Forex News
- AUD/USD declines to near 0.7100 as the US Dollar continues its outperformance.
- Fed board members warn of persistent inflation risks amid energy shocks and strong demand.
- Australian preliminary S&P Global Composite PMI arrives lower at 50.8 in September.
The Australian Dollar (AUD) is down 0.15% at around 0.7100 against the US Dollar (USD) during the early European trading session on Wednesday. The Aussie pair faces pressure as the US Dollar extends its advance, with Federal Reserve (Fed) board members delivering hawkish commentary on interest rates and warnings of persistent inflation risks.
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 | 0.21% | 0.24% | 0.17% | 0.12% | 0.21% | 0.43% | 0.10% | |
| EUR | -0.21% | 0.02% | -0.02% | -0.07% | 0.01% | 0.22% | -0.11% | |
| GBP | -0.24% | -0.02% | -0.04% | -0.09% | -0.03% | 0.19% | -0.06% | |
| JPY | -0.17% | 0.02% | 0.04% | -0.04% | 0.01% | 0.26% | -0.02% | |
| CAD | -0.12% | 0.07% | 0.09% | 0.04% | 0.07% | 0.31% | 0.03% | |
| AUD | -0.21% | -0.01% | 0.03% | -0.01% | -0.07% | 0.23% | -0.03% | |
| NZD | -0.43% | -0.22% | -0.19% | -0.26% | -0.31% | -0.23% | -0.27% | |
| CHF | -0.10% | 0.11% | 0.06% | 0.02% | -0.03% | 0.03% | 0.27% |
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).
In the early European trade, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.17% higher to near 100.73, the highest level seen in over seven weeks.
Dollar support underpinned as Fed hawks stress persistent inflation risks
Analysts at ING highlight that "hawkish Fed commentary was however the clearest driver" of Dollar strength, pointing to remarks from Chicago Fed President Austan Goolsbee and St. Louis Fed President Alberto Musalem. Goolsbee warned that "supply shocks, combined with strong spending and AI-related investment, could keep inflation persistent," cautioning further that "the path back to 2% inflation may not be painless." Later in the day, Musalem "reinforced the hawkish message," arguing that "front-loaded gradual tightening is preferable and that policy remains accommodative." ING notes that Musalem is regarded as "one of the more hawkish members" and may be among "the four officials who projected two additional hikes this year in the dot plot, although he is also a non-voter," underscoring the firm hawkish tone that continues to support US front-end rates.
Meanwhile, the Australian Dollar trades higher against its major currency peers, except North American currencies. Earlier in the day, Australian S&P Global flash Composite Purchasing Managers’ Index (PMI) data for September came in weaker-than-expected. The Composite PMI arrived at 50.8, lower than 52.7 in August due to a decline in the manufacturing sector output and a slowdown in the services sector activity.
AUD/USD Technical Analysis
In the daily chart, AUD/USD trades at 0.7104, holding just above the 38.2% Fibonacci retracement at 0.7097 but still capped by the 20-period exponential moving average (EMA) at 0.7135. This configuration hints at a consolidative to slightly bearish near-term tone, as price struggles to reclaim the overhead EMA while staying supported by nearby Fib levels.
The Relative Strength Index (14) at 44.5 sits below the midline, suggesting subdued bullish momentum and reinforcing the idea of a range-bound bias rather than a decisive trend.
On the downside, immediate support is located at the 38.2% retracement at 0.7097, ahead of the denser structural floor formed by the 50.0% and 61.8% Fibonacci levels at 0.7053 and 0.7009, while deeper pullbacks would expose the 78.6% and 100% retracements at 0.6947 and 0.6867. On the topside, initial resistance is seen at the 20-period EMA at 0.7135, followed by the 23.6% retracement at 0.7151, with a more significant barrier emerging at the cycle high anchor near the 0.0% retracement at 0.7238.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
- The Indian Rupee drops against the US Dollar after rising significantly in the last two trading days.
- The Fed is almost certain to deliver at least one more interest rate hike this year.
- US President Trump sees deal with Iran after midterm elections.
