Forex News
- EUR/GBP trades flat as upbeat UK Retail Sales data supports the British Pound.
- The BoE’s less hawkish stance keeps Sterling vulnerable.
- The cross remains within its month-long range as traders weigh the BoE and ECB outlooks.
EUR/GBP trades little changed on Friday as stronger-than-expected UK Retail Sales data lends some support to the British Pound (GBP) after it came under pressure following the Bank of England’s (BoE) monetary policy announcement on Thursday. At the time of writing, the cross trades around 0.8587, staying within the narrow range that has been in place for more than a month.
Data released by the Office for National Statistics showed that UK Retail Sales rose 0.5% MoM in August, beating expectations for a 0.2% decline. On an annual basis, sales increased 2.4%, above the 1.9% forecast. Retail Sales excluding fuel also rose 0.6% MoM and 2.7% YoY.
The BoE kept interest rates unchanged at 3.75% for the sixth straight meeting in a 6-3 vote. Policymakers said there has been little evidence so far of significant second-round effects from higher Oil prices on domestic prices and wages, although they acknowledged that inflation risks are tilted to the upside
The decision left the BoE looking less hawkish than several other major central banks and weighed on the Pound. The Bank of Japan (BoJ) raised interest rates by 25 basis points earlier on Friday, following similar moves from the Federal Reserve (Fed) this week and the European Central Bank (ECB) earlier this month.
Still, BoE Governor Andrew Bailey kept the door open to future rate hikes, saying, “If the conflict in the Middle East persists for an extended period, as appears to be the case, and the risk of second-round effects emerging increases, it is likely that policy may have to tighten.”
Brown Brothers Harriman’s Elias Haddad points out that market pricing for the Bank of England remains aggressive, with “the swaps curve continues to imply about 100bps of BoE rate hikes in the next twelve months to 4.75%.”
However, BBH argues “the BoE may not need to tighten as much as markets expect,” noting that “the UK economy is already operating below capacity, Bank Rate at 3.75% is near the top of the BoE’s estimated 2% to 4% neutral range, and fiscal policy will likely turn more restrictive.” BBH concludes that the “bottom line: GBP remains vulnerable to a dovish BoE repricing.”
On the Euro (EUR) side, ECB President Christine Lagarde said on Friday that growth is “a bit more promising than we thought,” while adding that policymakers are “not seeing second-round effects yet.” She stressed that energy is a significant variable and that the ECB is well positioned to respond, but said interest-rate decisions will be made “meeting by meeting.”
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 Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.16% | 0.17% | 1.26% | 0.13% | -0.05% | 0.38% | 0.13% | |
| EUR | -0.16% | 0.00% | 1.14% | -0.04% | -0.23% | 0.25% | -0.03% | |
| GBP | -0.17% | -0.01% | 1.14% | -0.03% | -0.22% | 0.27% | -0.03% | |
| JPY | -1.26% | -1.14% | -1.14% | -1.11% | -1.32% | -0.86% | -1.13% | |
| CAD | -0.13% | 0.04% | 0.03% | 1.11% | -0.21% | 0.26% | -0.02% | |
| AUD | 0.05% | 0.23% | 0.22% | 1.32% | 0.21% | 0.48% | 0.19% | |
| NZD | -0.38% | -0.25% | -0.27% | 0.86% | -0.26% | -0.48% | -0.27% | |
| CHF | -0.13% | 0.03% | 0.03% | 1.13% | 0.02% | -0.19% | 0.27% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the 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).
Brown Brothers Harriman’s (BBH) Elias Haddad highlights pronounced Japanese Yen (JPY) underperformance, with USD/JPY near 158.00 after a Bank of Japan rate hike to 1.25%. The Bank of Japan (BoJ) signaled cautious tightening, expecting only moderate growth and delayed achievement of 2% inflation. BBH concedes its bearish USD/JPY view is wrong and flags key resistance at 158.42 and 160.00, where FX intervention risks rise.
Yen slump and BoJ caution
"JPY is underperforming across the board, with USD/JPY up nearly two big figures to 158.00. The Bank of Japan delivered on expectations but kept the bar high for a more hawkish stance. As was widely expected the BoJ raised the policy rate 25bps to 1.25% and reiterated that it “will continue to raise the policy interest rate.” The signals were cautious:"
"First, the 7-2 vote in favor of a hike, included two dissents (Asada Toichiro and Sato Ayano) in favor of holding rates steady."
