Forex News
- EUR/USD breaks 1.1150 to a 17-month low just above 1.1100 on US inflation.
- US core prices rise 0.3% in September, and October Fed hike odds jump.
- Euro area inflation figures are due Friday, the day Fed Chair Warsh speaks.
1.1150 had stopped EUR/USD's fall four times since October 5, and it gave way on hotter US inflation figures, with the pair dropping to just above 1.1100, its lowest since May 2025. EUR/USD went through the level in the first five-minute bar after the release, made its low later in the session and is back at the old floor, having recovered about half of the drop.
Core US consumer prices, which exclude food and energy, rose 0.3% in September against a 0.2% forecast, with the headline rate at 3.7% for the year. Traders' odds on an October 28 Fed hike rose from about 20% before the release to about 50% after it, and have slipped since as Treasury yields fell back.
The European Central Bank (ECB) pays banks 2.50% on their deposits, against a Fed rate of 3.75%-4.00%. National Bank of Belgium Governor Wunsch said on Wednesday the ECB will probably have to raise rates again, and ECB President Lagarde said she isn't yet seeing energy costs spread into wages and other prices. The Fed decides on October 28 and the ECB on October 29, so a hike from each would leave the gap between the two rates exactly where it started.
On the calendar
Euro area industrial production for August comes out on Thursday, forecast flat after a 0.1% fall in July, and the final September inflation figures follow on Friday, with core prices forecast to hold at 2.5% for the year. Both feed into the ECB's October 29 decision, the European side of the gap.
US producer prices are due on Thursday, with the core measure forecast to slow to 4.4% for the year from 4.6%, alongside retail sales and the New York and Philadelphia Fed factory surveys. Fed Chair Warsh speaks on Friday, the last weekday before Fed officials stop commenting ahead of the October 28 decision.
On the charts
The 50-day Exponential Moving Average (EMA), just above 1.1400, and the 200-day EMA, just above 1.1500, are both overhead, and EUR/USD has been under both since mid-September. Daily momentum had been oversold for a month and had only just climbed out of it before the release.
EUR/USD daily chart
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.
Federal Reserve (Fed) President Mary Daly said on Wednesday that the central bank will probably need to increase short-term interest rates further to rein in too-high inflation. However, she also signaled there's no need to do so at the Fed's October 27-28 meeting.
Key quotes
CPI indicates gas prices boosting headline inflation, core inflation remains stubborn as anticipated.
More rate hikes likely, timing still under consideration.
Feels rash to respond when there is time to decide carefully.
Uncertain if inflation will ease as shocks fade or worsen if shocks continue.
No urgency, better to be thoughtful and deliberate.
Risks to above-target inflation remain high, steady labor market allows focus on price stability.
Reassuring that after markets' initial robust reaction to CPI data, trading is calmer.
Markets grasp Fed's response.
Fed has responsibility to communicate clearly, be transparent, accountable.
Market reaction
At the press time, the US Dollar Index (DXY) is up 0.26% on the day to trade at 102.47.
Daly stresses patience on rates but keeps Fed firmly hawkish
Fed’s Daly delivers a moderately hawkish message, with a FXS Speechtracker score of 6.8/10, slightly above the 6.1/10 historical average and signaling a firmer stance relative to the established baseline. The emphasis that headline CPI is being lifted by gas prices while core inflation remains “stubborn,” alongside the remark that more rate hikes are likely but timing should be “thoughtful and deliberate,” underscores a cautious but tightening bias that supports the Dollar. The focus on persistent above-target inflation risks, a steady labor market, and the reassurance that markets understand the Fed’s reaction function reinforces a message of sustained vigilance on price stability rather than imminent policy easing.
The FXS Fed Sentiment Index slipped by 0.84 points to 128.17, indicating a modest pullback in perceived hawkishness despite remaining well above the neutral 100 mark. This keeps the Fed firmly in hawkish territory, suggesting that while the immediate rate-hike urgency has eased slightly, Daly’s communication as captured by the FXS Speechtracker still supports a bias toward tighter policy rather than a dovish pivot.