The Indian Rupee (INR) trades slightly lower against the US Dollar (USD) in the opening session on Wednesday after rising in the past few trading days. The USD/INR pair is marginally up to near 95.62 as the US Dollar outperforms amid firm expectations that the Federal Reserve (Fed) will extend its monetary tightening cycle for the remainder of the year.
As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.17% higher to near 100.73, the highest level seen in over seven weeks.
The CME FedWatch tool shows traders see an almost 90% chance that the Fed will deliver at least one more interest rate hike this year.
What’s driving hawkish Fed expectations
Analysts at MUFG note that these rate expectations “were supported by hawkish comments from regional Fed presidents although neither are voting members this year.” In particular, Chicago Fed President Austan Goolsbee, who “will become a voting member again from next year,” cautioned that “supply shocks have come more frequently, hit harder and lasted longer and once supply shocks to inflation become persistent, some of the logic behind ‘looking through’ no longer holds,” reinforcing the case for an extended period of tighter Fed policy.
On Tuesday, Richmond Fed Bank President Thomas Barkin, who is also currently a non-voting member, said that more interest rate hikes will be required to tame inflation. However, he didn’t provide any specific guidance regarding how much higher interest rates could go. "Will additional hikes be required, and how many? We'll see," Barkin said, Reuters reported.
Oil prices extend the decline
Oil prices continue to remain under pressure on hopes of diplomacy between the United States (US) and Iran, a scenario that will ease energy supply disruption through the Middle East. The optimism over US-Iran diplomacy boosted after a report from Kyodo News showed that a senior Iranian official confirmed Tehran sending proposal to the US via mediators, which states that Iran would reopen the Hormuz Strait within seven days in return of Washington’s military de-escalation near their seaports.
In the opening session, the MCX Crude Oil contract expiring on October 19 is down 1.43% to near Rs. 8,520, the lowest level seen in two weeks.
Lower oil prices bode well for currencies from economies, such as India, which rely heavily on oil imports to meet their energy needs.
In a speech at United Nations (US) General Assembly on Tuesday, US President Donald Trump said that either Washington will make a deal or will drive the nation to hell. “I have a big decision to make on whether to make a deal or drive Iran into hell with no chance of survival and no hope of future greatness or generations.” Trump said. He reiterated stress that Iran will never have a nuclear weapon and the deal with the nation will be made right after midterm elections.
USD/INR Technical Analysis
In the daily chart, USD/INR trades at 95.6305, holding a mild bullish bias as spot remains above the 20-period exponential moving average (EMA) at 95.5260. The positioning over this short-term EMA suggests underlying demand, while the Relative Strength Index (RSI) at 53.79 stays just above the neutral 50 line, hinting at steady rather than aggressive upside momentum.
On the downside, immediate support is seen at the 20-period EMA near 95.53, which reinforces the current floor under prices. As long as USD/INR defends this moving average, buyers are likely to retain control, with any pullback toward the EMA viewed as a potential dip-buying area before the pair can attempt fresh gains into uncharted resistance territory.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Indian Rupee FAQs
The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee.
The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference.
Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee.
Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.
- Gold attracts fresh sellers on Wednesday as the Fed’s hawkish stance continues to underpin the USD.
- US bond yields remain depressed amid easing inflation fears and could help limit losses for the bullion.
- Traders now look to flash global PMIs for some impetus ahead of the Trump-Xi meeting on Thursday.
Gold (XAU/USD) struggles to capitalize on the previous day's goodish rebound from sub-$4,300 levels and meets with fresh supply during the Asian session on Wednesday. The US Dollar (USD) extends its recent uptrend, hitting a fresh high since July 30 amid the Federal Reserve's (Fed) hawkish outlook. This, in turn, is seen as a key factor undermining the non-yielding bullion.
The US central bank raised interest rates for the first time in over three years at the conclusion of the September policy meeting and signaled one more hike this year. Moreover, St. Louis Fed President Alberto Musalem and Chicago Fed President Austan Goolsbee explicitly backed the case for further policy tightening as inflation risks remain elevated. Adding to this, Boston Fed President Susan Collins and Richmond Fed President Tom Barkin both left the door open on future hikes to rein in inflation. According to the CME Group's FedWatch Tool, traders see a 90% chance of a rate hike in December. This, along with persistent geopolitical uncertainties, continues to act as a tailwind for the safe-haven Greenback.