"Second, the BoJ expects growth to moderate and underlying inflation to reach 2% only between the second half of fiscal 2026 and fiscal 2027."
"Third, BoJ Governor Kazuo Ueda warned that rapid rate hikes could unsettle asset prices, adding that it could take some time to confirm that 2% inflation is entrenched. To his point, headline and core CPI inflation remained under 2% y/y in August."
"Bottom line, the Fed’s hawkish hike and the BoJ’s cautious tightening tilt USD/JPY higher, leaving our bearish USD/JPY view plainly wrong. The next two key resistance levels for USD/JPY are offered at 158.42, the 200-day moving average, and 160.00. FX intervention risk will increase as we get closer to 160.00, raising the cost of shorting JPY and limiting the scope for an overshoot."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- XAG/USD rallies above $67.00 after bouncing from the $62.00 area earlier this week.
- The precious metals are rallying sharply as US long-term yields retreat from highs.
- Silver bulls are likely to be tested at the $68.00 area.
Silver (XAG/USD) trades higher for the second consecutive day on Friday, reaching session highs above $67.00 after bouncing from lows near $62.00 earlier this week. Precious metals have drawn support from a moderate reversal in US Treasury yields in the second half of the week, which has offset the negative impact of the Federal Reserve’s hawkish hike.
The Fed raised its benchmark interest rate by a quarter-point to the 3.75-4% band on Wednesday, and Chairman Kevin Warsh reaffirmed the bank’s commitment to fight inflation, hinting at further monetary tightening ahead.
The decision boosted the US Dollar but also triggered a relief in bond markets as confidence in the central bank’s independence was restored. The US benchmark 10-year yield retreated below the critical 5% level, which provided a fresh impulse to the yieldless precious metals.
Technical Analysis: Silver bulls are likely to be tested above $68.00
XAG/USD has bounced from a key support area around $62.00 this week and is heading to resistance just above the $68.00 level, which capped rallies several times earlier in September. Momentum has improved, but indicators in the daily chart remain mixed, with the Relative Strength Index (14) hovering near 56 and the Moving Average Convergence Divergence (MACD) marginally below zero, suggesting that bullish attempts lack follow-through for now.
Bulls need to breach the mentioned resistance above $68.00 (September 4, 9 highs), which closes the path towards the mid-June and late-August highs above $71.00 and the 200-day Simple Moving Average (SMA) at $73.18.
On the downside, session lows near $65.20 are likely to test bears ahead of the mentioned key support area between $62.20 and $63.05, the bottom of the last two months' trading range and the headline of a bearish Head& Shoulders pattern.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
- EUR/USD falls to near 1.1460 as the US Dollar outperforms its peers.
- Hawkish Fed repricing has strengthened the US Dollar.
- ECB President Lagarde rules out fears of second-round inflation effects.
The Euro (EUR) is down 0.12% to near 1.1460 against the US Dollar (USD) during the European trading session on Friday. The major currency pair is under pressure as the US Dollar extends the advance due to firm expectations that the Federal Reserve (Fed) will deliver more interest rate hikes this year.
In European trade, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, posts a fresh seven-week high near 100.50.
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 Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.13% | 0.08% | 1.12% | 0.14% | -0.17% | 0.37% | 0.10% | |
| EUR | -0.13% | -0.05% | 1.07% | -0.01% | -0.33% | 0.27% | -0.03% | |
| GBP | -0.08% | 0.05% | 1.14% | 0.06% | -0.26% | 0.35% | 0.03% | |
| JPY | -1.12% | -1.07% | -1.14% | -1.01% | -1.35% | -0.77% | -1.07% | |
| CAD | -0.14% | 0.01% | -0.06% | 1.01% | -0.33% | 0.25% | -0.05% | |
| AUD | 0.17% | 0.33% | 0.26% | 1.35% | 0.33% | 0.60% | 0.29% | |
| NZD | -0.37% | -0.27% | -0.35% | 0.77% | -0.25% | -0.60% | -0.29% | |
| CHF | -0.10% | 0.03% | -0.03% | 1.07% | 0.05% | -0.29% | 0.29% |
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).
Dollar outlook brightens on Fed repricing
Economists at UOB Group highlight that the bank’s revised expectation for “two further Fed rate hikes” marks a notable shift in the US rates landscape. They argue that the “narrowing of US rate differentials relative to G-10 peers – which have been weighing on the DXY since late 2024 – is likely to reverse and underpin the DXY going forward.”