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.
- AUD/USD slips 0.17% to 0.6971 after failing above 0.7000.
- US inflation accelerates to 3.7%, lifting October Fed hike odds to 42%.
- Australian employment report looms, with unemployment expected to remain at 4.6%.
The Aussie Dollar ends Wednesday’s session with a 0.17% loss against the US Dollar, as high US inflation sent US yields higher amid expectations that the Federal Reserve may hike rates late this month. The AUD/USD trades at 0.6971 after hitting a high above 0.7000.
AUD/USD retreats on rising US yields; Australian jobs data looms
The US Consumer Price Index (CPI) in September expanded by 3.7% YoY, exceeding estimates and August’s 3.4%; underlying CPI also climbed to 2.6% YoY, again above forecasts and the prior month’s 2.4%. The reasons behind the jump in US inflation are high energy prices, shelter, owner's equivalent rent, recreation, education costs and a jump in used car and truck prices.
The report contradicted John Williams, the President of the New York Fed, who pencilled in just one more hike this year, and zero in 2027.
Meanwhile, Chicago’s Fed Goolsbee remained hawkish, saying that “CPI data was discouraging,” adding that hot CPI is “unacceptable, while Richmond Fed President Thomas Barkin said that CPI ran too hot, and that for October’s meeting, he is open.
Given the backdrop, money markets increased their bets for an October rate hike, with odds standing at 42%, up from 22% a day ago, and reached a 60% immediately after the data release.
In Australia, the economic docket will feature September’s jobs report. The economy is expected to have created 20K jobs, almost 20K below August's 39.5K, while the unemployment rate is forecast to remain steady at 4.6% at a five-year high.
Regarding the jobs market, the Reserve Bank of Australia (RBA) mentioned that “conditions have eased broadly as expected in recent months, and labour market leading indicators are broadly stable.”
At her post-meeting press conference, RBA Governor Michele Bullock said “unemployment rate still low historically,” and that she thinks “the labor market is a little bit tight.”
The US economic calendar will feature the Producer Price Index (PPI), Retail Sales, Initial Jobless Claims, and further Fed speeches.
AUD/USD Price Forecast: Technical outlook
In the daily chart, AUD/USD trades at 0.6974, keeping a bearish near-term tone as spot holds beneath a dense band of upward-sloping trend lines and the latest triple simple moving average at 0.7085. Price has slipped away from the 0.70 handle, while the Relative Strength Index (14) at 40.8 stays below the midline, hinting at waning upside momentum rather than outright oversold conditions.
On the downside, immediate support is only seen at the most recent upward trend-line reaction around 0.6946, where sellers could pause before targeting lower levels. On the topside, initial resistance is clustered in the 0.7085–0.7087 region, defined by the triple SMA and nearby rising trend lines, followed by additional barriers at 0.7111 and 0.7118, with a more prominent horizontal cap emerging at 0.7198.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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 British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.30% | 0.43% | -0.05% | 0.10% | 0.14% | 0.37% | 0.18% | |
| EUR | -0.30% | 0.13% | -0.35% | -0.19% | -0.18% | 0.02% | -0.12% | |
| GBP | -0.43% | -0.13% | -0.48% | -0.35% | -0.30% | -0.08% | -0.25% | |
| JPY | 0.05% | 0.35% | 0.48% | 0.17% | 0.20% | 0.43% | 0.26% | |
| CAD | -0.10% | 0.19% | 0.35% | -0.17% | 0.04% | 0.26% | 0.08% | |
| AUD | -0.14% | 0.18% | 0.30% | -0.20% | -0.04% | 0.23% | 0.03% | |
| NZD | -0.37% | -0.02% | 0.08% | -0.43% | -0.26% | -0.23% | -0.17% | |
| CHF | -0.18% | 0.12% | 0.25% | -0.26% | -0.08% | -0.03% | 0.17% |
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).
- The Australian Unemployment Rate is set to remain at a five-year high of 4.6% in September.
