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Gold prices rose in India on Thursday, according to data compiled by FXStreet.

The price for Gold stood at 12,855.44 Indian Rupees (INR) per gram, up compared with the INR 12,785.71 it cost on Wednesday.

The price for Gold increased to INR 149,936.40 per tola from INR 149,130.00 per tola a day earlier.

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.

(An automation tool was used in creating this post.)

• Gold attracts some buyers on Thursday as the USD retreats from the YTD top amid profit-taking.
• The hawkish Fed, elevated US bond yields, and geopolitical uncertainties should limit USD losses.
• The bearish setup warrants some caution before positioning for further XAU/USD appreciation.

Gold (XAU/USD) extends the overnight bounce from a two-month low and gains some positive traction on Thursday, rising to the $4,130-$4,135 region during the Asian session. The US Dollar (USD) moves away from its highest level since April 2025 and offers some support to the bullion. The upside for the precious metal, however, seems limited as a combination of factors should limit deeper USD losses.

Minutes of the September 15–16 Federal Open Market Committee (FOMC) meeting, published on Wednesday, showed that members voted unanimously to raise the federal funds rate target range and leaned toward further tightening. Most participants viewed that another rate hike would likely be appropriate by the end of this year to combat persistent inflation. The hawkish tone, however, did little to alter expectations that the Federal Reserve (Fed) will pause at its next meeting in October, prompting USD bulls to take some profits off the table.

Meanwhile, the CME Group's FedWatch Tool indicates that traders are still pricing in around an 80% chance that the US central bank will raise borrowing costs in December. Adding to this, worries that inflation may prove more stubborn than expected amid volatile energy prices keep US bond yields elevated near multi-year highs. This, along with persistent geopolitical uncertainties stemming from the ongoing conflicts in the Middle East, might continue to support the safe-haven Greenback and cap any meaningful appreciation for gold.

In the latest developments, the Pentagon reportedly instructed US Central Command (CENTCOM) several days ago to conclude preparations for resuming major combat operations in Iran as US President Donald Trump weighs a specific date for launching strikes. The US and Israeli sources said that it could happen before the US midterm elections and possibly the Israeli elections a week earlier, raising the risk of a further escalation of tensions in the region. This, in turn, backs the case for the emergence of some USD dip-buyers at lower levels.

Hence, strong follow-through buying is needed to confirm that the Gold price has bottomed out in the near term and position for any further upside. Traders now look to the release of the usual Weekly Initial Jobless Claims data from the US, which, along with speeches from influential FOMC members, will drive the USD. Apart from this, the incoming geopolitical headlines might continue to infuse volatility across the global financial markets and produce short-term opportunities around the XAU/USD pair amid the bearish fundamental backdrop.

XAU/USD daily chart

Technical Analysis

The XAU/USD pair has been showing some resilience below the 78.6% Fibonacci retracement level of the June-August upswing, though it keeps a bearish near-term bias beneath technically significant daily Simple Moving Averages (SMA). Moreover, momentum indicators remain fragile. In fact, the Relative Strength Index (RSI) is hovering near 40 and the Moving Average Convergence Divergence (MACD) is still negative, hinting that selling pressure prevails despite the absence of extreme oversold conditions.

Hence, any subsequent move up is likely to confront an immediate hurdle near the 61.8% Fibo. retracement at $4,233. This is followed by the 50% retracement at $4,320 and the 50-day SMA at $4,332, which collectively reinforce a broader supply zone. Above there, further barriers are located at the 38.2% retracement at $4,408 and the 23.6% level at $4,516. On the downside, immediate support is seen at the 78.6% Fibo. level at $4,108, ahead of the prior cycle low near $3,949.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

• NZD/USD consolidates as US Treasury bond yields rebound toward their highest levels since 2002.
• 10- and 30-year US bond yields trade around 5.31% and 5.70%, respectively.
• Money markets fully price in a December RBNZ rate hike, with investors awaiting the October 28 policy decision.

