Forex News
- GBP/USD extends its downside to near 1.3300 in Wednesday’s Asian session.
- UK Finance Minister will deliver his first budget on Wednesday against a backdrop of rising global borrowing costs.
- The Fed is likely to leave its policy interest rate unchanged at its October meeting.
The GBP/USD pair extends the decline to around 1.3300 during the Asian trading hours on Wednesday. The British Pound (GBP) softens against the US Dollar (USD) amid cautious mood ahead of UK Budget and Federal Reserve (Fed) interest rate decision on Wednesday.
UK Finance Minister John Healey is set to present his first budget later in the day, facing mounting pressure to deliver measures that can ease the cost-of-living burden on households while providing support to businesses. Nonetheless, his options are limited by high government borrowing costs and the big tax increases implemented by his predecessor, Rachel Reeves.
"It's hard to be immune in an environment where global bond yields are going higher, but among major developed markets, the UK is looking like one of the cleanest dirty shirts out there," said Guillermo Felices, PGIM's global investment strategist.
The Fed is widely expected to leave its policy interest rate unchanged at the current target range of 3.75% to 4.0%, while signalling the probability of any December move. Traders will take more cues from Fed Chair Kevin Warsh’s speech for more clues on US interest rate outlook. Any hawkish remarks from Fed officials could lift the Greenback and act as a headwind for the major pair.
Markets are pricing in nearly 92.8% chance that the Fed will keep rates on hold at its October policy meeting, according to the CME FedWatch tool. The likelihood of US rate hike in December stands at 84.4%.
Pound softens as markets eye UK budget and key GBP/USD supports
Strategists at Scotiabank note that “caution ahead of Wednesday’s UK budget accounts for some of the GBP’s softness against the USD,” with “overnight GBPUSD vols… firmer, reflecting caution ahead of Chancellor Healey’s set-piece delivery tomorrow.” They add that “a budget that maintains fiscal credibility will likely be GBP-neutral at worst.” From a technical perspective, Scotiabank describes the outlook as “neutral/bearish,” highlighting that “the GBP retains a soft undertone versus the USD, driving spot below minor support at 1.3350/55.” This “leaves the October 19th low at 1.3300 exposed and lifts the risk of the pound easing back to the 1.3250/75 range to retrace a little more of its mid-month rebound,” although the bank expects that “modest GBP losses should entice support from bargain-hunters.”
Greene flags stalled wage disinflation, keeping GBP rate-cut hopes in check
BoE’s Greene scores 7.4/10 on FXS Speechtracker, exactly in line with the historic average, but the emphasis on stalled wage disinflation and greater risk of second-round effects marks a hawkish tilt at the margin. Remarks that wage disinflation has stalled above levels consistent with 2% inflation, alongside an economy showing “surprising resilience” and labor market slack potentially having peaked, argue against an imminent easing cycle and support GBP on the crosses.
By stressing the need to “proactively lean” against second-round inflation risks even as forward-looking data point to pay growth closer to 3.5%, Greene effectively downplays the comfort from moderating wage indicators. For FX, this combination of resilience and sticky wage dynamics suggests the Bank of England will be slower to cut than some peers, limiting downside for GBP and keeping rate differentials a modest tailwind.
Technical Analysis: GBP/USD maintains a bearish tone below the 100-day SMA
In the daily chart, GBP/USD holds below the 100-day simple moving average (SMA), which keeps the broader tone mildly bearish despite a modest recovery from recent lows. Price is consolidating just above the 20-day Bollinger SMA, suggesting nearby underlying demand, while the Relative Strength Index (14) around 47 stays below the 50 line, hinting that bullish momentum remains tentative.
On the topside, initial resistance is located at the 100-day SMA around 1.3390, with a further barrier at the upper Bollinger Band near 1.3415, where sellers may look to reassert control if the pair extends higher. On the downside, immediate support is seen at the mid-Bollinger band around 1.3285, followed by a more substantial cushion at the lower Bollinger Band near 1.3150, where a break would likely reinforce the prevailing bearish bias.
(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.
