Forex News
- AUD/JPY softens to near 110.35 in Monday’s early European session.
- The cross keeps a negative bias below the 100-day SMA, with bearish RSI momentum.
- The first downside target to watch is 110.15; the immediate resistance level emerges at 111.10.
The AUD/JPY cross trades in negative territory around 110.35 during the early European session on Monday. The Japanese Yen (JPY) strengthens against the Australian Dollar (AUD) as hawkish language may reinforce expectations that the Bank of Japan (BoJ) will raise interest rates this year.
The majority of economists polled by Reuters expect a rate hold at its October policy meeting on Friday, followed by a quarter-point hike at the following meeting in December.
"It's a historical moment for the BOJ, though it faces a more challenging task now that it needs to step not just on the accelerator but the brakes," said Naomi Muguruma, chief bond strategist at Mitsubishi UFJ Morgan Stanley Securities. "The BOJ will probably scrutinise upcoming data and market moves in deciding whether to raise rates in December, or hold until January,” Naomi added.
On the Aussie front, Reserve Bank of Australia (RBA) Chief Economist Sarah Hunter on Monday signalled interest rates may need to rise again, warning inflation remains too high and recent price pressures from overseas risk becoming entrenched in Australia.
Yen support tempered as BoJ tightening path remains gradual
Strategists at Brown Brothers Harriman caution that, despite recent support for the Yen, the Bank of Japan is unlikely to accelerate its tightening cycle, with “headline and core CPI inflation tracking below its 2026 projection of 2.5%.” They highlight that market pricing remains measured, noting that “the swaps curve price in just 2% odds of a 25bps BoJ rate hike to 1.50% on October 30, and 80% probability of a hike on December 18,” underscoring expectations for a gradual, data-dependent normalization rather than an abrupt shift in policy.
BoJ’s Himino flags AI-driven inflation risks, keeping Yen bulls alert
BoJ’s Himino scores 8.2/10 on FXS Speechtracker, matching the historic average and signaling a consistently firm policy tone. Emphasis on strong AI-related capex and exports, rising medium- and long-term inflation expectations, and underlying inflation nearing the 2% target marks a clear hawkish tilt versus the traditional ultra-accommodative stance.
Warnings that postponing policy changes could heighten upside price risks and damage the economy, alongside still-accommodative financial conditions and low real rates, reinforce expectations of gradual normalization. For the Yen, the speech supports a bias toward future tightening, suggesting downside risks for Dollar/Yen if markets bring forward BoJ repricing on sustained inflation and robust bank lending.
Technical Analysis: Negative tone of AUD/JPY remains intact under the 100-day SMA
In the daily chart, AUD/JPY retains a bearish near-term bias as price holds beneath the 100-day simple moving average (SMA) and below the upper Bollinger band. The pair is attempting to stabilize above the Bollinger middle band support, while the Relative Strength Index (RSI) at 47.01 sits just below the neutral 50 line, hinting at subdued recovery momentum rather than a decisive bullish shift.
On the downside, immediate support level is located at the Bollinger middle band at 110.15, ahead of a softer structural floor at the lower Bollinger band around 109.21. A break below this level could expose the October 15 low of 108.64.
On the topside, initial resistance emerges at the upper boundary of Bollinger band near 111.10, en route to the 100-day SMA at 112.05. Further north, the next hurdle is located at the August 18 high of 113.61.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
(The story was corrected on October 26 at 04:50 GMT to say, in the first bullet point, that AUD/JPY softens to near 110.35 in Monday’s early European session, not Asian session.)
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
Gold prices rose in India on Monday, according to data compiled by FXStreet.
The price for Gold stood at 12,247.00 Indian Rupees (INR) per gram, up compared with the INR 12,198.60 it cost on Friday.
The price for Gold increased to INR 142,848.30 per tola from INR 142,282.10 per tola on friday.
Unit measure | Gold Price in INR |
|---|---|
1 Gram | 12,247.00 |
10 Grams | 122,487.70 |
Tola | 142,848.30 |
Troy Ounce | 380,930.90 |
FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
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.
(An automation tool was used in creating this post.)
- Gold gains some positive traction, snapping a two-day losing streak to a three-month low.
- Declining US bond yields cap the attempted USD recovery and lend support to the bullion.
- XAU/USD bulls seem cautious ahead of this week’s central bank events and the key US data.