NZD/USD experienced volatility after posting modest losses in the previous day, remaining in positive territory and trading around 0.5600 during Asian hours on Thursday. However, the pair could face further downside as the US Dollar (USD) gains support from US Treasury bond yields rebounding toward their highest levels since 2002.

The yield on the US 10- and 30-year Treasury notes trade around 5.31% and 5.70%, respectively, at the time of writing. Traders are now looking toward upcoming speeches from Federal Reserve (Fed) officials, including Christopher Waller and Alberto Musalem, for further directional cues.

Meanwhile, a recent spike in oil prices has reignited concerns over persistent inflation, strengthening the prospect of higher interest rates. Federal Reserve policy expectations continue to anchor sentiment. According to the minutes from the Fed's last meeting, policymakers were united in supporting their September rate hike, with a majority agreeing that an additional increase by year-end would be appropriate.

While markets largely anticipate the central bank will keep rates on hold at its October policy meeting, CME's FedWatch tool indicates traders are still pricing in a 78.3% probability of a rate hike in December.

Dollar regains broad traction after recent G10 dispersion

Strategists at Scotiabank highlight that the US Dollar has reasserted itself across the majors, noting that “the USD is once again showing broad strength for the first time in nearly a week” after a period in which “the G10 currencies had shown some dispersion in their performance.” This renewed, across-the-board advance marks a clear shift from the more uneven trading seen in recent sessions.

Financial markets are anticipating further monetary action following the recent Reserve Bank of New Zealand (RBNZ) 25-basis-point rate hike. Money markets have fully priced in another rate hike by December, with investors closely watching the RBNZ's upcoming policy decision scheduled for October 28.

• Euro recovers slightly against the Japanese Yen as the latter underperforms.
• Japan’s Current Account surplus increased to 4,062 billion yen in August vs. 3,194 billion yen estimates.
• France aims to reducer the budget deficit of 5.4% of GDP this year to 5.0% in 2027.

The Euro (EUR) is up 0.14% at around 177.15 against the Japanese Yen (JPY) during the Asian trade on Thursday. The cross rebounds slightly after Wednesday’s sharp downside move, as the Japanese currency underperforms despite the release of the strong Japan Current Account data for August.

The data showed that the surplus increased to 4,062 billion yen in August, beating 3,194 billion yen estimates, and the prior release of 2,988 billion.

On the monetary policy front, Bank of Japan (BoJ) ‌policymaker Ayano Sato, who was appointed by Japan, said on Tuesday that she supports the idea of raising interest rates in several stages. The support for hawkish BoJ outlook from Japan’s representative board members improves the credibility of the central bank.

Though there are signs of slight recovery in the Euro against the Asia-Pacific currency, the outlook of the former remains uncertain due to heightened France fiscal risks. The Euro underperforms in the past few weeks as French bonds face intense sell-off sue to ballooning nation’s debt.

To counter increasing French fiscal concerns, presidential candidate Marine Le Pen has vowed €140 billion worth of spending cuts in the annual budget. Firstly, financial markets doubt that the minority government would be able to get the bill passes in the Parliament without compromise. Even if the budget gets passed, the risk premium to Euro amid political uncertainty will keep the currency under pressure.

France budget path seen narrowing but political risk premium persists

Analysts at Nomura note that France’s proposed budget aims to reduce the deficit “from an expected 5.4% of GDP this year to 5.0% in 2027,” but caution that “even this fairly modest reduction looks challenging amid political and public resistance to further belt-tightening.” They see “routes for PM Lecornu to secure budget passage, potentially through opposition party compromises or Article 49.3,” yet argue that “even successful passage is unlikely to remove France’s political risk premium ahead of the 2027 elections.”

• AUD/USD softens to near 0.6965 in Thursday’s early Asian session.
• Fed officials backed the decision in September to raise interest rates, Minutes showed.
• Former RBA board member said November rate hike is “plausible.”