- Japanese Yen struggles as high crude oil prices weigh on Japan's energy-importing economy amid Israeli election uncertainty.
- Bank of Japan expects to hold interest rates steady this Friday, with markets pricing in a December hike.
- Federal Reserve is projected to maintain its target rate at 3.75%-4.0% today, while investors await signals for December.
USD/JPY continues its winning streak for the fourth consecutive day, trading around 158.00 during Asian hours on Wednesday. The pair appreciates as the Japanese Yen (JPY) faces challenges amid rising crude oil prices, which place renewed cost pressures on major energy-importing economies.
Oil prices rose as global financial markets tracked ongoing election results in Israel that could shift the course of the Middle East conflict. Exit polls suggest a tightly contested election, showing Prime Minister Benjamin Netanyahu tied with opposition leader Gadi Eisenkot, leaving neither bloc with a clear majority as counting continues. Despite the deadlock, the preliminary results point to diminishing support for Netanyahu, who has been a dominant force in Israeli politics while leading the country through nearly three years of conflict.
The Bank of Japan (BoJ) is widely expected to hold interest rates steady at its upcoming Friday policy meeting. This follows a cumulative 50 basis points of rate hikes delivered earlier in the year, as policymakers pause to assess the impact of previous tightening. However, market participants continue to anticipate another rate increase before the end of the year, with pricing strongly favoring a December hike.
Similarly, the Federal Reserve (Fed) is projected to keep its benchmark interest rate unchanged within the target range of 3.75% to 4.0% at Wednesday's decision. According to the CME FedWatch Tool, markets are pricing in a 92.8% probability of a rate hold for the October meeting. Investors will closely analyze remarks from Fed Chair Kevin Warsh for signals regarding the future policy trajectory, particularly as markets assign an 84.4% chance to a rate hike in December.
Technical Analysis:
In the daily chart, USD/JPY trades at 158.00, holding a constructive bullish bias as spot remains above both the short-term and medium-term Exponential Moving Averages (EMAs). The 50-period EMA at 157.96 and the nine-period EMA at 157.76 sit just below price, suggesting underlying dip-buying interest, while the 14-day Relative Strength Index (RSI) around 52 keeps momentum in neutral-to-positive territory rather than in overbought conditions.
On the downside, immediate support emerges at the 50-period EMA near 157.96, with the nine-period EMA at 157.76 reinforcing a nearby demand zone on any pullback. A deeper slide would find more remote structural backing in the broader FXS Fed Sentiment Index base around 127.51, although that lies far from current spot levels and serves mainly as a longer-term macro reference.
(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.
- AUD/NZD gains strong positive traction on Wednesday amid a combination of supporting factors.
- The hot Aussie consumer inflation figures lift RBA rate hike bets, boosting the AUD and the cross.
- The RBNZ’s surprise on-hold rate decision weighs heavily on the NZD, contributing to the move up.
The AUD/NZD cross catches aggressive bids during the Asian session on Wednesday, rallying to its highest level since March 2013 following the release of hot Australian consumer inflation figures and the Reserve Bank of New Zealand's (RBNZ) surprise on-hold rate decision. Spot prices, however, trim a part of strong intraday gains to the 1.2600 mark and currently trade around 1.2550, up nearly 1.5% for the day.
Earlier today, the New Zealand central bank unexpectedly held the official cash rate (OCR) unchanged at 2.75% in a 4–3 vote split, exerting heavy downward pressure on the New Zealand Dollar (NZD). In the accompanying policy statement, the RBNZ signaled that tighter monetary policy is likely to be required but remains conditional on the economic outlook, though it does little to offer any support to the NZD or hinder the AUD/NZD pair's strong intraday move up.
The Australian Dollar (AUD), on the other hand, strengthens across the board in reaction to hotter-than-expected domestic consumer inflation figures. Adding to this, the Reserve Bank of Australia (RBA) Governor Michele Bullock suggested that the central bank is less willing to ignore the energy-driven jump in prices, bolstering bets for an imminent interest rate hike in November and boosting the AUD. This further acts as a tailwind for the AUD/NZD cross and favors bulls.