- Australia’s Employment Change is expected to have added 20K jobs in the month, after gaining 39.5K in August.
- AUD/USD battles the 0.7000 psychological barrier as RBA flags more rate hikes.
The Australian Bureau of Statistics (ABS) will publish the September employment report on Thursday at 00:30 GMT.
The Australian Dollar (AUD) could see a big reaction to the jobs data if the numbers significantly alter market expectations for another interest rate hike by the Reserve Bank of Australia (RBA) later this year.
What to expect from the Australian Unemployment Rate?
The Australian economy is expected to have added 20,000 jobs in September. Net employment rose by 39,500 in August, rebounding from a July decline of 15,900.
Meanwhile, the Unemployment Rate is expected to remain at a five-year high of 4.6% in the same period. Details of the report are likely to show that the Participation Rate ticked a tad lower to 67% from 67.1% prior.
Market participants will also watch the breakdown of full-time and part-time positions.
A potential weakness in the labor market and a slowdown in wage growth are unlikely to temper bets for at least one more rate hike this year. Markets are currently pricing in about a 33% chance that the RBA will raise rates in November, according to the Australian Securities Exchange (ASX) RBA Rate Tracker.
The Australian central bank raised interest rates for the fourth time this year in September to a 15-year high of 4.6%, and flagged further tightening, if needed.
On the labor market, the RBA said that its “conditions have eased broadly as expected in recent months, and labour market leading indicators are broadly stable.”
RBA Governor Michele Bullock, during her post-monetary policy meeting press conference, emphasized that “unemployment rate still low historically,” adding that she still thinks “the labor market is a little bit tight.”
Soon after the September policy decision, the Australian Consumer Price Index (CPI) data was published, showing that the trimmed mean measure of core inflation increased by 0.2% month-on-month in August, leaving the annual pace steady at 3.6% for a third consecutive month.
With inflation showing no signs of easing, despite a run of rate increases this year, further tightening remains on the table unless the labour market weakens significantly.
How could the Australian employment report affect AUD/USD?
An unexpected dip in the Unemployment Rate alongside stronger-than-expected job gains could boost November RBA rate-hike bets, provide the much-needed impetus to the currency and strengthen the AUD/USD recovery beyond the 0.7000 level.
Conversely, a surprise rise in unemployment, combined with weaker job growth, could prompt markets to price out a November interest rate increase, weighing heavily on the Aussie.
Dhwani Mehta, Asian Session Lead Analyst at FXStreet, highlights key technical levels for trading AUD/USD following the labor data:
“AUD/USD keeps a bearish near-term tone as spot holds beneath a dense cluster of moving averages. The 21-day Simple Moving Average (SMA) at 0.7013 is the first cap just overhead, while the 100-day and 200-day SMAs at 0.7044 and 0.7042, respectively, reinforce a broader topside barrier, with the 50-day SMA further up at 0.7086. The Relative Strength Index (14) around 47 has recovered from oversold territory but still hints at only modest momentum, suggesting that bounces are likely to be limited while price remains under these key trend markers.”
“On the downside, with no clear moving-average or structural supports defined by the provided dataset, traders will likely look to recent lows near 0.6950 and the psychological 0.6900 mark as potential demand zones.”
RBA FAQs
The Reserve Bank of Australia (RBA) sets interest rates and manages monetary policy for Australia. Decisions are made by a board of governors at 11 meetings a year and ad hoc emergency meetings as required. The RBA’s primary mandate is to maintain price stability, which means an inflation rate of 2-3%, but also “..to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people.” Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will strengthen the Australian Dollar (AUD) and vice versa. Other RBA tools include quantitative easing and tightening.
While inflation had always traditionally been thought of as a negative factor for currencies since it lowers the value of money in general, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Moderately higher inflation now tends to lead central banks to put up their interest rates, which in turn has the effect of attracting more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in the case of Australia is the Aussie Dollar.