The AUD/USD pair declines to around 0.6965 during the Asian trading hours on Thursday. The US Dollar (USD) strengthens against the Australian Dollar (AUD) after hawkish Minutes from the Federal Open Market Committee (FOMC). The US weekly Initial Jobless Claims report and the Fedspeak will be the highlights later in the day.

According to meeting minutes released Wednesday, Federal Reserve (Fed) officials anticipate they will hike the interest rates again before the end of the year to head off inflation that has run above target for more than five years.

"The FOMC’s minutes reinforced the hawkish tone accompanying the Fed’s September rate hike, with most participants still viewing further tightening as appropriate and almost all seeing inflation risks tilted to the upside at the time of the meeting," said Westpac analysts.

Last month, Fed policymakers voted to raise the target range for their benchmark rate by a 25 basis points (bps) to 3.75% to 4%, the first increase since July 2023.

Traders are pricing in a roughly 22% odds of another quarter-point hike at the Fed’s October policy meeting, down from around 70% in the days following the September decision.

Former Reserve Bank of Australia (RBA) board member Ian Harper said that further interest rate hike this year is "plausible," but not necessarily likely. Money markets currently price in a 27% chance of a consecutive rate hike to 4.85% at the next RBA Board meeting, ASX Rate Tracker showed.

AUD recovery stalls as UOB shifts to neutral within tight range

Strategists at UOB Group note that their previously negative view on AUD has faded as the recent sell-off lost momentum and key support levels held. They recall that from the middle of last month they had been bearish, but by last Friday, 02 Oct, with spot at 0.6930, they were already cautioning that “any further decline in AUD may fall short of the major support at 0.6866.”

By Monday, 05 Oct, with spot at 0.6970, UOB observed that “downward momentum is starting to slow, and a break above 0.6985 (no change in ‘strong resistance’ level) would indicate that 0.6866 is out of reach.” The Aussie subsequently rose through that level, reaching a high of 0.6990, confirming that the earlier downside target was unlikely to be tested in the near term.

In light of this price action, UOB now adopts a neutral stance on AUD, expecting it “to trade between 0.6935 and 0.7020” over the coming 1–3 weeks, with the pair seen consolidating within this relatively tight range.

Schmid flags AI-driven inflation, keeps Fed firmly hawkish

Fed’s Schmid delivers a notably hawkish tone, with an 8/10 FXS Speechtracker score modestly above the 7.5/10 historical average, underscoring that the labor market remains solid while inflation is “frustrating” and must be decisively addressed. The emphasis that AI is now one of the largest drivers of inflation, coupled with the warning that Fed credibility is at stake and that short rates may still need further tightening despite higher long-term yields, reinforces a message of persistent inflation risks and a willingness to keep policy restrictive.

The FXS Fed Sentiment Index rises by 0.34 points to 137.91, firmly in hawkish territory and consistent with the slightly stronger-than-baseline tone of this speech. The elevated index level, well above the neutral 100 mark, confirms that Schmid’s remarks add incremental hawkish pressure to expectations for the Dollar and broader Fed policy pricing.

Technical Analysis: AUD/USD maintains a negative outlook in the near term

In the daily chart, AUD/USD keeps a bearish near-term bias as spot holds below the 20-period Bollinger middle band and the 100-day moving average. The pair is sliding along the lower half of the recent range, while the Relative Strength Index (14) at 35.57 hovers just above oversold territory, hinting that downside momentum remains in place but is not extreme.

On the downside, initial support aligns with the 20-period Bollinger lower band near 0.6890, where sellers could pause for consolidation. On the topside, immediate resistance emerges at the Bollinger middle band at 0.7040, followed by the 100-day moving average at 0.7050; a sustained break above these levels would be needed to ease bearish pressure before the upper Bollinger band near 0.7190 comes into view.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

• Silver may face headwinds as US Treasury yields hover near multi-decade highs.
• Rising crude oil prices stoke inflation fears and solidify expectations for sustained high interest rates.
• Fed minutes signal potential year-end rate hike, dampening investor demand for precious metals.