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.02% | 0.05% | 0.02% | 0.09% | -0.08% | 1.47% | 0.11% | |
| EUR | -0.02% | 0.03% | -0.02% | 0.07% | -0.09% | 1.44% | 0.09% | |
| GBP | -0.05% | -0.03% | -0.04% | 0.03% | -0.14% | 1.42% | 0.06% | |
| JPY | -0.02% | 0.02% | 0.04% | 0.08% | -0.08% | 1.45% | 0.10% | |
| CAD | -0.09% | -0.07% | -0.03% | -0.08% | -0.16% | 1.37% | 0.03% | |
| AUD | 0.08% | 0.09% | 0.14% | 0.08% | 0.16% | 1.55% | 0.19% | |
| NZD | -1.47% | -1.44% | -1.42% | -1.45% | -1.37% | -1.55% | -1.32% | |
| CHF | -0.11% | -0.09% | -0.06% | -0.10% | -0.03% | -0.19% | 1.32% |
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 Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
- Australia’s annual CPI jumped to 4.3% in September, topping forecasts and exceeding the RBA’s 2–3% target.
- Traders boosted odds of a November RBA rate hike to 78% following the hotter-than-expected inflation report.
- RBA Governor Bullock warned inflation remains far too high, though gave no firm guidance on policy action.
AUD/JPY extends its gains for the fourth successive day, trading around 111.30 during Asian hours on Wednesday. The currency cross gains support as the Australian Dollar (AUD) receives support following the release of the domestic Consumer Price Index (CPI) report.
Australia’s CPI inflation rose to 4.3% year-over-year in September, up from 4.0% in August and slightly above the market forecast of 4.2%. On a monthly basis, the CPI climbed 0.8%, accelerating from the previous 0.4% increase and topping expectations of 0.7%. Meanwhile, the Trimmed Mean CPI, a key measure of underlying inflation, increased 0.3% month-over-month and advanced 3.7% annually.
This surge pushed inflation further beyond the Reserve Bank of Australia’s (RBA) 2–3% target band, significantly boosting expectations for an interest rate hike at the RBA's November 3 meeting. In response to the data, traders increased the probability of a November rate hike to 78%, up from 70% prior to the report. RBA Governor Bullock noted that inflation remains far too high and emphasized that overall demand continues to outpace supply, though she offered no explicit guidance regarding the upcoming board decision.
The Japanese Yen (JPY) faces headwinds against its major peers due to rising crude oil prices, which place renewed cost pressures on major energy-importing economies. Oil prices rose as global financial markets tracked ongoing election results in Israel that could shift the course of the Middle East conflict.
Exit polls suggest a tightly contested election, showing Prime Minister Benjamin Netanyahu tied with opposition leader Gadi Eisenkot, leaving neither bloc with a clear majority as counting continues. Despite the deadlock, the preliminary results point to diminishing support for Netanyahu, who has been a dominant force in Israeli politics while leading the country through nearly three years of conflict.
Looking ahead, market participants are keeping a close watch on key central bank meetings scheduled for this week. Both the Federal Reserve and the Bank of Japan are widely anticipated to hold interest rates steady, while investors evaluate the likelihood of potential policy adjustments in December.
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
- EUR/USD flatlines around 1.1125 in Wednesday’s early Asian session.
- Fed is anticipated to hold the benchmark rates steady at its October meeting.
- The Fed is set to announce its latest policy decision on Wednesday; the ECB is up on Thursday.
The EUR/USD pair holds steady near 1.1125 during the early Asian session on Wednesday. Traders prefer to wait on the sidelines and avoid taking big positions ahead of the US Federal Reserve (Fed) interest rate decision on Wednesday. Attention will shift to the European Central Bank (ECB) policy meeting later on Thursday.
The Fed is widely expected to keep the benchmark interest rate unchanged at the current target range of 3.75% to 4.0% on Wednesday. Traders will closely monitor on any hints that Fed Chair Kevin Warsh gives on their outlooks.