Macroeconomic data gauges the health of an economy and can have an impact on the value of its currency. Investors prefer to invest their capital in economies that are safe and growing rather than precarious and shrinking. Greater capital inflows increase the aggregate demand and value of the domestic currency. Classic indicators, such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can influence AUD. A strong economy may encourage the Reserve Bank of Australia to put up interest rates, also supporting AUD.
Quantitative Easing (QE) is a tool used in extreme situations when lowering interest rates is not enough to restore the flow of credit in the economy. QE is the process by which the Reserve Bank of Australia (RBA) prints Australian Dollars (AUD) for the purpose of buying assets – usually government or corporate bonds – from financial institutions, thereby providing them with much-needed liquidity. QE usually results in a weaker AUD.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the Reserve Bank of Australia (RBA) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the RBA stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It would be positive (or bullish) for the Australian Dollar.
- GBP/USD dips under 1.3150, an 11-month low, then climbs back near 1.3200.
- US prices rise 3.7% on the year, and Treasury yields jump before reversing.
- UK August GDP is forecast to contract, and BoE Governor Bailey speaks Friday.
Hotter US inflation figures knocked GBP/USD to its lowest since late November 2025, and the pair is back near 1.3200, the floor of its range since late September. It dropped from just above 1.3250 on the release to just under 1.3150 at the low, and has recovered about two-fifths of that since.
US consumer prices were up 3.7% on the year in September against a 3.6% forecast, and the 10-year Treasury yield jumped from about 5.19% to about 5.33% on the release. The yield has since come back to about 5.20%, but the Pound has lost more against the Dollar than any other major currency on Wednesday.
Bank of England (BoE) Chief Economist Pill voted with external members Greene and Mann in September to raise the UK's Bank Rate from 3.75%. On Wednesday he said he's a bit sceptical of the four hikes markets price over the next year, which leaves traders expecting more from the BoE than one of its keenest advocates of a hike does. The UK side of the rate gap GBP/USD follows was being talked down before the US release pushed the other side up.
On the calendar
The UK's Gross Domestic Product (GDP) figure for August, due on Thursday, is forecast to show a 0.1% contraction after 0.4% growth in July, with factory output forecast down 0.1% after a 0.9% rise. Chief Economist Pill speaks again on Thursday and BoE Governor Bailey on Friday, ahead of the November 5 decision. A shrinking economy would make the four hikes in market prices harder to defend.
US retail sales, due on Thursday with producer prices and weekly jobless claims, are forecast to rise 0.3% in September after a 1.2% jump, and Fed Chair Warsh is due to speak on Friday. Traders already put a December Fed hike near 95%, so the US figures bear mostly on whether it arrives on October 28 instead.
On the charts
Wednesday's low went just under the late-June low, where the climb to the August 21 high just under 1.3700 began, so GBP/USD has given back that whole rally. The pair has traded beneath both its 50-day Exponential Moving Average (EMA), now near 1.3350, and its 200-day EMA, short of 1.3400, since September 17, and both averages are falling.
GBP/USD daily chart
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.
- GBP/JPY rejects 210.31, reversing its earlier descending trendline breakout.
- RSI remains bearish as fading momentum favors further downside.
- Break below 208.50 exposes 208.20, 208.00 and 206.89 next.
The GBP/JPY dives over 0.45% on Wednesday as market mood turns sour on red-hot US inflation data, which drove US equities lower and fueled speculation that major central banks would need to tighten monetary policy. The cross-pair exchanges hands at 208.89, after reaching a high of 210.31.
GBP/JPY Price Forecast: Technical outlook
Earlier, the GBP/JPY cleared a downward resistance trendline and hit the day’s high, ahead of the release of US CPI data. Once released, the Pound weakened and the Yen, benefiting from its safe-haven appeal, pushed the pair below 209.00 toward current spot prices.
The Relative Strength Index (RSI) shows that bullish momentum has somewhat faded, though it remains bearish-biased, suggesting further downside.