Silver price (XAG/USD) gains ground after two days of losses, trading around $60.40 per troy ounce during the Asian hours on Thursday. However, non-yielding Silver may face mounting headwinds as US Treasury bond yields hover near their highest levels since 2002, dampening investor demand for precious metals.

Meanwhile, elevated energy prices are stoking broader inflation worries. Oil advanced following reports that the Trump administration directed the Pentagon to prepare strike options against Iran ahead of the midterm elections, while shipping risks in the Strait of Hormuz remain heightened despite Middle East crude flows recovering to prewar levels.

Federal Reserve (Fed) policy expectations continue to anchor broader market sentiment. Minutes from the Fed’s latest meeting showed unanimous support among all 19 policymakers for their September rate increase, with a clear majority agreeing that an additional hike before year-end would likely be appropriate. While investors widely expect the central bank to keep interest rates on hold at its October policy meeting, CME's FedWatch tool indicates traders are still pricing in roughly a 78% probability of another rate hike in December.

CTAs trim precious metals exposure as liquidation extends

According to TD Securities, trend-following commodity trading advisors are participating in the ongoing precious metals liquidation, with the bank noting that “in the immediate term, however, CTAs are modest sellers of gold and silver, and heavy sellers of platinum on the day.” This positioning underscores a cautious stance across the complex, even as broader macro drivers such as firm real rates and Dollar resilience continue to shape investor interest in gold and silver as hedges against geopolitical and fiscal risks.

Schmid flags AI-driven inflation, keeps Fed firmly hawkish

Fed’s Schmid delivers a notably hawkish tone, with an 8/10 FXS Speechtracker score modestly above the 7.5/10 historical average, underscoring that the labor force “remains in a good place” while inflation is “frustrating” and must be fixed. The emphasis that AI is now one of the largest drivers of inflation, coupled with the warning that the Fed’s credibility is at stake and that “the Fed still has work to do on the short rate despite higher long-term yields,” reinforces a bias toward keeping policy tight and potentially extending restrictive short-rate settings.

The FXS Fed Sentiment Index rises by 0.34 points to 137.91, cementing the Fed’s stance deep in hawkish territory well above the neutral 100 mark. This incremental uptick, aligned with the stronger-than-baseline speech score, signals that markets should continue to price in a firm Fed reaction function to persistent inflation pressures, including those linked to AI-driven cost dynamics.

• DXY extends the previous day’s modest pullback from the vicinity of an 18-month high.
• The hawkish Fed, elevated US bond yields, and geopolitical risks could support the USD.
• The constructive technical setup backs the case for the emergence of some dip-buying.

The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, drifts lower during the Asian session on Thursday and extends the previous day's modest pullback from the vicinity of its highest level since April 2025. The index, however, holds above the 102.00 mark. Moreover, the supportive fundamental backdrop backs the case for the emergence of some dip-buying at lower levels, warranting caution for aggressive bearish traders.

Minutes of the September 15-16 FOMC meeting published on Wednesday showed that the committee voted unanimously to raise the federal funds rate target range. Furthermore, most officials expect that another rate increase would likely be appropriate by the year-end to combat persistent inflation. According to the CME Group's FedWatch Tool, traders are still pricing in around an 80% chance that the Federal Reserve (Fed) will raise borrowing costs in December. Adding to this, worries that inflation may prove more stubborn than expected amid volatile energy prices keep US bond yields elevated near multi-year highs.

Dollar strength underpinned by energy dynamics and US growth outperformance

Strategists at Brown Brothers Harriman highlight that “persistently high energy prices keep risks to inflation, policy rates, and benchmark bond yields skewed to the upside, while favoring energy exporters’ currencies and USD over energy importer’s currencies.” They add that “US growth outperformance and strong foreign appetite for US securities give USD an added boost,” reinforcing the bank’s constructive stance on the Dollar against energy-importing peers.