Gold (XAU/USD) attracts some buyers at the start of a new week, moving back above the $4,000 psychological mark during the Asian session amid a broadly weaker US Dollar (USD). US President Donald Trump has ruled out immediate military action against Iran, triggering a modest pullback in crude oil prices. Furthermore, Federal Reserve (Fed) officials have signaled no urgency to raise interest rates immediately. Adding to this, the recent sharp pullback in US bond yields from multi-year highs keeps a lid on the attempted USD recovery from a three-week low and offers some support to the commodity. The precious metal, for now, seems to have snapped a two-day losing streak to a three-month trough, touched on Friday, though the upside potential seems limited.
S&P Global's flash US Manufacturing Purchasing Managers' Index (PMI) rose to 56 in October, hitting a 53-month high and beating estimates for a reading of 55.6. Meanwhile, the Services PMI matched forecasts and stood at 57.9, compared to 58.8 in September, while the Composite Output Index slipped to 57.6 from a five-year high of 58.4 in the previous month. Additional details revealed that the output price index moved up to 59.8, its highest reading since August 2022, suggesting that inflation could increase further and remain persistently high in the coming months. This comes on top of inflationary concerns stemming from elevated energy prices and underpins prospects for additional Fed tightening, which could keep a lid on any meaningful upside for the non-yielding Gold. .
In fact, crude oil prices jumped to the highest level since September 16 amid supply concerns driven by attacks in Saudi Arabia and tensions involving Iran. In the latest developments, the Iran-backed Houthis in Yemen vowed on Sunday that they will keep attacking Saudi Arabia's King Khalid Airport in Riyadh. Moreover, the stalled US-Iran talks keep the geopolitical risk premium firmly in play and could limit deeper losses for the safe-haven Greenback, warranting some caution before placing aggressive bullish bets on gold. Traders might also opt to move to the sidelines ahead of this week's key central bank events and important US macro releases – the Advance Q3 GDP report and the Personal Consumption Expenditures (PCE) Price Index on Thursday.
The focus, however, will be on the outcome of the two-day FOMC policy meeting on Wednesday. In the absence of updated economic projections, traders will closely scrutinize the accompanying rate statement and Fed Chair Kevin Warsh's comments during the post-meeting press conference for more cues on the future policy path, which will influence the near-term USD price dynamics. Meanwhile, the Reserve Bank of New Zealand (RBNZ), the European Central Bank (ECB) and the Bank of Japan (BoJ) are also scheduled to announce their rate decisions this week. This might further infuse volatility around the Gold price. Nevertheless, the aforementioned fundamental backdrop warrants some caution before confirming that the XAU/USD pair has bottomed out.
XAU/USD 4-hour chart
Technical Analysis
The precious metal maintains a bearish near-term tone following last week's breakdown through a short-term trading range support near the $4,100 mark. Moreover, the recent repeated failures to conquer the 100-period Exponential Moving Average (EMA) validate the negative outlook, suggesting that the attempted recovery remains corrective within a broader downside bias.
Hence, any subsequent move up is more likely to be sold into and remain capped near the $4,100 support-turned-resistance. The next hurdle is clustered around the 100-period EMA at $4,135.95. The XAU/USD pair would need a sustained move above the said barrier for any shift to a more constructive outlook and additional gains toward reclaiming the $4,200 mark.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.17% | -0.08% | 0.00% | 0.02% | 0.09% | -0.06% | -0.15% | |
| EUR | 0.17% | 0.13% | 0.16% | 0.20% | 0.26% | 0.15% | 0.03% | |
| GBP | 0.08% | -0.13% | 0.04% | 0.09% | 0.14% | 0.00% | -0.10% | |
| JPY | 0.00% | -0.16% | -0.04% | 0.04% | 0.10% | -0.04% | -0.15% | |
| CAD | -0.02% | -0.20% | -0.09% | -0.04% | 0.06% | -0.06% | -0.16% | |
| AUD | -0.09% | -0.26% | -0.14% | -0.10% | -0.06% | -0.13% | -0.24% | |
| NZD | 0.06% | -0.15% | -0.01% | 0.04% | 0.06% | 0.13% | -0.10% | |
| CHF | 0.15% | -0.03% | 0.10% | 0.15% | 0.16% | 0.24% | 0.10% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
- USD/CHF depreciates as the US Dollar (USD) declines on Fed rate-hold bets in October.