The GBP/JPY first support is 208.50. A breach of the latter will expose the October 8 low of 208.20, followed by 208.00. Once cleared, the next stop is the year-to-date (YTD) low of 206.89, ahead of the December 16 cycle low of 206.78
For a bullish reversal, traders must first drive the spot price above 209.00, followed by the high of the day (HOD) at 210.31. If achieved, the September 18 high of 211.28 sits above, which, once surpassed, paves the way for buyers to challenge the 50-day Simple Moving Average (SMA) at 214.43.
GBP/JPY Price Chart – Daily
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Euro.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.41% | 0.50% | 0.02% | 0.13% | 0.18% | 0.32% | 0.31% | |
| EUR | -0.41% | 0.10% | -0.41% | -0.28% | -0.24% | -0.10% | -0.10% | |
| GBP | -0.50% | -0.10% | -0.50% | -0.39% | -0.33% | -0.19% | -0.20% | |
| JPY | -0.02% | 0.41% | 0.50% | 0.15% | 0.15% | 0.38% | 0.28% | |
| CAD | -0.13% | 0.28% | 0.39% | -0.15% | 0.04% | 0.20% | 0.21% | |
| AUD | -0.18% | 0.24% | 0.33% | -0.15% | -0.04% | 0.13% | 0.10% | |
| NZD | -0.32% | 0.10% | 0.19% | -0.38% | -0.20% | -0.13% | 0.01% | |
| CHF | -0.31% | 0.10% | 0.20% | -0.28% | -0.21% | -0.10% | -0.01% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
Commerzbank analysts report that Bank of Korea Governor Shin Hyun-song sees inflation, exchange rate and financial stability pointing policy in the same direction, ahead of the 22 October meeting where rates may be left unchanged after two hikes. He views further Won gains as desirable, while USD/KRW is steady around 1,342 and the Won has rallied 16% versus the Dollar since early July.
Governor backs Won appreciation stance
"Bank of Korea (BoK) Governor Shin Hyun-song stated that inflation, the exchange rate, and financial stability all point monetary policy in the same direction. These comments come ahead of BoK’s next meeting on 22 October, where it could leave rates unchanged after back-to-back 25bp hikes in July and August."
"Governor Shin also stated that further gains in the won would be desirable as it would shift the balance towards the domestic economy. This would help smooth the uneven growth pattern which has been led by AI-related exports. From a growth perspective, the electronic upcycle has more than offset the drag from the Middle East conflict."
"However, Governor Shin noted that stronger demand could also add to cost pressures from higher global crude oil prices. This suggests that BoK could prioritise flexibility in the near term and remain data dependent."
"In FX, USD/KRW held steady at around 1,342 yesterday. The KRW has rallied 16% vs the USD since the low in early July, supported by a strong trade surplus, exporters' repatriation inflows, and narrower interest rate differentials."
"There were also reports in the local media that the government is considering cutting treasury bond issuance to stabilise the bond market. It is reviewing two options. The government could either cut issuance by KRW5tn in each of the November and December auction, or reduce it by a total of KRW5tn through December. This comes after an earlier KRW5tn cut in October. The 10Y Korea Treasury Bond yield has fallen by around 30bp since the high in late September of 4.52% to 4.23%."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- USD/MXN surges 0.65%, reaching 18.60 before retreating toward 18.51.
- US headline inflation accelerates to 3.7%, while core CPI reaches 2.6%.
- October Fed hike odds jump to 42% ahead of US PPI.
The Mexican Peso (MXN) depreciates versus the US Dollar (USD) on Wednesday, down 0.65% on the heels of hot US inflation data, fueling bets that the Federal Reserve (Fed) could raise rates at the October meeting. The USD/MXN pair trades at 18.51, after bouncing off daily lows of 18.35.
USD/MXN hits 18.60 as hot US CPI fuels October Fed hike bets
The exotic pair resumed its uptrend and hit a high of 18.60 as US CPI ignited an increase in hawkish bets for this month's meeting. September CPI rose above estimates, to 3.7% YoY and 0.6% month-on-month, as expected.
The jump in gasoline, diesel, and food prices drove the reacceleration of headline CPI. Excluding volatile items, the so-called core CPI expanded from 2.4% to 2.6% YoY, also above the street’s projections.