Markets are pricing in nearly 92.8% probability that the US central bank will keep rates on hold at its October policy meeting, according to the CME FedWatch tool. The chance of a US rate hike in December stands at 84.4%.
"USD risks skew lower on a hold: hawkish messaging is broadly neutral, while a dovish hold risks outsized USD weakness," said Bank of America analysts led by Mark Cabana.
Across the pond, the Euro (EUR) was on track to be the worst-performing developed-market currency in October, down 1.70%, against the US Dollar (USD). High energy costs, the volatility in French government bonds, and worries about France's fiscal position might exert some selling pressure on the shared currency in the near term.
The ECB is set to leave its key interest rates unchanged at its upcoming meeting on Thursday following a 25 bps hike in September.
Euro struggles to rebound as ECB caution contrasts with firm Fed expectations
Strategists at Societe Generale highlight that the Euro “really hasn’t been able to manage much of a bounce, regardless of shorts,” with “energy prices, fiscal concerns and social unrest” all weighing on the single currency. They add that “if the FOMC message (whatever that looks like in the brave new world) keeps December hike expectations alive, our bias is to remain dollar-positive, and unless the ECB is very hawkish, European economic fundamentals will weigh.”
Warsh flags investment surge and AI demand risks but avoids policy pre-commitment
Fed Chair Warsh delivered a moderately constructive but slightly less impactful message, with the FXS Speechtracker score of 5.6/10 coming in below the 6.1/10 established baseline. The admission of being "over-scarred from the global financial crisis" underscores a cautious bias on financial stability even as Warsh highlights structural growth and an investment surge, reinforcing a watchful stance rather than a clear hawkish or dovish pivot. Emphasis on not pre-judging upcoming meetings and on AI’s uncertain near-term employment impact points to data dependence and a reluctance to signal a preset policy path.
The FXS Fed Sentiment Index was unchanged on the day, with a 0.00-point move leaving the index at a firmly hawkish 127.51, signaling that the speech broadly conformed to existing expectations rather than shifting the policy narrative. In combination with the middling FXS Speechtracker score, the stable FXS Fed Sentiment Index suggests that markets see Warsh’s comments as validating the current hawkish bias without adding fresh impetus for Dollar repricing.
Technical Analysis: EUR/USD retains a negative outlook below the 100-day SMA
In the daily chart, EUR/USD remains under clear bearish pressure, holding below the 20-day simple moving average (SMA) from the Bollinger Bands and well beneath the 100-day moving average, which together frame a dominant topside cap. Price is also lodged just under the lower Bollinger Band, underscoring persistent downside bias, while the Relative Strength Index (RSI) at 30.3 hovers near oversold territory, hinting that while bears are in control, the downside could be prone to intermittent corrective bounces.
On the topside, immediate resistance is located at the lower Bollinger Band around 1.1130, with additional barriers at the Bollinger mid-line near 1.1205 and the upper band at 1.1280, ahead of a more strategic hurdle at the 100-day moving average around 1.1440. With no meaningful support levels defined by the current indicator set below spot, any further weakness would leave the pair vulnerable to exploring fresh lows, while only a recovery back above the 20-day SMA would start to ease the prevailing bearish tone.
(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.
- NZD/USD weakens sharply after the RBNZ unexpectedly decided to leave rates unchanged.
- Hawkish Fed bets and geopolitical risk underpin the USD, further weighing on spot prices.
- Traders now look to the RBNZ’s post-meeting presser ahead of the key FOMC rate decision.
The NZD/USD pair comes under intense selling pressure on Wednesday, dropping below the 0.5600 mark during the Asian session, with bears now eyeing the monthly low following the Reserve Bank of New Zealand (RBNZ) rate decision.
The central bank unexpectedly held its Official Cash Rate (OCR) at the conclusion of the October policy meeting, defying a broad consensus of a 25 basis points (bps) rate hike and weighing heavily on the New Zealand Dollar (NZD). Apart from this, the prevailing US Dollar (USD) buying interest, bolstered by persistent geopolitical uncertainties and hawkish Federal Reserve (Fed) expectations, exerts additional downward pressure on the NZD/USD pair.