Moreover, uncertainties stemming from the ongoing conflicts in the Middle East might continue to act as a tailwind for the safe-haven US Dollar (USD). In the latest developments, the Pentagon reportedly instructed US Central Command (CENTCOM) several days ago to conclude preparations for resuming major combat operations in Iran as US President Donald Trump weighs a specific date for launching strikes. The US and Israeli sources said that it could happen before the US midterm elections and possibly the Israeli elections a week earlier. This keeps geopolitical risk premium in play and should support the DXY.

Hence, strong follow-through selling is needed to confirm that the index has topped out in the near-term and position for any meaningful corrective decline. Traders now look forward to the release of the usual Weekly Initial Jobless Claims data from the US, which, along with speeches from influential FOMC members, might provide some impetus to the USD. Furthermore, the incoming geopolitical headlines might continue to infuse volatility across the global financial markets, which should contribute to producing short-term opportunities around the DXY. Nevertheless, the bias seems tilted firmly in favor of bulls.

DXY daily chart

Technical Analysis

The DXY maintains a bullish undertone above the 101.75-101.65 resistance breakpoint, which might continue to protect the immediate downside. Meanwhile, the Relative Strength Index (14) at 70.67 remains in overbought territory, hinting that the index may be vulnerable to a pause or mild corrective pullback rather than a sustained reversal. Nevertheless, the constructive setup suggests that buyers could continue to defend shallow pullbacks, keeping the broader constructive tone intact.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

• EUR/USD rebounds to near 1.1200 in Thursday’s early Asian session.
• Worries about France's fiscal position ahead of the 2027 presidential election undermine the Euro.
• Fed policymakers see another hike coming, minutes showed.

The EUR/USD pair recovers some lost ground to around 1.1200 during the early Asian session on Thursday. However, the potential upside for the major pair might be limited as France's fiscal concerns continued to weigh on the Euro (EUR). Traders await the release of the US weekly Initial Jobless Claims report and the Fedspeak later on Thursday.

French Prime Minister Sébastien Lecornu's minority government announced plans last month for a €54bn savings drive to stave off a catastrophic downgrade or sovereign default. French debt has seen pressure mount as politicians struggle to curb the budget deficit ahead of a divisive election in 2027.

Worries about France’s ability to rein in its budget deficit and Eurozone bond-market turmoil elevated fears of a potential sovereign debt crisis in the bloc and dampened expectations for further rate hikes from the European Central Bank (ECB). This, in turn, could exert some selling pressure on the shared currency.

"It just seems to me like the market is rejecting this 2027 budget. There's an election coming up ... who's going to vote for fiscal austerity with elections coming up?" said Erik Bregar, director of FX and precious metals risk management at Silver Gold Bull in Toronto.

Hawkish Minutes from the Federal Open Market Committee (FOMC) indicated policymakers ‌at the US central bank viewed inflation as the biggest risk to their outlook. Fed funds futures are now pricing an implied 22% chance of a 25-basis-point hike at the Fed's October policy meeting, unchanged from a day earlier, according to the CME Group's FedWatch tool.

Euro under pressure from widening US yield advantage but ABN Amro sees limited further EUR/USD downside

Strategists at ABN Amro note that “more negative German–US yield spreads continue to weigh on the Euro versus the Dollar,” with the interest rate gap between the two countries having “become more negative, which provided support to US Dollar against the Euro.” They highlight that this trend has been evident “in the two-year and ten-year nominal yield spreads, as well as in the ten-year real yield spread between Germany and the US,” and that “EUR/USD moved in line with these increasingly negative spreads, as shown in the two graphs below.”

In addition to the yield dynamics, ABN Amro points out that “fiscal and political uncertainty in France is adding pressure on the Euro,” while “financial markets are pricing in too many rate increases by the Fed and the ECB.” The bank contrasts market pricing with its own projections, observing that “markets expect more than three additional Fed increases by 2027, compared with our forecast of only one,” and that “they also expect slightly fewer than three ECB increases by September next year, compared with our forecast of two.”