Underlying prices drifted higher on a rise in shelter, owners' equivalent rent, recreation and education costs.
Given the backdrop, investors increased the odds for a rate hike from 22% a day ago to 42% for the October meeting. Meanwhile, market participants turn the page, eyeing the release of the Producer Price Index (PPI) on Thursday.
Recently, Fed officials crossed the wires. Chicago Fed President Austan Goolsbee said that CPI data "was discoursing,” adding that hot CPI is “unacceptable,” reaffirming his hawkish stance in a Yahoo! Finance interview.
Richmond Fed President Thomas Barkin said CPI ran too hot and that he is open to a hike at October’s meeting.
On Tuesday, New York Fed President John Williams said that he sees another rate hike in 2026 and none in 2027.
The US economic calendar will feature the Producer Price Index (PPI), Retail Sales, Initial Jobless Claims, and additional Fed speeches.
USD/MXN Price Forecast: Technical outlook
In the daily chart, USD/MXN trades at 18.4925, extending its advance above the reclaimed downward trend line, last resisted around 18.1200, and the clustered simple moving averages (50, 100 and 200-day) near 17.37. Price location above these structural levels sets a bullish near-term bias, although the Relative Strength Index (14) around 73 signals overbought conditions that hint at stretched upside momentum and raise the risk of a corrective pause rather than an immediate trend reversal.
On the downside, initial support is seen at the former resistance trend line near 18.12, which now acts as the first buffer ahead of the grouped long-term simple moving averages around 17.37, while a deeper pullback would expose the horizontal floor at 16.89. With no clear overhead resistance levels in play from the current dataset, dips toward the 18.12–17.37 area are likely to attract buyers as long as the pair holds above these supports, even if overbought momentum prompts short-term consolidation.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Mexican Peso FAQs
The Mexican Peso (MXN) is the most traded currency among its Latin American peers. Its value is broadly determined by the performance of the Mexican economy, the country’s central bank’s policy, the amount of foreign investment in the country and even the levels of remittances sent by Mexicans who live abroad, particularly in the United States. Geopolitical trends can also move MXN: for example, the process of nearshoring – or the decision by some firms to relocate manufacturing capacity and supply chains closer to their home countries – is also seen as a catalyst for the Mexican currency as the country is considered a key manufacturing hub in the American continent. Another catalyst for MXN is Oil prices as Mexico is a key exporter of the commodity.
The main objective of Mexico’s central bank, also known as Banxico, is to maintain inflation at low and stable levels (at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%). To this end, the bank sets an appropriate level of interest rates. When inflation is too high, Banxico will attempt to tame it by raising interest rates, making it more expensive for households and businesses to borrow money, thus cooling demand and the overall economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN.
Macroeconomic data releases are key to assess the state of the economy and can have an impact on the Mexican Peso (MXN) valuation. A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only does it attract more foreign investment but it may encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this strength comes together with elevated inflation. However, if economic data is weak, MXN is likely to depreciate.
As an emerging-market currency, the Mexican Peso (MXN) tends to strive during risk-on periods, or when investors perceive that broader market risks are low and thus are eager to engage with investments that carry a higher risk. Conversely, MXN tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
Chicago Federal Reserve (Fed) President Austan Goolsbee said that “CPI data was discouraging,” adding that services inflation in the CPI “was a concern,” in an interview with Yahoo! Finance on Wednesday.
Goolsbee added that he is “hearing about costs and prices from contacts,” and that he has no worries about a recession. He added that the economy “has work to do on the inflation side,” and reaffirmed that the Fed will get inflation back to 2%.