- Safe-haven demand eases after US President Donald Trump ruled out immediate military strikes against Iran.
- Europe's fiscal concerns and lower bond yields boosted the franc, while inflation remains tied to oil prices.
USD/CHF depreciates after registering over 0.5% gains the previous day, trading around 0.8230 during Asian hours on Monday. The pair loses ground as the US Dollar (USD) declines as the Federal Reserve (Fed) is widely expected to hold interest rates steady before potentially pursuing another rate hike in December.
According to the CME FedWatch Tool, markets are currently pricing in a 90.6% probability of a rate pause at the October 27–28 policy meeting, alongside a 79.7% chance of a hike in December.
Moreover, the Greenback faces challenges due to easing safe-haven demand, driven by US President Donald Trump ruling out immediate military action against Iran, stating, “there will not be a strike today,” according to Al Jazeera.
However, market anxiety persists over the possibility of strikes resuming after this week’s Israeli elections and next week’s US midterm elections, with reports indicating Iran is prepared to retaliate by targeting Israel and the UAE.
The Swiss Franc (CHF) gained strength as the yield on the Swiss 10-year government bond fell to 0.5%, driven by safe-haven demand amid growing concerns over Europe's fiscal outlook. At the same time, Swiss National Bank (SNB) Meeting Minutes revealed that policymakers observed inflationary pressures with no signs of spillover effects into the broader economy, attributing the recent rise in inflation primarily to higher oil prices and the depreciation of the Franc.
Strategists at UOB Group maintain a cautious, negative stance on USD/CHF over the 1–3 week horizon, noting that they have "been holding a negative USD view since late last week." In their latest update from Monday, 19 October, when the pair was trading around 0.8240, they highlighted that the Dollar "could decline further to 0.8200." That move has since materialised, with USD/CHF breaking below 0.8200 yesterday and "reaching a low of 0.8190."
UOB now judges that while the Dollar "could continue to decline," the absence of "significant increase in downward momentum" casts doubt on whether the next downside objective at 0.8140 is attainable in the current move. On the topside, the bank flags 0.8250 as the key level to watch, reiterating that "a breach of 0.8250 (‘strong resistance’ level previously at 0.8275) would indicate that USD is not declining further."
Swiss Franc FAQs
The Swiss Franc (CHF) is Switzerland’s official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country’s economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc’s value, causing a turmoil in markets. Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone.
The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country’s currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in.
The Swiss National Bank (SNB) meets four times a year – once every quarter, less than other major central banks – to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.
Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc’s (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank’s currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate.
As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland’s main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.
- EUR/JPY may test the 12-month low of 175.10.
- The 14-day Relative Strength Index near 33 signals lingering weak momentum.
- The primary barrier lies at the nine-day EMA of 176.69.
EUR/JPY gains ground after three days of losses, trading around 175.90 during Asian hours on Monday. Technical analysis of the daily chart shows the currency cross remains within a descending channel pattern, indicating a persistent bearish bias.
The EUR/JPY cross is keeping a bearish near-term tone as it holds below both the nine- and 50-period Exponential Moving Averages (EMAs). The alignment of the shorter EMA under the longer one, with price still capped beneath them, suggests upside attempts remain constrained, while the 14-day Relative Strength Index (RSI) around 33 hints at lingering weak momentum rather than outright oversold conditions.
The EUR/JPY cross may test the 12-month low of 175.10, reached on October 23, followed by the lower boundary of its descending channel around 175.00. Further declines below this confluence support zone would open the door for the currency cross to navigate the region around the 15-month low at 169.72.
On the upside, the primary barrier lies at the nine-day EMA of 176.69, followed by the upper boundary of the descending channel near 178.60. Further resistance lies at the 50-day EMA of 179.38. A move above the medium-term price average would cause a bullish reversal, supporting the EUR/JPY cross to explore the area around the all-time high of 187.95, reached on April 17.
Yen firms as risk-off tone persists and Japan inflation tops BoJ target
Analysts at MUFG highlight that the Yen “has continued to trade at stronger levels at the end of this week encouraged by more risk-off trading conditions.” They note that USD/JPY “fell to a low overnight of 156.08 but has since risen back up towards the 157.00-level as the sell-off in Asian equity markets reversed,” underscoring the currency’s defensive bid amid shifting risk sentiment.
