some guidance. Although he emphasized that the US central bank would become more “quiet,” he made inflation the main priority, recognizing that underlying inflation measures have not improved.
He added that the Fed has a fixed PCE goal at 2%, and if prices do not ease, then “we have work to do.”
Following his remarks, USD/MXN reclaimed the 17.00 level, propelled by overall US Dollar strength.
The US Dollar Index (DXY), which measures the buck’s value against a basket of peers, rises by over 0.52% to 99.64, near seven-day highs, as investors grow confident that the Fed will raise rates towards the end of the year.
Other US data showed that Consumer Sentiment in August deteriorated, according to the University of Michigan. At the same time, the Nonfarm Payrolls Annual Revision came at -79K, below forecasts of 183K, improving from the previous revision of -911K.
In Mexico, the Unemployment Rate was unchanged at 2.9% in July, below forecasts of 3%, while the Trade Balance posted a $0.465 billion surplus for the same period, below June’s $3.752 billion increase.
Next week, Mexico’s economic docket will feature the Fiscal Balance on August 31, followed by the August Consumer Confidence on September 3. In the US, the schedule will unveil the ISM Manufacturing and Services PMIs, jobs data, the Fed’s Beige Book and August’s Nonfarm Payrolls report on September 4.
USD/MXN Price Forecast: Technical Outlook
In the daily chart, USD/MXN trades at 17.0362, keeping a bearish near-term tone as spot holds below the clustered simple moving averages around 17.3077 and under the broader descending trend-line structure. The Relative Strength Index (14) at 41.7 has recovered from oversold territory but remains below the 50 line, which only hints at easing downside pressure rather than a sustained bullish shift while price action stays capped by overhead resistance.
On the topside, initial resistance is located at the simple moving averages grouped near 17.3077, where a daily close above would be needed to challenge the medium-term descending trend line stemming from 18.1651 and, further up, the longer-term bearish line drawn from 21.0808. On the downside, the lack of clearly defined nearby support levels from the provided indicators suggests that any sustained break under the recent 17.00 area would expose lower ground, keeping risks skewed toward additional MXN strength unless spot can reclaim the cited resistance cluster.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Mexican Peso FAQs
The Mexican Peso (MXN) is the most traded currency among its Latin American peers. Its value is broadly determined by the performance of the Mexican economy, the country’s central bank’s policy, the amount of foreign investment in the country and even the levels of remittances sent by Mexicans who live abroad, particularly in the United States. Geopolitical trends can also move MXN: for example, the process of nearshoring – or the decision by some firms to relocate manufacturing capacity and supply chains closer to their home countries – is also seen as a catalyst for the Mexican currency as the country is considered a key manufacturing hub in the American continent. Another catalyst for MXN is Oil prices as Mexico is a key exporter of the commodity.
The main objective of Mexico’s central bank, also known as Banxico, is to maintain inflation at low and stable levels (at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%). To this end, the bank sets an appropriate level of interest rates. When inflation is too high, Banxico will attempt to tame it by raising interest rates, making it more expensive for households and businesses to borrow money, thus cooling demand and the overall economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN.
Macroeconomic data releases are key to assess the state of the economy and can have an impact on the Mexican Peso (MXN) valuation. A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only does it attract more foreign investment but it may encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this strength comes together with elevated inflation. However, if economic data is weak, MXN is likely to depreciate.
As an emerging-market currency, the Mexican Peso (MXN) tends to strive during risk-on periods, or when investors perceive that broader market risks are low and thus are eager to engage with investments that carry a higher risk. Conversely, MXN tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
Commerzbank’s Volkmar Baur challenges recent internal analysis on CNY undervaluation and exports, arguing that China’s exchange-rate management and gold purchases point to deliberate weakening. He highlights China’s outsized export and trade-surplus gains since 2019 and notes that a roughly 20% real exchange-rate advantage is unlikely to be neutral for global trade flows.
Exchange-rate policy and export dominance
"Between 2019 and the end of 2025, China increased its real exports by 47%, while global trade grew by only 15% over the same period. China has therefore gained market share somewhere in the world. During the same period, China’s trade surplus rose from about USD 400 billion to USD 1,180 billion."
"Looking exclusively at manufactured goods, China’s trade surplus in 2025 amounted to 1.75% of global gross domestic product. Even in their best years, the world’s top exporters - Germany and Japan - did not even reach this figure combined."