Traders now look forward to RBNZ Anna Breman's comments during the post-meeting press conference for some impetus. Market attention will then shift to the outcome of a two-day FOMC meeting, due later during the US session, which will be looked to for more cues about the Fed's future policy path. Apart from this, further developments surrounding the Middle East crisis will play a key role in influencing the USD and driving the NZD/USD pair.
NZD/USD daily chart
Technical Analysis
The NZD/USD pair maintains a bearish near-term bias beneath a descending 100-day Simple Moving Average (SMA) near 0.5767 and below all visible Fibonacci retracement levels of the latest downswing. The inability to reclaim the 23.6% retracement at 0.5663 leaves spot prices entrenched in the lower end of its recent range, suggesting sellers retain control while any bounces are likely to face supply into clustered overhead levels.
On the topside, initial resistance is located at the 23.6% Fibo. retracement at 0.5663, followed by the 38.2% level at 0.5725 and the 100-day SMA at 0.5767, with the 50.0% retracement just above at 0.5775 reinforcing this broader cap. Further up, the 61.8% retracement at 0.5825 and higher Fibonacci barriers at 0.5895 and 0.5986 are expected to limit any more aggressive recovery attempts, while on the downside, the recent cycle low area around 0.5564 acts as the next key support to watch.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator
RBNZ Interest Rate Decision
The Reserve Bank of New Zealand (RBNZ) announces its interest rate decision after each of its seven scheduled annual policy meetings. If the RBNZ is hawkish and sees inflationary pressures rising, it raises the Official Cash Rate (OCR) to bring inflation down. This is positive for the New Zealand Dollar (NZD) since higher interest rates attract more capital inflows. Likewise, if it reaches the view that inflation is too low it lowers the OCR, which tends to weaken NZD.
Read more.Last release: Wed Oct 28, 2026 01:00
Frequency: Irregular
Actual: 2.75%
Consensus: 3%
Previous: 2.75%
Source: Reserve Bank of New Zealand
The Reserve Bank of New Zealand (RBNZ) holds monetary policy meetings seven times a year, announcing their decision on interest rates and the economic assessments that influenced their decision. The central bank offers clues on the economic outlook and future policy path, which are of high relevance for the NZD valuation. Positive economic developments and upbeat outlook could lead the RBNZ to tighten the policy by hiking interest rates, which tends to be NZD bullish. The policy announcements are usually followed by interim Governor Christian Hawkesby's press conference.
- WTI advances as Israel's election yielded a tight deadlock between Netanyahu and Eisenkot.
- Regional diplomacy picked up with Saudi, Pakistani, Turkish, and Iranian leadership meetings.
- Houthi missile strikes on Saudi Arabia's largest oil refinery further heightened supply risk concerns.
West Texas Intermediate (WTI) oil price rises after two days of losses, trading around $100.30 per barrel during Asian hours on Wednesday. Crude oil prices advanced as global markets closely monitored election results in Israel that could alter the trajectory of the ongoing Middle East conflict.
Exit polls indicated a tight race, showing Prime Minister Benjamin Netanyahu tied with opposition leader Gadi Eisenkot, with neither bloc securing a majority as vote counting continues. Despite the deadlock, the results point to weakening support for Netanyahu, a dominant figure in Israeli politics for decades who has guided the country through nearly three years of continuous conflict.
Meanwhile, markets assessed renewed diplomatic efforts across the region following Monday's meetings between Iranian leaders and officials from Saudi Arabia, Pakistan, and Turkey. Adding to the diplomatic momentum, Iran’s Supreme Leader Mojtaba Khamenei called for an end to the current state of "neither war nor peace."
However, the broader outlook for peace remains highly uncertain due to escalating violence from Yemen's Iran-aligned Houthis. The group renewed attacks on key oil producer Saudi Arabia, announcing on Tuesday that they had struck the kingdom's largest oil refinery, Ras Tanura, using a ballistic missile.