Complementing the market moves, Deutsche Bank points out that “in Japan, September inflation rose as expected overnight, with core CPI accelerating to a nine-month high of +2.1% y/y and moving above the BoJ’s target, supported by higher energy costs and yen weakness.” Together, the firmer Yen and above-target core CPI reinforce the picture of a market balancing risk-off flows with evolving domestic price dynamics.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
- NZD/USD drifts higher to near 0.5700 in Monday’s early Asian session.
- Markets brace for another RBNZ rate hike on Wednesday.
- The probability of Fed rate increase in October has fallen, strengthening expectations that policymakers will hold rates steady.
The NZD/USD pair gathers strength to around 0.5700 during the early Asian session on Monday. The New Zealand Dollar (NZD) edges higher against the US Dollar (USD) amid growing expectations of a Reserve Bank of New Zealand (RBNZ) rate hike. Traders will closely monitor the RBNZ and US Federal Reserve (Fed) interest rate decisions later on Wednesday.
Many analysts see inflation in New Zealand accelerating well above 4% in the fourth quarter and potentially staying outside the 1-3% band the RBNZ targets for longer than the central bank had previously projected. New Zealand’s central bank is widely expected to deliver another 25 basis points (bps) hike to 3.00% at its upcoming policy meeting on Wednesday.
“Higher for longer inflation is a major headache for the RBNZ,” said Mark Smith, senior economist at ASB Bank in Auckland, who sees inflation above 3% until the fourth quarter next year and tips a rate hike on October 28. “We expect the RBNZ to acknowledge that they have more work to do and to maintain a conditional tightening bias,” Mark added.
The Fed raised its benchmark rate in September for the first time in about three years. Expectations for further rate increases began to shift after Fed Chair Kevin Warsh repeatedly struck a cautious tone. Warsh said at the International Monetary Fund’s (IMF) annual meeting that he would not prejudge future rate decisions.
Meanwhile, Fed Vice Chair Philip Jefferson and Governor Christopher Waller stated that there was no need to rush further hikes. According to the CME FedWatch tool. the implied probability of an October rate hike fell from as high as 70% to around 9.4%.
NZD outlook supported by persistent inflation but Fed tightening caps kiwi gains
Strategists at Brown Brothers Harriman note that, despite the softer headline CPI print, “underlying inflation points to persistent price pressure.” They highlight that the RBNZ’s sectoral factor model “printed at 2.8% y/y for a second straight quarter, near the top of its 1-3% target range,” while “CPI ex. petrol remained at 3.2% y/y for a fourth consecutive quarter,” underscoring the stickiness of core price dynamics.
Against this backdrop, BBH argues that “above target inflation and still elevated oil prices argue for additional RBNZ rate hikes.” They point out that “the swaps curve price in 85% odds of a 25bps RBNZ rate hike to 3.00% on October 28 and more than 100bps of tightening over the next twelve months to 3.75% – near the upper end of the RBNZ’s estimated neutral range of 2.20%-4.10%.” However, BBH cautions that “nonetheless, NZD/USD upside is constrained because Fed tightening curbs the scope for policy convergence,” limiting the kiwi’s ability to fully capitalize on the domestic hawkish backdrop.
Warsh flags investment surge and AI focus but avoids policy pre-commitment
Fed Chair Warsh’s speech scores 5.6/10 on the FXS Speechtracker, modestly softer relative to the historical average of 6.1/10, reflecting a cautious tone despite upbeat references to structural growth and an investment surge. The remark about being “over-scarred from the global financial crisis” underscores a lingering bias toward risk management and financial stability, even as Warsh highlights AI and private-sector investment as key upside drivers for the real economy. Warsh’s refusal to prejudge the October and December meetings and emphasis on crystallizing data on output, employment, and inflation signal a data-dependent stance that keeps Dollar rate expectations flexible but anchored in a commitment to price stability.
The FXS Fed Sentiment Index was unchanged, moving 0.00 points to a still-hawkish level of 127.51, indicating that the speech did not materially shift market perceptions of the Fed’s policy bias. The combination of a high index level and a slightly below-baseline speech score suggests that, compared to the established baseline, Warsh’s remarks maintain a hawkish policy backdrop for the Dollar without adding fresh tightening signals.