"Unlike the D-Mark or the JPY - which, however, appreciated sharply against the US dollar in the late 1980s - the real exchange rate of the CNY depreciated by about 10% on a trade-weighted basis between 2019 and 2025, and by as much as 22% against the euro."
"Now, certainly not all of this can be attributed to the undervalued CNY. In economics, there is rarely (if ever) just one reason for a particular outcome. And in some product groups, China has actually created a global export market where none existed before."
"But as an economist, I find it nevertheless difficult to argue that a 20% price difference has no effect on supply and demand."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
DBS Group strategists Taimur Baig and Nathan Chow expect South Korea’s August exports to stay strong near 60% year-on-year, underpinning the outlook for the KOSPI and Korean Won (KRW) even as growth moderates from June’s peak. They also see headline and core CPI around 3%, reinforcing its view that further Bank of Korea (BoK) rate hikes are likely this year.
Exports robust, inflation reaccelerating
"August trade and inflation data will be the key focus in the week ahead. Exports are expected to remain strong at around 60% yoy in August, as inferred from the first 20 days of data (+56% yoy), resulting in a strong trade surplus of around USD30bn."
"This should provide fundamental support for the outlook for the KOSPI and KRW. That said, export growth likely peaked at 70.4% yoy in June and is set to moderate for a second consecutive month in August, corroborating our view that the AI supercycle is approaching a peak."
"On the prices front, headline CPI is expected to rebound to around 3% yoy in August, after temporarily moderating to 2.8% in July. Core CPI is also expected to edge up further to around 3%, converging with headline CPI."
"This should reinforce the case for further BOK rate hikes in the remainder of the year."
"In addition to lingering supply-side inflation pressures amid uncertainty over energy prices, demand-side inflation is expected to gradually build as consumption recovers and downstream pricing power improves."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Bank of England (BoE) Governor Andrew Bailey said on Friday that he doesn’t see significant second-round inflation effects in the UK, in an interview with Bloomberg TV at the Jackson Hole Symposium.
Bailey stated, “We’re seeing quite subdued second-round effects, I think we’ve seen a softening labour market for some time now,” suggesting that he is in a wait-and-see mode, ahead of the BoE’s monetary policy on September 17.
Bailey stressed that the BoE is not pre-committed to an interest rate path, assessing the economic situation meeting by meeting, adding that “We are seeing, at the moment, relatively muted second-round inflation effects.”
Key highlights:
WE ARE SEEING QUITE SUBDUED 2ND ROUND EFFECTS SO FAR
WE CAN WATCH THIS SITUATION FOR NOW
I CANNOT PROMISE THAT MUTED 2ND ROUND EFFECTS WILL CONTINUE
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 New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.64% | 0.47% | 0.46% | 0.40% | 0.51% | 0.72% | 0.68% | |
| EUR | -0.64% | -0.16% | -0.15% | -0.28% | -0.13% | 0.10% | 0.04% | |
| GBP | -0.47% | 0.16% | 0.00% | -0.12% | 0.03% | 0.26% | 0.21% | |
| JPY | -0.46% | 0.15% | 0.00% | -0.08% | 0.03% | 0.24% | 0.19% | |
| CAD | -0.40% | 0.28% | 0.12% | 0.08% | 0.11% | 0.32% | 0.28% | |
| AUD | -0.51% | 0.13% | -0.03% | -0.03% | -0.11% | 0.22% | 0.17% | |
| NZD | -0.72% | -0.10% | -0.26% | -0.24% | -0.32% | -0.22% | -0.04% | |
| CHF | -0.68% | -0.04% | -0.21% | -0.19% | -0.28% | -0.17% | 0.04% |
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).
BoE FAQs
The Bank of England (BoE) decides monetary policy for the United Kingdom. Its primary goal is to achieve ‘price stability’, or a steady inflation rate of 2%. Its tool for achieving this is via the adjustment of base lending rates. The BoE sets the rate at which it lends to commercial banks and banks lend to each other, determining the level of interest rates in the economy overall. This also impacts the value of the Pound Sterling (GBP).
When inflation is above the Bank of England’s target it responds by raising interest rates, making it more expensive for people and businesses to access credit. This is positive for the Pound Sterling because higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls below target, it is a sign economic growth is slowing, and the BoE will consider lowering interest rates to cheapen credit in the hope businesses will borrow to invest in growth-generating projects – a negative for the Pound Sterling.