In the latest developments surrounding the Middle East crisis, US President Donald Trump told the United Nations General Assembly (UNGA) that he faces a big decision on whether to make a deal with Iran or "annihilate" the Islamic Republic if the conflict went unresolved. Furthermore, tighter US sanctions intended to cripple Iranian aviation come into force on Wednesday. Meanwhile, Iranian Foreign Minister Abbas Araghchi met with US Special Envoy Steve Witkoff to restate Tehran's conditions for reopening the Strait of Hormuz. Trump told reporters the discussions went well, but did not offer further details. This keeps the geopolitical risk premium in play and favors USD bulls, weighing on the Gold price.
That said, US bond yields remain depressed below multi-year highs as the recent decline in crude oil prices helps cool fears of runaway inflation. This, in turn, keeps the precious metal confined to the weekly range. Traders now look to the release of flash global PMIs to gauge the health of major developed economies. Apart from this, speeches from influential FOMC members, along with incoming geopolitical headlines, will drive USD demand and produce short-term opportunities around the Gold price. The focus, however, will remain glued to a crucial meeting between US President Donald Trump and his Chinese counterpart Xi Jinping on Thursday, which should provide some meaningful impetus to the Gold price.
XAU/USD daily chart
Technical Analysis
The XAU/USD pair holds a capped tone below the 100-period Exponential Moving Average (EMA) at $4,369. The commodity, however, holds just above the 50.0% retracement of the $3,934.91–$4,694.41 leg. Moreover, momentum indicators are mixed, as the Relative Strength Index (RSI) at 47.86 has eased toward neutral and the Moving Average Convergence Divergence (MACD) shows a negative reading at -9.80, hinting at waning bullish pressure. This keeps the near-term bias tilted to the downside while the Gold remains under the EMA.
Meanwhile, immediate support is seen at the 50.0% retracement near $4,314, followed by the deeper Fibonacci levels at $4,225 (61.8%) and $4,097 (78.6%), before the structural floor at the prior swing low of $3,934. On the topside, initial resistance emerges at the 100-period EMA at $4,369, ahead of the 38.2% retracement at $4,404. A daily close above these levels would be needed to alleviate bearish pressure and open the way toward the higher resistance band at $4,515 and, ultimately, the cycle high area around $4,694.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.50% | 0.54% | 0.47% | 0.66% | 0.16% | 0.30% | -0.11% | |
| EUR | -0.50% | 0.06% | -0.02% | 0.16% | -0.34% | -0.20% | -0.60% | |
| GBP | -0.54% | -0.06% | -0.19% | 0.11% | -0.40% | -0.25% | -0.66% | |
| JPY | -0.47% | 0.02% | 0.19% | 0.22% | -0.33% | -0.17% | -0.57% | |
| CAD | -0.66% | -0.16% | -0.11% | -0.22% | -0.44% | -0.38% | -0.76% | |
| AUD | -0.16% | 0.34% | 0.40% | 0.33% | 0.44% | 0.15% | -0.33% | |
| NZD | -0.30% | 0.20% | 0.25% | 0.17% | 0.38% | -0.15% | -0.41% | |
| CHF | 0.11% | 0.60% | 0.66% | 0.57% | 0.76% | 0.33% | 0.41% |
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).
- AUD/JPY weakens to near 111.95 in Wednesday’s early European session.
- The negative tone of the cross remains intact; further consolidation cannot be ruled out with neutral RSI momentum.
- The first upside barrier emerges at 112.05; the initial support level to watch is 100.00.
The AUD/JPY cross trades in negative territory around 111.95 during the early European session on Wednesday. A lack of explicitly hawkish guidance from the Bank of Japan (BoJ) after the rate hike last week exerts some selling pressure on the Japanese Yen (JPY) against the Australian Dollar (AUD).
The BoJ last week decided to raise its policy rate by 25 basis points (bps) to 1.25%, its highest level since 1995, as widely expected. Nonetheless, the vote was 7-2 as board members Toichiro Asada and Ayano Sato dissented. Markets view the dissent from two policymakers as a warning that additional hikes may be harder to implement, undermining the JPY.