Geopolitical brinkmanship around Iran keeps Brent risk premium elevated
According to analysts at Commerzbank, the geopolitical backdrop for Brent remains highly charged, with US President Donald Trump having recently threatened Iran, saying he would soon decide either to make a deal or to “finish it off.” The bank warns that “new US attacks on Iran could take place following the US mid-term elections next week,” adding that the outcome of today’s parliamentary elections in Israel could also prove pivotal for the trajectory of the conflict. Should Israeli Prime Minister Benjamin Netanyahu be returned to office, Commerzbank cautions he “might attempt to achieve regime change in Iran,” a scenario that would further entrench the risk premium already embedded in oil prices.
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.
- AUD/USD gains positive traction for the second straight day, though it lacks follow-through.
- The hot Australian CPI print lifts RBA rate hike bets and provides a goodish boost to the AUD.
- The USD advances to a two-week high and caps the pair ahead of the crucial FOMC decision.
The AUD/USD pair attracts buyers for the second straight day on Wednesday, rising to a fresh high since September 23, near the 0.7050-0.7055 region during the Asian session following the release of hot Australian consumer inflation figures. Spot prices now seem to have confirmed a breakout through the 100-day Simple Moving Average (SMA) pivotal resistance, though bulls might refrain from placing aggressive bets and opt to wait for the outcome of a two-day FOMC meeting.
The Australian Bureau of Statistics (ABS) reported that the headline Consumer Price Index (CPI) rose 0.8% in September, compared to 0.4% in the previous month and consensus estimates of 0.7%. Adding to this, the yearly rate accelerated from 4.0% in August to 4.3% during the reported month, coming in above forecast for a 4.2% print. Moreover, the annual trimmed mean inflation remained above the Reserve Bank of Australia's (RBA) 2-3% target and reaffirmed bets for an imminent interest rate hike in November, which, in turn, provides a modest boost to the Australian Dollar (AUD).
The US Dollar (USD), on the other hand, advances to a two-week high amid the growing acceptance that the Federal Reserve (Fed) will raise borrowing costs again by the year-end amid inflation risks stemming from elevated oil prices. Furthermore, persistent geopolitical uncertainties assist the safe-haven buck to gain positive traction for the fourth consecutive day, capping the upside of the AUD/USD pair. The market focus now shifts to the highly anticipated FOMC rate decision, due to be announced later during the US session, which will play a key role in influencing USD demand.
The US central bank is widely expected to leave interest rates unchanged. Hence, investors will closely scrutinize the accompanying policy statement and Fed Chair Kevin Warsh's comments during the post-meeting press conference for more cues about the future policy path. In the meantime, the aforementioned supportive fundamental backdrop seems tilted in favor of AUD/USD bulls, suggesting that any meaningful corrective pullback is more likely to be bought into and remain limited.
AUD/USD daily chart
Technical Analysis
The AUD/USD pair hovers just above the 100-day Simple Moving Average (SMA) while capped by a dense Fibonacci retracement band overhead. The recovery from recent lows is losing momentum as price holds below the 50% retracement at 0.7066 and the 61.8% retracement at 0.7106, keeping the broader tone neutral to slightly bearish despite the nearby moving average support.
On the downside, initial support is seen at the 100-day SMA at 0.7033, with the 38.2% retracement at 0.7025 reinforcing this floor. A loss of this cluster would expose the 23.6% retracement at 0.6975, ahead of a deeper slide toward the structural base around 0.6893.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator
Consumer Price Index (YoY)
The Consumer Price Index (CPI), released by the Australian Bureau of Statistics on a monthly basis, measures the changes in the price of a comprehensive basket of goods and services acquired by household consumers. The indicator is the primary measure of headline inflation after a new methodology was applied to transition from quarterly to monthly readings, applying to data from April 2024 onwards. The YoY reading compares prices in the reference month to the same month a year earlier. A high reading is seen as bullish for the Australian Dollar (AUD), while a low reading is seen as bearish.