Meanwhile, the Euro faces selling pressure as European Central Bank (ECB) officials push back fears of the emergence of second-round inflation effects for now, a scenario that eases concerns of an aggressive ECB monetary tightening cycle.
Earlier in the day, ECB President Christine Lagarde said, “Not seeing second-round effects yet.”
EUR/USD Technical Analysis
In the daily chart, EUR/USD trades at 1.1460, extending a bearish bias as spot holds below the 20-period exponential moving average (EMA) at 1.1561. The pair remains pressured by this overhead EMA, while the Relative Strength Index (RSI) at 32.8 hovers just above oversold territory, hinting that downside momentum is still dominant but may be losing some intensity.
On the topside, initial resistance is defined by the 20-day EMA at 1.1561, and a sustained break above this barrier would be needed to ease the current bearish tone and allow for a broader recovery. Looking down, the pair could extend the decline towatds the psychological level of 1.1500 if it falls decisively below the September 17 low at 1.1456.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
ING strategist Francesco Pesole notes that moderating Oil prices have slightly cooled the Dollar’s post-FOMC momentum, but still sees upside risks for the Dollar after the Federal Reserve’s hawkish message. With a typical late-month lull in major US data, ING highlights Oil prices as the main short-term driver for the Dollar, alongside closely watched Fedspeak.
Oil and Fed guidance steer Dollar
"Moderating oil prices have taken the edge off the dollar’s post-FOMC momentum. Energy markets may be gaining some optimism that Tuesday’s reported meeting between US President Donald Trump and the Gulf States during the UN General Assembly could yield some clarity about plans for the region. Media speculation also points to Trump nearing a major decision on whether to escalate military operations or pursue an end to the conflict."
"Even so, we do not see these developments as enough to take Brent back below $100/bbl at this stage."
"We still see upside risks for the dollar as the Federal Reserve’s hawkish message on Wednesday has, in our view, given the green light to markets to fully price in a hike in October if data and energy prices suggest so."
"Looking ahead to the next few days, we note that this is typically a cyclical lull period for top-tier US data releases. Today, industrial production and the leading index for August shouldn’t attract much market attention, and the calendar is rather light next week. That leaves oil prices as the main market driver into month-end."
"Fedspeak will also be watched, although the dot plot seemed clear enough in signalling the Fed is planning to hike again this year. Off-meeting remarks by FOMC members will become more relevant after September’s data releases."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
OCBC strategist Christopher Wong notes that the Bank of England (BoE) kept Bank Rate at 3.75% in a 6–3 vote while highlighting a more challenging inflation backdrop, with Consumer Price Index (CPI) seen near 3.75% in Q4 and above 4% in early 2027. British Pound (GBP) weakened as gilts rallied on a QT overhaul. Wong sees limited support from already-priced tightening and focuses on wage and price dynamics.
Rates support capped by inflation risks
"The BoE kept Bank Rate unchanged at 3.75% in a 6–3 vote, while acknowledging a more challenging inflation backdrop. CPI is now expected to rise to around 3.75% in 4Q and slightly above 4% in early 2027, largely reflecting higher energy prices. BOE nevertheless noted that there has been little evidence so far of material second-round effects in wages and prices."
"GBP weakened overnight even as broader USD/UST yield eased. The larger market reaction was in gilts, where 30y yields fell around 12bp, helped by the BoE’s decision to overhaul its QT program and paused active gilt sales for six months."
"While the near-term rates backdrop may marginally be supportive for GBP, but much will depend on whether higher energy costs start feeding more broadly into domestic inflation. Markets are already pricing a high probability of further tightening (nearly 100bps priced till Jul-2027), which may limit the incremental support from rate expectations alone. Further evidence of easing wage and price pressures would challenge that pricing. Against USD, relative rate dynamics remain important given the Fed’s own tightening path."
"GBP was last at 1.3360 levels. Daily momentum is bearish but RSI fell into oversold conditions. Some retracement higher is not ruled out intra-day but bias skewed towards fading the bounce (if any). Resistance at 1.3420 (38.2% fibo retracement of 2026 high to low), 1.3480 (50 DMA). Support at 1.3310 (23.6% fibo), 1.3270 levels."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- The Indian Rupee recovers against the US Dollar on Friday after declining significantly this week.
- Oil prices drop as Saudi Arabia mulls alternatives to ship energy products.
- Fed’s hike and interest rate repricing are expected to keep US bond yields contained.