Key highlights:
CPI data was 'discouraging'
Service inflation in CPI was a concern
Key to focus on trend of inflation, not one report
Hearing about cost and prices from contacts, not hearing about worries about recession
Hopes energy will fade soon from inflation data
The economy has work to do the inflation side
Is not a fan of telegraphing Fed moves ahead of meetings
There is no ambiguity for Fed if economy is solid and inflation is high
Fed must prevent the build-up of overheating
More optimistic about outlook relative to other Fed officials
There is evidence that the building inflation hasn't been transitory amid continued shocks
Need to keep a close eye on service sector inflation
Tariff impacts on prices are more lasting than expected
More bad months of inflation would be unacceptable
Fed will get inflation back to 2%
Doesn't want to tie hands on monetary policy outlook
If the current inflation levels hold, policy would need to address that
Consumers, GDP, and investment levels have been strong
AI hype could cause even more tech sector investment, which would risk overheating
A slowdown in AI investment doesn't have to mean a recession
I want to keep an eye on the financial stability implications of AI investment
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 British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.41% | 0.51% | -0.03% | 0.20% | 0.21% | 0.45% | 0.25% | |
| EUR | -0.41% | 0.10% | -0.44% | -0.16% | -0.22% | 0.00% | -0.16% | |
| GBP | -0.51% | -0.10% | -0.52% | -0.33% | -0.31% | -0.10% | -0.26% | |
| JPY | 0.03% | 0.44% | 0.52% | 0.25% | 0.24% | 0.49% | 0.30% | |
| CAD | -0.20% | 0.16% | 0.33% | -0.25% | 0.00% | 0.22% | 0.04% | |
| AUD | -0.21% | 0.22% | 0.31% | -0.24% | -0.01% | 0.21% | 0.03% | |
| NZD | -0.45% | -0.00% | 0.10% | -0.49% | -0.22% | -0.21% | -0.19% | |
| CHF | -0.25% | 0.16% | 0.26% | -0.30% | -0.04% | -0.03% | 0.19% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
MUFG’s Michael Wan reports that the Monetary Authority of Singapore surprised markets by holding its exchange rate policy unchanged in October, against expectations for slight tightening. MAS sees core inflation easing from mid-2027, subdued domestic costs and a narrowing output gap as the AI cycle cools. Forward guidance suggests the Singapore Dollar policy band will keep appreciating to counter imported inflation.
Policy band to keep S$NEER firm
"The surprise in markets was an unexpected hold by the Monetary Authority of Singapore in its October policy, with no change to the slope or the width of the exchange rate policy band, relative to a very slight tightening in policy in the July meeting."
"The consensus and the market were positioned and expecting for MAS tightening very slightly once again this meeting. The Singapore central bank said in its statement that core inflation is expected to ease discernibly from the middle of next year, with domestic costs to stay subdued and helped by an expected slowing in supply-driven imported inflation. "
"Meanwhile, MAS also expects the positive output gap to narrow through next year as the AI cycle eases. What’s also interesting is that MAS highlighted contained unit labour cost increase in the services sector due to continued productivity gains as one key driver dampening inflation, and this could partly reflect authorities’ concerns around softening of Singapore’s labour market and some higher retrenchments in Singapore’s services sector."
"Net-net, the “forward guidance” in MAS monetary policy statement sounds like the central bank might remain on hold for now unless the situation changes, with MAS saying it is well-positioned to respond effectively to any risk to medium-term price stability and the current appreciating policy band will allow the S$NEER to continue to strengthen and lean against anticipated near-term rise in imported inflation."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Forex Market News
Our dedicated focus on forex news and insights empowers you to capitalise on investment opportunities in the dynamic FX market. The forex landscape is ever-evolving, characterised by continuous exchange rate fluctuations shaped by vast influential factors. From economic data releases to geopolitical developments, these events can sway market sentiment and drive substantial movements in currency valuations.
At Rakuten Securities Hong Kong, we prioritise delivering timely and accurate forex news updates sourced from reputable platforms like FXStreet. This ensures you stay informed about crucial market developments, enabling informed decision-making and proactive strategy adjustments. Whether you’re monitoring forex forecasts, analysing trading perspectives, or seeking to capitalise on emerging trends, our comprehensive approach equips you with the insights needed to navigate the FX market effectively.
Stay ahead with our comprehensive forex news coverage, designed to keep you informed and prepared to seize profitable opportunities in the dynamic world of forex trading.