Against this backdrop, ABN Amro still “expect limited further EUR/USD weakness and maintain our end-2026 forecast at 1.15.” The bank argues that “if market expectations move closer to our forecasts, the adjustment should put more downward pressure on the Dollar than on the Euro, helping to limit further declines in EUR/USD.”

Schmid flags AI-driven inflation and signals more Fed tightening ahead

Fed’s Schmid delivers a distinctly hawkish message, with an 8/10 FXS Speechtracker score that is modestly above the 7.5/10 historical average, underscoring a stronger-than-usual focus on inflation risks. The emphasis that the labor force “remains in a good place” alongside frustration over stubborn inflation, AI as a “largest driver” of price pressures, and the need for further short-rate tightening despite higher long-term yields collectively point to a Fed stance that prioritizes restoring credibility over early easing.

The FXS Fed Sentiment Index rises by 0.34 points to 137.91, reinforcing that the broader Fed tone remains firmly in hawkish territory well above the neutral 100 threshold. This incremental uptick, aligned with Schmid’s above-baseline hawkish score, suggests that markets should continue to price a higher-for-longer path for the Dollar rather than anticipate imminent policy loosening.

Technical Analysis: EUR/USD retains a negative tone amid oversold conditions

In the daily chart, EUR/USD extends its slide beneath the 100-day simple moving average (SMA) and the Bollinger Bands’ middle line, which keeps the pair under a clear bearish bias. Price is holding just above the lower Bollinger Band support, while the Relative Strength Index (14) around 23 underlines oversold conditions that may slow the downside, but do not yet suggest a sustainable reversal while the pair remains capped by the overhead moving average structure.

On the downside, immediate support is located at the lower Bollinger Band at 1.1140, where sellers could start to book profits if oversold readings persist. On the topside, initial resistance appears at the Bollinger middle band at 1.1380, followed by the 100-day SMA at 1.1495 and the upper Bollinger band near 1.1620; only a recovery above these successive barriers would ease the bearish pressure and open the door to a more constructive medium-term tone.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

• USD/JPY extends the overnight pullback from the weekly high, though the downside seems limited.
• BoJ rate hike bets and looming intervention fears support the JPY, exerting pressure on spot prices.
• Hawkish Fed, elevated US bond yields and geopolitical risks underpin the USD, limiting the downside.

The USD/JPY pair drifts lower during the Asian session on Thursday, extending the previous day's pullback from a one-and-a-half-week high, around the 158.50 region. Spot prices, however, remain confined in a familiar range and currently trade near the lower end of the weekly range, around the 157.85-157.80 region, down 0.15% for the day.

Data released on Wednesday showed that Japan's real wages recorded growth for the eighth consecutive month in August. Moreover, hawkish comments from Bank of Japan (BoJ) board member Ayano Sato and Governor Kazuo Ueda reaffirmed expectations for more interest rate hikes. This, along with speculation that Japanese authorities will step in again to prop up the domestic currency, offers some support to the Japanese Yen (JPY) and exerts some downward pressure on the USD/JPY pair.

Meanwhile, the US Dollar (USD) retains its bullish undertone near the highest level since April 2025 amid a combination of supporting factors. Minutes of the September 15-16 FOMC meeting revealed that the committee voted unanimously to raise the federal funds rate target range, and most officials expect that another rate increase would likely be appropriate by the year-end to combat persistent inflation. Furthermore, elevated  US bond yields act as a tailwind for the buck amid geopolitical risks.

In fact, the Pentagon reportedly told US Central Command (CENTCOM) several days ago to conclude preparations for resuming major combat operations in Iran as US President Donald Trump weighs a specific date for launching strikes. The US and Israeli sources said that US attacks could happen before the US midterm elections and possibly the Israeli elections a week earlier. This, in turn, might continue to benefit the safe-haven USD and help limit the downside for the USD/JPY pair.