Markets are pricing in about a 30% chance that the Japanese central bank lifts its benchmark short-term rate to 1.50% in October, according to Bloomberg.
On the Aussie front, the Reserve Bank of Australia (RBA) Governor Michele Bullock said on Tuesday that supply shocks are difficult for monetary policy to deal with, adding that policy needs to address the second-round effects of such shocks on inflation.
The RBA is expected to raise its key interest rate at the September 28-29 policy meeting as surging energy prices crystallise upside risks to inflation, Bloomberg Economics said, warning of a possible further hike in November.
Money markets are pricing in about a 90% odds that the Australian central bank will hike by a quarter-percentage point to 4.6%next week, according to Bloomberg.
Yen rebound as BoJ rate check signals intervention readiness
Analysts at MUFG/BTMU highlight that the late-Friday rebound in the Yen was driven by reports that the BoJ had carried out a rate check during the New York session, “sending a clear signal that they are prepared to intervene again if the Yen continues to weaken.” This move, they suggest, marked a clear shift in market psychology, with the prospect of renewed official action helping to cap further downside in the currency.
Technical Analysis: AUD/JPY retains a negative outlook under the 100-day SMA
In the daily chart, AUD/JPY keeps a bearish near-term bias as spot holds beneath the Bollinger middle band and the 100-day moving average. Price is also well below the upper Bollinger band, suggesting the recent recovery is capped by layered resistance overhead, while the Relative Strength Index (14) around 49 stays neutral and hints at a lack of strong directional momentum.
On the topside, initial resistance emerges at the Bollinger middle band at 112.05, followed by the 100-day moving average at 112.85. A decisive break above this level could pave the way to the August 18 high of 113.61, en route to the July 27 high of 114.67 and then the upper Bollinger band near 115.10.
On the downside, the key support level for the cross is seen at the 100.00 psychological level. The September 14 low of 109.67 stands out as the next contention level. A breach of this level could expose the lower Bollinger band at 109.00.
(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.
- USD/CHF gains as the US Dollar strengthens as the Fed signals another potential rate hike before year-end.
- Switzerland’s Q2 2026 current account surplus expanded significantly to reach CHF 23.7 billion.
- The Swiss National Bank is widely expected to hold its benchmark rate steady at 0%.
USD/CHF gains ground after four days of losses, trading around 0.8220 during Asian hours on Wednesday. The currency pair appreciates as the US Dollar (USD) gains ground on the back of a hawkish policy outlook from the Federal Reserve (Fed).
Following a recent 25 basis point increase that brought the benchmark interest rate target to the 3.75%–4.00% range, Fed policymakers have signaled that another rate hike remains on the table before the end of the year. Financial markets are actively pricing in this trajectory, with the CME FedWatch Tool showing nearly an 89.2% probability of a December rate increase as traders turn their focus toward the preliminary US PMI data scheduled for release later on Wednesday.
In Switzerland, macroeconomic data highlighted a significantly widened current account surplus, which rose to CHF 23.7 billion in the second quarter of 2026 compared to a downwardly revised CHF 10.2 billion in Q2 2025. This expansion marks the largest current account surplus for the country since the first quarter of 2025.
Meanwhile, monetary policy expectations for Switzerland remain firmly dovish ahead of the Swiss National Bank's policy rate announcement on Thursday. Markets widely expect the SNB to hold its key interest rate steady at 0%, a consensus reinforced by a Swiss Bankers Association survey in which 100% of respondents predicted the central bank will keep rates at 0% through the remainder of the year.
USD/CHF momentum fades as UOB shifts to range-trading view
Analysts at UOB Group note that their stance on the Dollar turned constructive only recently, commenting that “we turned positive on USD one week ago.” They point out that the pair “soared to 0.8265,” and that as of last Thursday, with spot around 0.8250, they had cautioned that “while momentum remains strong, it is too early to tell whether it is sufficient for USD to break above 0.8300.” Since then, USD/CHF has eased back from the highs and, although their “strong support” at “0.8185 has not been breached yet,” UOB judges that “upward momentum has largely ended.” In their view, “USD has likely entered a range-trading phase,” with the pair “likely to trade between 0.8155 and 0.8255” over the coming one to three weeks.