Technical Analysis: NZD/USD remains capped under the 100-day SMA
In the daily chart, NZD/USD keeps a bearish tone as spot remains capped beneath the 100-day moving average (MA) and the upper Bollinger band. Price holds above the Bollinger middle band, suggesting some near-term stabilization within the broader downtrend, while the Relative Strength Index (14) at 54.4 shows neutral-to-positive momentum that mildly tempers immediate selling pressure without overturning the bearish structural bias.
On the topside, initial resistance emerges at the upper Bollinger band around 0.5710, ahead of a stronger barrier at the 100-day MA at 0.5770, where sellers are likely to reassert control if the pair attempts a recovery. On the downside, support is seen at the Bollinger middle band near 0.5635, with a break exposing the lower Bollinger band at 0.5560, a deeper demand area that would come into view if bearish pressure resumes decisively.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.
The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.
Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.
The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD 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.
- USD/JPY struggles to capitalize on an Asian session uptick, though the downside seems limited.
- A divergent Fed-BoJ policy stance caps spot prices ahead of this week’s key central bank events.
- Traders will further take cues from the release of the US Q3 GDP report and the PCE Price Index.
The USD/JPY pair attracts fresh sellers following an uptick at the start of a new week, stalling Friday's modest bounce from the vicinity of the 156.00 mark, or its lowest level since September 18. Spot prices seem vulnerable below the 157.00 mark, though bears might refrain from placing aggressive bets ahead of this week's key central bank events and data risks.
The US Federal Reserve (Fed) is scheduled to announce its decision at the end of a two-day policy meeting on Wednesday. The focus, however, will be on the accompanying rate statement and Fed Chair Kevin Warsh's comments during the post-meeting press conference. Apart from this, important US macro releases – the Advance Q3 GDP print and the Personal Consumption Expenditures (PCE) Price Index on Thursday – will influence market expectations about the Fed's future policy path and drive the US Dollar (USD). The market focus would then shift to the crucial Bank of Japan (BoJ) policy update on Friday, which should further determine the near-term trajectory for the USD/JPY pair.
In the meantime, Fed officials recently signaled that there is no urgency to raise interest rates at the upcoming policy meeting. Furthermore, the recent fall in US bond yields from multi-year highs keeps a lid on the attempted USD recovery from a three-week low, touched last Thursday. The Japanese Yen (JPY), on the other hand, draws support from BoJ Governor Kazuo Ueda's more hawkish comments last week, indicating that underlying inflation is nearing the 2% target, which strengthens the case for an imminent interest rate hike. This, in turn, might continue to act as a tailwind for the USD/JPY pair, though persistent geopolitical uncertainties could limit deeper losses for the safe-haven buck.
In the latest developments surrounding the Middle East crisis, US President Donald Trump has ruled out immediate military action against Iran. However, the Iran-backed Houthis in Yemen threatened on Sunday that they will keep attacking Saudi Arabia's King Khalid Airport in Riyadh. This comes on top of stalled US-Iran talks and keeps the geopolitical risk premium firmly in play. Apart from this, traders are still pricing in around an 80% chance that the US Fed will raise borrowing costs again in December. This, in turn, might hold back USD bears from placing aggressive bets and help limit the downside for the USD/JPY pair, warranting caution before positioning for any further downside.
USD/JPY 4-hour chart
Technical Analysis
The USD/JPY pair keeps a bearish near-term tone below the 200-period Simple Moving Average (SMA) on the 4-hour chart. The said barrier is pegged at 157.14 and is followed by the 23.6% Fibonacci retracement at 157.58. Only a sustained break above this band would reopen the path toward the recent cycle highs.
On the downside, immediate support aligns with the 38.2% retracement at 156.69, ahead of a deeper Fibonacci cluster at 155.98 and 155.26 (50% and 61.8%), where buyers may attempt to stabilize the pullback.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
- Silver prices face headwinds after US President Donald Trump ruled out immediate military strikes against Iran.
- Potential post-election strikes, Iranian retaliation risks, and ongoing Houthi attacks in Saudi Arabia keep geopolitical anxiety active.
- Markets price in a 90.6% chance of a Fed rate pause in October.