In extreme situations, the Bank of England can enact a policy called Quantitative Easing (QE). QE is the process by which the BoE substantially increases the flow of credit in a stuck financial system. QE is a last resort policy when lowering interest rates will not achieve the necessary result. The process of QE involves the BoE printing money to buy assets – usually government or AAA-rated corporate bonds – from banks and other financial institutions. QE usually results in a weaker Pound Sterling.
Quantitative tightening (QT) is the reverse of QE, enacted when the economy is strengthening and inflation starts rising. Whilst in QE the Bank of England (BoE) purchases government and corporate bonds from financial institutions to encourage them to lend; in QT, the BoE stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive for the Pound Sterling.
Martin Kocher, Governor of the Austrian National Bank and a member of the European Central Bank (ECB), said in an interview with Bloomberg that Europe’s economy shows more momentum.
At the Jackson Hole Symposium on Friday, he said that the economy has been more resilient than expected and that threats lean towards price stability.
Key highlights:
Important how long-lived inflation proves to be.
There are threats to price stability.
There's alertness and no complacency.
The economy was more resilient than expected.
The European economy is showing more momentum now.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.60% | 0.46% | 0.46% | 0.37% | 0.50% | 0.69% | 0.64% | |
| EUR | -0.60% | -0.13% | -0.11% | -0.27% | -0.10% | 0.11% | 0.04% | |
| GBP | -0.46% | 0.13% | 0.00% | -0.14% | 0.04% | 0.24% | 0.18% | |
| JPY | -0.46% | 0.11% | 0.00% | -0.10% | 0.03% | 0.22% | 0.17% | |
| CAD | -0.37% | 0.27% | 0.14% | 0.10% | 0.13% | 0.32% | 0.27% | |
| AUD | -0.50% | 0.10% | -0.04% | -0.03% | -0.13% | 0.20% | 0.16% | |
| NZD | -0.69% | -0.11% | -0.24% | -0.22% | -0.32% | -0.20% | -0.05% | |
| CHF | -0.64% | -0.04% | -0.18% | -0.17% | -0.27% | -0.16% | 0.05% |
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.
Chicago Federal Reserve (Fed) President Austan Goolsbee commented in a CNBC interview at the Jackson Hole Symposium on Friday that he agreed with Fed Chair Kevin Warsh about the details of the economy, adding that “inflation is the Fed’s main issue right now.”
Goolsbee added that “inflation persists longer than expected,” and when asked about the number of FOMC meetings, he said he doesn’t have a strong opinion on the topic.
Key highlights:
AGREED WITH WARSH ABOUT DETAILS OF ECONOMY
AGREES INFLATION IS FED'S MAIN ISSUE RIGHT NOW
PRETTY CLEAR THAT INFLATION FROM OVERHEATED DEMAND IS HARD TO ADDRESS
INFLATION HAS CONTINUED FOR LONGER THAN EXPECTED
WAS OK WITH HOLDING RATES STEADY AT JULY FOMC
DOESN'T HAVE STRONG OPINION ABOUT NUMBER OF FOMC MEETINGS
DOESN'T THINK FED AND TREASURY ARE AT CROSS PURPOSES
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 New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.63% | 0.48% | 0.48% | 0.38% | 0.52% | 0.73% | 0.67% | |
| EUR | -0.63% | -0.15% | -0.13% | -0.28% | -0.11% | 0.11% | 0.05% | |
| GBP | -0.48% | 0.15% | 0.02% | -0.14% | 0.04% | 0.27% | 0.20% | |
| JPY | -0.48% | 0.13% | -0.02% | -0.11% | 0.03% | 0.23% | 0.18% | |
| CAD | -0.38% | 0.28% | 0.14% | 0.11% | 0.13% | 0.34% | 0.29% | |
| AUD | -0.52% | 0.11% | -0.04% | -0.03% | -0.13% | 0.22% | 0.16% | |
| NZD | -0.73% | -0.11% | -0.27% | -0.23% | -0.34% | -0.22% | -0.05% | |
| CHF | -0.67% | -0.05% | -0.20% | -0.18% | -0.29% | -0.16% | 0.05% |
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).
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.
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