The Indian Rupee (INR) opens sharply higher against the US Dollar (USD) on Friday, with the USD/INR pair correcting to near 95.75 from an over seven-week high of 96.10 posted the previous day. The Indian currency capitalizes on a pause in rally in both oil prices and United States (US) Treasury Yields.
As of writing, the MCX Crude Oil contract expiring on September 21 trades at around Rs. 9,688. The oil price has corrected from its multi-month high of Rs. 10,238 posted earlier this week.
A correction in oil prices brings relief for currencies from economies, such as India, which rely heavily on oil prices to meet their energy needs.
Oil eases as Saudi supply signals improve Middle East flow outlook
Analysts at Deutsche Bank note that some improvement in the outlook for oil flows out of the Middle East has resulted in a pullback move in oil prices. They highlight that this “included news that Saudi Arabia was increasing tanker loadings in the Gulf and ramping up sales of crude from just outside the Strait of Hormuz,” as the Kingdom looks to ship more barrels through the strait following the closure of its East-West oil pipeline.
Deutsche Bank adds that the supply picture was further supported when “Bloomberg report[ed] that Saudi Arabia is aiming to restore about half of the East-West pipeline’s capacity within days and return it to full capability ‘in about six weeks.”
This has provided some relief from tight energy supply concerns, which were escalated following drone attacks by Yemen-linked Houthis on pipeline facilities near Riyadh and Medina.
US Treasury Yields correct on oil relief
Yields on US government-backed securities have cooled down a little after rallying in the past few weeks, following relief from a slight correction in oil prices. As of writing, 10-year US Treasury Yields trade close to ongoing week’s low near 4.94% after hitting a 19-year high of 5.04% on Tuesday.
Lower US bond yields result in an improvement in appeal of risk-sensitive assets, such as the Indian Rupee.
Also, market experts believe the interest rate hike move by the Federal Reserve (Fed) on Wednesday, which resulted in an improvement in central bank’s credibility, has also weighed on US Treasury Yields.
According to TD Securities, a combination of "already-hawkish Fed pricing, increased inflation-fighting credibility, and worries about higher rates impacting growth, should help keep 10-year yields contained."
Technical Analysis: USD/INR stays above 20-day EMA
In the daily chart, USD/INR trades at 95.77, keeping a constructive bullish tone as spot holds above the 20-period exponential moving average (EMA) at 95.46. The pair is extending its recovery from the mid-94.00s, and the positioning above this short-term EMA suggests underlying demand remains in place, with pullbacks likely to attract buying interest while momentum stays supportive.
On the downside, immediate support is seen at the 20-period EMA near 95.46, which underpins the short-term uptrend and marks the first level where buyers could re-emerge on any corrective move. Looking up, the September 17 high at 96.10 is the immediate support; a decisive break above the same could open the door for revisiting the all-time high near 97.00.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Indian economy FAQs
The Indian economy has averaged a growth rate of 6.13% between 2006 and 2023, which makes it one of the fastest growing in the world. India’s high growth has attracted a lot of foreign investment. This includes Foreign Direct Investment (FDI) into physical projects and Foreign Indirect Investment (FII) by foreign funds into Indian financial markets. The greater the level of investment, the higher the demand for the Rupee (INR). Fluctuations in Dollar-demand from Indian importers also impact INR.
India has to import a great deal of its Oil and gasoline so the price of Oil can have a direct impact on the Rupee. Oil is mostly traded in US Dollars (USD) on international markets so if the price of Oil rises, aggregate demand for USD increases and Indian importers have to sell more Rupees to meet that demand, which is depreciative for the Rupee.
Inflation has a complex effect on the Rupee. Ultimately it indicates an increase in money supply which reduces the Rupee’s overall value. Yet if it rises above the Reserve Bank of India’s (RBI) 4% target, the RBI will raise interest rates to bring it down by reducing credit. Higher interest rates, especially real rates (the difference between interest rates and inflation) strengthen the Rupee. They make India a more profitable place for international investors to park their money. A fall in inflation can be supportive of the Rupee. At the same time lower interest rates can have a depreciatory effect on the Rupee.
India has run a trade deficit for most of its recent history, indicating its imports outweigh its exports. Since the majority of international trade takes place in US Dollars, there are times – due to seasonal demand or order glut – where the high volume of imports leads to significant US Dollar- demand. During these periods the Rupee can weaken as it is heavily sold to meet the demand for Dollars. When markets experience increased volatility, the demand for US Dollars can also shoot up with a similarly negative effect on the Rupee.
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