Silver price (XAG/USD) declines after opening at a bullish gap, trading around $53.70 per troy ounce during Asian hours. Silver price falls as safe-haven demand eases after US President Donald Trump ruled out immediate military action against Iran. Speaking to Al Jazeera, Trump stated, “There will not be a strike today.” However, market anxiety persists over the possibility of strikes resuming after this week’s Israeli elections and next week’s US midterm elections, with reports indicating Iran is prepared to retaliate by targeting Israel and the UAE.
Meanwhile, regional tensions remain elevated in the Arabian Peninsula. Yemen's Houthis declared on Sunday that they will continue targeting Saudi Arabia's King Khalid Airport in Riyadh, according to Reuters. This announcement arrived just hours after Saudi officials reported that flight operations had resumed. Hostilities escalated over the weekend as the Houthis claimed responsibility for attacks on both the airport and Saudi oil facilities on Saturday, while Saudi Arabia confirmed it intercepted additional incoming missiles and drones on Sunday while restoring partial airport operations.
The broader Middle East conflict continues to push up global energy prices, reinforcing inflation concerns and solidifying expectations for higher interest rates. Elevated interest rate expectations typically create headwinds for non-yielding assets, including Silver and other precious metals.
Traders are focusing on the upcoming Federal Reserve policy decision. The central bank is widely expected to hold interest rates steady before potentially pursuing a rate hike in December. According to the CME FedWatch Tool, market pricing reflects a 90.6% probability of a rate pause at the October 27–28 policy meeting, alongside a 79.7% chance of an increase in December.
CTA selling pressure pushes gold toward key support
According to strategists at TD Securities, "CTAs have been heavy sellers of gold, with prices now reaching key support levels," underscoring the extent of systematic selling that has recently weighed on the metal.
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
- EUR/USD gains ground to around 1.1220 in Monday’s early Asian session.
- France’s debt and political concerns might cap the upside for the Euro.
- Traders brace for the ECB and Fed interest rate decisions later this week.
The EUR/USD pair recovers some lost ground to near 1.1220 during the early Asian trading hours on Monday. However, the potential upside for the pair might be limited amid concerns over French unrest and political risks. Germany’s IFO reports are due later on Monday.
CNBC reported that protests throughout France over the worsening cost of living and growing inequality turned violent for the second consecutive weekend. France’s Interior Ministry reported that approximately 410,000 people participated in protests across several major cities, including Paris.
Concerns about growing unrest in France and the country's worsening budget problems might exert some selling pressure on the shared currency in the near term.
The European Central Bank (ECB) is set to hold its benchmark rate at 2.5% at its October policy meeting on Thursday, though a hike is all but priced in before the year's end, according to Reuters. Traders will scrutinize any hint of the rate outlook after ECB President Christine Lagarde said in late September that a moderate policy response to inflation was appropriate.
Across the pond, markets widely expect the US Federal Reserve (Fed) to leave interest rates unchanged just days before the midterm elections.
Markets are now pricing in nearly a 90.6% chance that the Fed will keep rates on hold at its upcoming October meeting on Wednesday, according to the CME FedWatch tool, with a 79.4% odds that the US central bank will raise interest rates in December.
Euro underpinned by ECB hike prospects but France risk caps upside
Strategists at Brown Brothers Harriman highlight that “above target Eurozone inflation and a resilient growth outlook give the ECB scope to deliver additional hikes,” noting that “the swaps curve implies nearly 75bps of tightening to 3.25% in the next twelve months.” They argue this prospective tightening “limits policy divergence with the Fed and the drag on EUR/USD.” At the same time, BBH cautions that “France’s fiscal troubles can drive EUR/USD down to 1.1000,” underscoring that country-specific risks may offset support from the broader Eurozone policy backdrop.
Warsh cautious on crisis scars but upbeat on investment surge and AI, keeping Dollar bulls attentive
Fed Chair Warsh’s speech scores 5.6/10 on the FXS Speechtracker, modestly below the 6.1/10 historical average, signaling a slightly less impactful but still broadly consistent tone relative to the established baseline. The admission of being “over-scarred” by the global financial crisis underscores a risk-aware bias even as Warsh highlights structural growth, an investment surge driven by “good policies,” and AI as a near-term demand catalyst with uncertain employment effects. Overall, the emphasis on price stability, upcoming “crystalizing” FOMC meetings, and global spillovers points to a cautious but constructive stance that keeps Dollar-supportive expectations intact without pre-committing on the policy path for the rest of 2026.