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.
The preliminary reading of India’s HSBC Manufacturing Purchasing Managers Index (PMI) jumped to 55.7 in September versus 52.8 prior, the latest data published by S&P Global and HSBC Bank showed on Wednesday.
The India’s HSBC Services PMI climbed to 55.8 in September from the previous reading of 54.1, while the Composite PMI rose to 56.5 in September versus 54.3 prior.
Market reaction
The India's HSBC PMI data for August has little to no impact to the Indian Rupee (INR). The USD/INR pair is adding 0.04% on the day to 95.63, as of writing.
Indian economy FAQs
The Indian economy has averaged a growth rate of 6.13% between 2006 and 2023, which makes it one of the fastest growing in the world. India’s high growth has attracted a lot of foreign investment. This includes Foreign Direct Investment (FDI) into physical projects and Foreign Indirect Investment (FII) by foreign funds into Indian financial markets. The greater the level of investment, the higher the demand for the Rupee (INR). Fluctuations in Dollar-demand from Indian importers also impact INR.
India has to import a great deal of its Oil and gasoline so the price of Oil can have a direct impact on the Rupee. Oil is mostly traded in US Dollars (USD) on international markets so if the price of Oil rises, aggregate demand for USD increases and Indian importers have to sell more Rupees to meet that demand, which is depreciative for the Rupee.
Inflation has a complex effect on the Rupee. Ultimately it indicates an increase in money supply which reduces the Rupee’s overall value. Yet if it rises above the Reserve Bank of India’s (RBI) 4% target, the RBI will raise interest rates to bring it down by reducing credit. Higher interest rates, especially real rates (the difference between interest rates and inflation) strengthen the Rupee. They make India a more profitable place for international investors to park their money. A fall in inflation can be supportive of the Rupee. At the same time lower interest rates can have a depreciatory effect on the Rupee.
India has run a trade deficit for most of its recent history, indicating its imports outweigh its exports. Since the majority of international trade takes place in US Dollars, there are times – due to seasonal demand or order glut – where the high volume of imports leads to significant US Dollar- demand. During these periods the Rupee can weaken as it is heavily sold to meet the demand for Dollars. When markets experience increased volatility, the demand for US Dollars can also shoot up with a similarly negative effect on the Rupee.
- EUR/USD attracts sellers for the third straight day amid a combination of negative factors.
- The Fed’s hawkish tilt underpins the USD, while German political risks weigh on the Euro.
- The bearish technical setup supports prospects for an extension of the depreciating move.
The EUR/USD pair remains under some selling pressure for the third straight day, touching a fresh low since July 29, around the 1.1425 region, during the Asian session on Wednesday.
The US Dollar (USD) retains its bullish undertone amid the US Federal Reserve's (Fed) hawkish outlook and geopolitical risks. The shared currency, on the other hand, is pressured by rising political risks in Germany, which, to a larger extent, overshadow prospects for a further rate hike by the European Central Bank (ECB). This might continue to weigh on the EUR/USD pair and backs the case for an extension of the depreciating move.
From a technical perspective, last week's breakdown below the 100-day Simple Moving Average (SMA) support was seen as a key trigger for bearish traders. Moreover, spot prices remain below a series of Fibonacci retracements clustered overhead – the 61.8% retracement at 1.1474 and the 50.0% level at 1.1519. This reinforces the downside tone even as the Relative Strength Index (RSI) at 29.7 points to slightly overstretched conditions.
Meanwhile, the Moving Average Convergence Divergence (MACD) stays in negative territory and hints at persistent selling pressure, suggesting that any attempted recovery is likely to face a hurdle at the 61.8% retracement at 1.1474. This is followed by the 50.0% level at 1.1519 and the 100-day SMA at 1.1540, while higher hurdles emerge at the 38.2% retracement at 1.1563 and the 23.6% level at 1.1619 before the cycle high around 1.1708.