Read more.Last release: Wed Oct 28, 2026 00:30
Frequency: Monthly
Actual: 4.3%
Consensus: 4.2%
Previous: 4%
Source: Australian Bureau of Statistics
On Wednesday, the People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead at 6.7165 compared to the previous day's fix of 6.7171 and 6.6734 Reuters estimate.
PBOC FAQs
The primary monetary policy objectives of the People's Bank of China (PBoC) are to safeguard price stability, including exchange rate stability, and promote economic growth. China’s central bank also aims to implement financial reforms, such as opening and developing the financial market.
The PBoC is owned by the state of the People's Republic of China (PRC), so it is not considered an autonomous institution. The Chinese Communist Party (CCP) Committee Secretary, nominated by the Chairman of the State Council, has a key influence on the PBoC’s management and direction, not the governor. However, Mr. Pan Gongsheng currently holds both of these posts.
Unlike the Western economies, the PBoC uses a broader set of monetary policy instruments to achieve its objectives. The primary tools include a seven-day Reverse Repo Rate (RRR), Medium-term Lending Facility (MLF), foreign exchange interventions and Reserve Requirement Ratio (RRR). However, The Loan Prime Rate (LPR) is China’s benchmark interest rate. Changes to the LPR directly influence the rates that need to be paid in the market for loans and mortgages and the interest paid on savings. By changing the LPR, China’s central bank can also influence the exchange rates of the Chinese Renminbi.
Yes, China has 19 private banks – a small fraction of the financial system. The largest private banks are digital lenders WeBank and MYbank, which are backed by tech giants Tencent and Ant Group, per The Straits Times. In 2014, China allowed domestic lenders fully capitalized by private funds to operate in the state-dominated financial sector.
The Reserve Bank of New Zealand (RBNZ) kept the Official Cash Rate (OCR) unchanged at 2.75% after concluding the October monetary policy meeting on Wednesday.
The decision surprised markets, which had expected the central bank to raise the OCR by 25 basis points (bps).
Summary of the RBNZ Monetary Policy Review (MPR)
All committee members concur on overall inflation outlook.
Global factors contributing to inflation pressures.
Committee agreed stronger monetary policy likely needed.
Committee agrees tighter monetary policy probably needed, depends on economic outlook.
Members varied in emphasis on risks and timing of monetary policy response.
Members agreed on inflation forecast, differed on risk weightings.
New Zealand’s recovery may be stronger than expected but could lose momentum if global environment weakens.
Committee focused on bringing inflation back to 2 percent target midpoint over medium term.
Minutes of the RBNZ interest rate meeting
More OCR hikes probable, but dependent on economic outlook.
Four members Anna Breman, Carl Hansen, Prasanna Gal, Rebecca Williams vote to hold OCR, three members Paul Conway, Hayley Gourley, Karen Silk back increase.
Ongoing higher refined fuel prices and currency depreciation could risk greater indirect inflation effects.
Risk inflation entrenches before conventional expectations adjust despite previous two OCR hikes.
Certain domestic financial conditions ease amid lower exchange rate and decline in some term lending rates.
Committee focuses on medium-term inflation outlook.
NZD/USD reaction to the RBNZ interest rate decision
The New Zealand Dollar (NZD) has come under intense selling pressure in an immediate reaction to the RBNZ interest rate decision. The NZD/USD pair currently trades at 0.5600, down 1.46% on the day.
New Zealand Dollar Price This week
The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies this week. New Zealand Dollar was the weakest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.84% | 0.53% | 0.55% | 0.08% | 0.03% | 1.79% | 0.66% | |
| EUR | -0.84% | -0.33% | -0.32% | -0.81% | -0.87% | 0.88% | -0.24% | |
| GBP | -0.53% | 0.33% | -0.06% | -0.48% | -0.54% | 1.25% | 0.06% | |
| JPY | -0.55% | 0.32% | 0.06% | -0.41% | -0.57% | 1.26% | 0.03% | |
| CAD | -0.08% | 0.81% | 0.48% | 0.41% | -0.12% | 1.61% | 0.55% | |
| AUD | -0.03% | 0.87% | 0.54% | 0.57% | 0.12% | 1.75% | 0.44% | |
| NZD | -1.79% | -0.88% | -1.25% | -1.26% | -1.61% | -1.75% | -1.12% | |
| CHF | -0.66% | 0.24% | -0.06% | -0.03% | -0.55% | -0.44% | 1.12% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).