The FXS Fed Sentiment Index was unchanged, moving 0.00 points to a level of 127.51, which remains firmly in hawkish territory despite the speech’s slightly softer score on the FXS Speechtracker. This stable, elevated reading suggests markets see the current policy bias as consistently hawkish, with Warsh’s focus on output, employment, inflation, and financial stability risks reinforcing expectations that the Fed will stay vigilant, a backdrop that should continue to underpin the Dollar against major peers.
Technical Analysis: Negative tone of EUR/USD prevails under the 100-day SMA
In the daily chart, EUR/USD keeps a bearish near-term bias as spot remains capped beneath the 100-day simple moving average (SMA). Price also holds under the Bollinger Bands’ middle line, reinforcing overhead pressure, while the lower band marks the nearest volatility floor. The Relative Strength Index (RSI) at 39.7 stays below the 50 threshold, suggesting weak upside momentum and favoring further downside probes unless the pair can reclaim the mid-band area.
On the topside, initial resistance emerges at the Bollinger middle band around 1.1225, followed by the upper band near 1.1315, with the 100-day SMA at 1.1450 acting as a more distant, trend-defining barrier. On the downside, the Bollinger lower band at 1.1140 offers the first meaningful support, and a clear break below this level would open the door to a continuation of the current bearish phase on the daily timeframe.
(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.
- GBP/USD regains positive traction at the start of a new week amid a combination of supporting factors.
- The recent decline in US bond yields caps the USD recovery, while BoE rate hike bets underpin the GBP.
- Mideast jitters and a hawkish Fed could limit USD losses ahead of the central bank event and data risks.
The GBP/USD pair attracts some dip-buyers near the 1.3360 area during the Asian session on Friday, stalling last week's modest pullback from its highest level since September 16. Bulls, however, might await sustained strength and acceptance above the 1.3400 mark before placing fresh bets as the market focus remains glued to this week's key central bank event.
The US Federal Reserve (Fed) is scheduled to announce its decision on Wednesday and is expected to leave interest rates unchanged at the end of a two-day policy meeting. In the absence of updated economic projections, traders will closely scrutinize the accompanying rate statement and Fed Chair Kevin Warsh's comments during the post-meeting press conference. Apart from this, important US macro releases – the Advance Q3 GDP print and the Personal Consumption Expenditures (PCE) Price Index on Thursday – will influence market expectations about the Fed's future policy path. The outlook, in turn, will drive US Dollar (USD) demand and provide some meaningful impetus to the GBP/USD pair.
In the meantime, the recent sharp decline in US bond yields keeps a lid on the attempted USD recovery move from a three-week low, touched last Thursday. The British Pound (GBP), on the other hand, continues to draw support from firming expectations of tighter monetary policy from the Bank of England (BoE), bolstered by stronger-than-expected UK inflation data and resilient labor market figures. In fact, traders are pricing in roughly 95% odds for a 25-basis-point (bps) BoE rate hike at the next meeting on November 5. This, in turn, acts as a tailwind for the GBP/USD pair and backs the case for an extension of the recent goodish rebound from a nearly four-month trough, touched on October 14.
Meanwhile, investors are still assigning a nearly 80% probability that the US central bank will raise borrowing costs in December. Furthermore, the geopolitical risk premium remains firmly in play amid stalled US-Iran peace talks. In further developments, the Iran-backed Houthis in Yemen threatened on Sunday that they will keep attacking Saudi Arabia's King Khalid Airport in Riyadh. This could limit losses for the safe-haven Greenback and cap the GBP/USD pair, making it prudent to wait for sustained strength and acceptance above the 1.3400 mark before placing fresh bullish bets. Nevertheless, the supportive fundamental backdrop suggests that any corrective pullback could be bought into.
GBP/USD daily chart
Technical Analysis
The GBP/USD pair holds just beneath the 100-day Simple Moving Average (SMA) at 1.3390 and the 50.0% Fibonacci retracement at 1.3403. A daily close above the latter would open the way toward the 61.8% retracement at 1.3466 and then 1.3556.
On the downside, initial support emerges at the 38.2% retracement at 1.3341, ahead of the 23.6% level at 1.3263, where buyers would be expected to show more interest. A sustained break under 1.3263 would expose the structural Fibonacci anchor at 1.3137.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling 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, its currency will benefit 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.
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