Forex News
OCBC’s Sim Moh Siong and Christopher Wong note that reports of potential US tariffs on Chinese goods and the PBoC’s resistance to rapid Renminbi (RMB) gains are likely to limit further downside in USD/CNH. While the broader RMB appreciation bias remains intact, the pair trades near recent lows and mild bearish momentum is showing tentative signs of turning higher.
RMB gains face tariff uncertainty
"Reports that the US is considering a 7.5% tariff on Chinese goods may add some uncertainty ahead of next month’s Trump–Xi meeting."
"For now, the RMB reaction has been limited so far, with USD/CNH still trading close to recent lows, suggesting markets do not see this as a major escalation risk at this stage."
"Separately, the PBoC was already leaning against the pace of RMB gains, with Monday’s fixing around 600 pips above market expectations."
"With the USD also firmer overnight, further gains for RMB may be more limited even if the broader RMB appreciation bias remains intact."
"Mild bearish momentum on daily chart intact though RSI is showing tentative signs of turning higher from oversold conditions. Modest rebound not ruled out. Resistance at 6.74, 6.7460 (21 DMA). Support at 6.72, 6.70 levels."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- DXY trades just under the 99.00 handle, capped by a 200-day EMA near 99.50.
- American session holds a band under a tenth of a point since 13:00 GMT.
- Fed chair keynote and the payrolls benchmark revision share 14:00 GMT on Friday.
A non-voting regional Federal Reserve president published a conditional hold on Tuesday, tying the current target range to continued evidence that inflation is actually coming down, and the Dollar Index has not moved for it. The index trades just beneath the 99.00 handle after a European morning high a shade above it, and the American session band since 13:00 GMT runs less than a tenth of a point wide. That is less a market waiting for a catalyst than a market that has stopped paying for speeches.
The hawks with microphones do not hold votes
Boston and Richmond both rotated off the Federal Open Market Committee (FOMC) in January, which makes Tuesday's remarks and the second regional address scheduled for 20:00 GMT commentary rather than count. The four regional presidents who do hold votes this year sit in Cleveland, Philadelphia, Dallas and Minneapolis, and three of the four already dissented for a quarter point on July 29.
The minutes released last week widened the chorus without widening the tally. Several participants recorded themselves ready to tighten, some doubted that financial conditions were restrictive enough to finish the job, and two presidents who held no vote in July said afterwards that they would have joined the dissent. The ladder of stated hawkishness keeps climbing while the count underneath it stays 9-3.
A market that has watched this sequence run since June now prices the gap between a stated preference and a recorded vote at close to nothing. That is the mechanism behind Tuesday's flat tape, and it is why the speaking calendar has stopped functioning as a Dollar input.
The front end has been moving the other way
Futures put a September increase near one chance in three, down from roughly two thirds in the days after the July meeting. The path down ran through a payrolls contraction, a cooler inflation print and a retail sales miss, which is to say through the data rather than through the podium. Pricing and rhetoric have been moving in opposite directions for three weeks, and the exchange rate has followed the pricing.
Tuesday's own releases pulled the same way as that pricing rather than the podium, with new home sales down 10.5% MoM in July to an annual rate near 607K and inventory rising toward 488K units. Consumer confidence eased to 89.4 in August as the expectations index dropped to 68.2, well beneath the 80 line conventionally read as a recession signal. Neither number argues for a tighter policy setting.
Long-end yields sit close to where they stood before last week's Treasury buyback announcement, the 10-year around 4.70% and the 30-year around 5.25%, so the Dollar is not being sold on a funding scare either. It is being sold because the marginal reason to own it has been repriced away, one release at a time.
An economic D-Day the Dollar declined to buy
The Treasury Secretary spent Monday unveiling what had been trailed for a week as an economic D-Day for Iran, then conceded that the package withholds the secondary measures aimed at third countries and described it as a warning shot. Tehran's state Strait authority answered by warning that vessels breaching its transit rules face fines, seizure or confiscation, and Oman's foreign minister travelled to Tehran on Tuesday to work the only channel either side still uses.
Escalation of exactly this shape bought Dollars in June, when a shut Strait read as a haven bid and a growth tax on everyone outside the United States. The formal truce mechanism has since lapsed with the 60-day window missed on both sides, Brent trades near $93.00, and the index has spent the week beneath both of its major moving averages anyway. A war premium that no longer reaches the exchange rate is not a war premium.