Traders now look to the release of the usual Weekly Initial Jobless Claims data, which, along with speeches from influential FOMC members, will drive the USD. Apart from this, further developments surrounding the Middle East crisis might continue to infuse volatility across the global financial markets and contribute to producing short-term opportunities. Meanwhile, the fundamental backdrop warrants some caution before placing aggressive bearish bets on the USD/JPY pair.

USD/JPY daily chart

Technical Analysis

The USD/JPY pair continues its struggle to make it through the 158.50 confluence hurdle – comprising the 200-day Simple Moving Average (SMA) and the 50.0% Fibonacci retracement. This suggests that rallies remain capped by a dense band of overhead resistance despite the broader uptrend seen over recent weeks.

That said, a sustained move beyond the said barrier could lift the USD/JPY pair to the 61.8% level at 159.75, then 78.6% at 161.62 and the cycle high area at 164.00. On the downside, immediate support appears at the 38.2% retracement at 157.13, ahead of the 23.6% level at 155.51, while a deeper pullback would expose the structural floor around the Fibonacci anchor near 152.88.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

• GBP/USD struggles amid a strong US Dollar and surging Treasury yields.
• Markets price in a 78.3% chance of a Fed rate hike in December despite an October hold.
• Rebounding oil prices drive UK gilt yields to multi-year highs, threatening economic growth.

GBP/USD remains subdued for the second successive day, trading around 1.3210 during the Asian hours on Thursday. The pair inches lower as the US Dollar (USD) holds its ground, bolstered by elevated US Treasury bond yields that have climbed near their highest levels since 2002.

Meanwhile, a recent spike in oil prices has reignited concerns over persistent inflation, strengthening the prospect of higher interest rates. Traders are now looking toward upcoming speeches from Federal Reserve (Fed) officials, including Christopher Waller and Alberto Musalem, for further directional cues.

Federal Reserve policy expectations continue to anchor sentiment. According to the minutes from the Fed's last meeting, policymakers were united in supporting their September rate hike, with a majority agreeing that an additional increase by year-end would be appropriate. While markets largely anticipate the central bank will keep rates on hold at its October policy meeting, CME's FedWatch tool indicates traders are still pricing in a 78.3% probability of a rate hike in December.

The British Pound (GBP) is confronting its own set of headwinds. The rebound in oil prices has intensified UK inflation concerns, reinforcing expectations that interest rates will remain higher for longer. This backdrop has pushed UK gilt yields to multi-year highs, adding pressure to the economic outlook and weighing on broader UK growth prospects.

Strait of Hormuz security risks mount as tanker attacks rise

Strategists at DBS point to escalating security risks in the Strait of Hormuz, noting that, according to the UK Maritime Trade Operations, there have been “9 attacks already this month, which is half of September’s total.” They highlight that this sharp increase in incidents underscores the growing vulnerability of tanker traffic through the key chokepoint and is helping to sustain the recent firming in Brent prices, even in the face of coordinated reserve releases by the G7. In turn, DBS argues that sentiment towards Oil-sensitive Asian currencies such as INR, IDR and THB is likely to remain soft against this backdrop of heightened geopolitical tension and supply-route disruption.

Technical Analysis:

In the daily chart, GBP/USD trades at 1.3210, keeping a bearish near-term tone as price holds below both the short-term nine-period exponential moving average (EMA) at 1.3243 and the medium-term 50-period EMA at 1.3379. The alignment of these EMAs above spot suggests upside remains capped, while the Relative Strength Index (14) at 36.16 hovers just above oversold territory, hinting at persistent but not extreme selling pressure.

On the topside, immediate resistance is seen at the nine-period EMA near 1.3243, followed by a more significant barrier at the 50-period EMA around 1.3379, where any recovery would likely stall unless momentum improves markedly. With no clear technical support levels derived from the current dataset, the pair appears vulnerable to further downside, leaving traders focused on intraday price action and sentiment shifts for potential stabilization signals.

(The technical analysis of this story was written with the help of an AI tool. Know more.)