This section below was published on October 27 at 20:58 GMT as a preview of the Reserve Bank of New Zealand (RBNZ) interest rate decision.
- RBNZ expected to raise OCR to 3%, with markets fully pricing hike.
- New Zealand inflation remains elevated at 3.7%, supporting further tightening.
- NZD/USD faces resistance at 0.5748–0.5769, with 0.5600 as key support.
On Wednesday, October 28 at 01:00 GMT, the Reserve Bank of New Zealand (RBNZ), led by Governor Anna Breman, is expected to raise the Overnight Cash Rate (OCR) by 25 basis points, from 2.75% to 3%, as money markets price in a 100% chance.
RBNZ guidance in focus after a 100% chance of a rate hike
This would be the third-rate hike by the RBNZ, while the odds for another hike in December are nearly 50%.
In the September meeting, the Committee reached a consensus to increase the OCR, agreeing unanimously to remove monetary stimulus to drive inflation toward the 2% goal while supporting growth and the labour market. This decision was made to reduce the risk of more aggressive rate adjustments while maintaining an open mind regarding future OCR adjustments.
Of note, a rate hike would bring the OCR closer to the RBNZ's neutral range, with Governor Breman saying at a press conference following the decision that the committee is moving rates towards neutral while remaining accommodative.
Furthermore, Breman added that there will likely be a further increase in OCR, and they will assess the impact of the hikes already implemented.
Overall, this suggests the central bank is leaning towards further rate increases, though the timing remains uncertain.
Recent data suggest there is scope for further rate increases, as New Zealand GDP in Q2 exceeded forecasts at 2.6% YoY against estimates of 2.3%. Meanwhile, CPI for Q3 slowed and printed softer than expected at 3.7% YoY, beneath forecasts of 3.8%, but still was above the RBNZ’s 2% inflation objective.
What are the implications for the NZD/USD?
Currently, the NZD/USD sits comfortably at the bottom of the day’s trading range of 0.5675-0.5708, with traders waiting for a one-two punch reaction, as they are also eyeing the Federal Reserve’s decision.
If the RBNZ leans hawkish, a move to the confluence of the 50-day and 100-day Simple Moving Averages (SMAs), each at 0.5748 and 0.5769, respectively, is on the cards. If the Kiwi clears that area, a potential move towards 0.5800 is likely.
On the other hand, a dovish signal from the RBNZ could pave the way to test 0.5650 and the psychologically important 0.5600 level, guarded by traders, after trading above and below it for at least 14 days. On further weakness, the year-to-date (YTD) low of 0.5564 will be in play.
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.
Economic Indicator
RBNZ Interest Rate Decision
The Reserve Bank of New Zealand (RBNZ) announces its interest rate decision after each of its seven scheduled annual policy meetings. If the RBNZ is hawkish and sees inflationary pressures rising, it raises the Official Cash Rate (OCR) to bring inflation down. This is positive for the New Zealand Dollar (NZD) since higher interest rates attract more capital inflows. Likewise, if it reaches the view that inflation is too low it lowers the OCR, which tends to weaken NZD.
Read more.Next release: Wed Oct 28, 2026 01:00
Frequency: Irregular
Consensus: 3%
Previous: 2.75%
Source: Reserve Bank of New Zealand
The Reserve Bank of New Zealand (RBNZ) holds monetary policy meetings seven times a year, announcing their decision on interest rates and the economic assessments that influenced their decision. The central bank offers clues on the economic outlook and future policy path, which are of high relevance for the NZD valuation. Positive economic developments and upbeat outlook could lead the RBNZ to tighten the policy by hiking interest rates, which tends to be NZD bullish. The policy announcements are usually followed by interim Governor Christian Hawkesby's press conference.
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