On the downside, immediate support appears at the 78.6% Fibo. retracement near 1.1410, ahead of the structural floor defined by the prior swing low around 1.1329.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
EUR/USD daily chart
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.51% | 0.55% | 0.46% | 0.67% | 0.17% | 0.33% | -0.10% | |
| EUR | -0.51% | 0.06% | -0.02% | 0.18% | -0.36% | -0.17% | -0.60% | |
| GBP | -0.55% | -0.06% | -0.21% | 0.12% | -0.40% | -0.23% | -0.65% | |
| JPY | -0.46% | 0.02% | 0.21% | 0.25% | -0.30% | -0.11% | -0.54% | |
| CAD | -0.67% | -0.18% | -0.12% | -0.25% | -0.44% | -0.36% | -0.76% | |
| AUD | -0.17% | 0.36% | 0.40% | 0.30% | 0.44% | 0.17% | -0.34% | |
| NZD | -0.33% | 0.17% | 0.23% | 0.11% | 0.36% | -0.17% | -0.43% | |
| CHF | 0.10% | 0.60% | 0.65% | 0.54% | 0.76% | 0.34% | 0.43% |
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).
Japanese Prime Minister Takaichi Sanae and US President Donald Trump have held a summit to enhance economic security partnership. The two leaders are in New York for a meeting of the United Nations General Assembly. Takaichi added that she had frank discussion with Trump on international criminal court.
Takaichi noted that Japan has been the largest investor in the US for seven consecutive years. The two leaders also affirmed their commitment to further strengthening bilateral economic ties. She further stated that economic-security cooperation has been advancing in areas such as AI, semiconductors, and critical minerals.
Market reaction
As of writing, the USD/JPY pair is up 0.11% on the day at 157.55.
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 fell in India on Wednesday, according to data compiled by FXStreet.
The price for Gold stood at 13,359.60 Indian Rupees (INR) per gram, down compared with the INR 13,399.23 it cost on Tuesday.
The price for Gold decreased to INR 155,823.70 per tola from INR 156,286.00 per tola a day earlier.
Unit measure | Gold Price in INR |
|---|---|
1 Gram | 13,359.60 |
10 Grams | 133,595.80 |
Tola | 155,823.70 |
Troy Ounce | 415,530.20 |
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.)
- WTI attracts sellers for the fifth straight day amid hopes for Iran diplomacy and easing supply concerns.
- offered to unblock the Strait of Hormuz as Saudi Arabia works to restore operations on an oil pipeline.
- The mixed technical setup warrants some caution for bearish traders and positioning for further losses.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – retains a negative bias for the fifth straight day on Wednesday, flirting with an over two-week low touched on Tuesday. The commodity trades near mid-$88.00s during the Asian session, down over 1% for the day, and seems vulnerable to slide further.
As Saudi Arabia works to restore operations on an oil pipeline to the Red Sea, hopes for a diplomatic resolution to end the US-Iran war and the reopening of the Strait of Hormuz help ease supply concerns. In fact, Iran reportedly offered to unblock the strategic waterway in return for a US military de-escalation. This adds to the optimism and continues to weigh on oil prices.
Meanwhile, US President Donald Trump told the UNGA that he faces a big decision on whether to make a deal with Iran or "annihilate" the Islamic Republic if the conflict went unresolved. Furthermore, tighter US sanctions intended to cripple Iranian aviation come into force on Wednesday, keeping the geopolitical risk premium in place and limiting losses for crude oil prices.
From a technical perspective, the black liquid is approaching the 50.0% Fibonacci retracement at $87.87, but holds comfortably above the 100-day simple moving average (SMA) at $84.97. This suggests that the near-term tone is neutral to slightly capped, though the broader uptrend framework remains intact. However, daily oscillators point to waning bullish momentum.
The Moving Average Convergence Divergence (MACD) has slipped deeper into negative territory, while the Relative Strength Index (RSI) at 46.8 has retreated below the midline. Hence, a break below the 50% Fibo. would expose the first line of support at $87.87, followed by a cluster of underlying demand around the 100-day SMA at $84.97 and the 61.8% Fibo. at $84.52.
A deeper pullback would make the commodity vulnerable to test the 78.6% level at $79.75 and the broader cycle floor near $73.67. On the topside, initial resistance emerges at the 38.2% Fibo. retracement at $91.23, ahead of a stronger barrier at the 23.6% retracement near $95.37, with the cycle high region around $102.07 marking a more distant cap.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
WTI daily chart
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
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