Wednesday's inflation test and Friday's collision
Wednesday's 12:30 GMT block carries the Personal Consumption Expenditures (PCE) price index for July, with core seen at 0.2% MoM and 3.3% YoY. An in-line print would leave core unchanged on the year and deliver none of the progress that Tuesday's conditional hold demanded. The same block brings the second cut of second-quarter Gross Domestic Product (GDP), expected to confirm 1.5% annualised growth beside a 6.3% GDP price index, and initial claims follow on Thursday with 208K forecast against 206K.
Friday is where the week actually resolves, because the chair's first Jackson Hole keynote and the preliminary annual benchmark revision to nonfarm payrolls are both scheduled for 14:00 GMT, nineteen days ahead of the September decision. Last year's preliminary revision cut 911K from the March level. A figure of that order would restate the labour market on which every hold this year has rested, in the same minute the chair is speaking about the framework.
Levels
Resistance: The 200-day Exponential Moving Average (EMA) near 99.50 has capped every attempt since last week's break and Tuesday's high did not come close to testing it. Above that the 50-day EMA sits on the 100.00 handle, which stacks two obstacles inside half a point of each other and makes the 99.50 to 100.00 band the entire bull case.
Support: The 99.00 handle is giving way intraday, leaving last week's low just above 98.50 as the first real shelf, with the daily Stochastic Relative Strength Index (Stoch RSI) near 21 and the 5-minute reading beneath 20. Oversold on both frames without a bounce is a statement about who is left to buy, and the May low just under 98.00 is the only structure below that shelf.
Bias: Bearish while the 99.50 area caps, selling rallies into it with objectives at 98.50 and then the 98.00 handle. Invalidation is a daily close back above 100.00, which would reclaim both moving averages at once and hand the September hawks a price to point at.
Dollar Index daily chart
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact 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 when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
Here is what you need to know for Wednesday, August 26:
The US Dollar Index (DXY) is hovering below the 99.00 mark as traders squared positions ahead of a heavy Wednesday data slate and Federal Reserve (Fed) Chair Kevin Warsh's Jackson Hole address on Friday. The move was modest, keeping the Greenback near recent lows rather than extending, with the Treasury's bond-buyback plans still weighing on the currency.
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 | -0.09% | -0.11% | 0.06% | -0.09% | -0.11% | -0.23% | -0.06% | |
| EUR | 0.09% | -0.01% | 0.15% | -0.01% | -0.00% | -0.16% | 0.03% | |
| GBP | 0.11% | 0.00% | 0.17% | 0.00% | 0.01% | -0.14% | 0.05% | |
| JPY | -0.06% | -0.15% | -0.17% | -0.17% | -0.18% | -0.32% | -0.13% | |
| CAD | 0.09% | 0.00% | -0.01% | 0.17% | -0.02% | -0.15% | 0.04% | |
| AUD | 0.11% | 0.00% | -0.01% | 0.18% | 0.02% | -0.13% | 0.03% | |
| NZD | 0.23% | 0.16% | 0.14% | 0.32% | 0.15% | 0.13% | 0.19% | |
| CHF | 0.06% | -0.03% | -0.05% | 0.13% | -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).
EUR/USD clings to gains near 1.1675, holding firm after upbeat German data, with second-quarter Gross Domestic Product (GDP) and the IFO business surveys both beating forecasts.
GBP/USD stays firm near a six-month high, holding just below the 1.3650 mark, underpinned by sticky United Kingdom (UK) inflation and stronger business surveys.
USD/JPY edges up, holding north of the 159.00 barrier as the Yen drifts on the back foot.
AUD/USD steadies in the low-0.7100s, treading water ahead of Australian inflation data after the hawkish Reserve Bank of Australia (RBA) Minutes.
Gold has lost its grip, easing toward $4,650 per troy ounce as the Middle East risk premium fades.
West Texas Intermediate (WTI) Oil extends its slide, dropping more than 3% toward $82.00 per barrel after the US declared the Strait of Hormuz cleared of mines.
The Asian session leads with Australia's July Consumer Price Index (CPI). Europe brings Switzerland's ZEW Survey Expectations for August, followed by a speech from European Central Bank (ECB) board member Piero Cipollone.
The US session is the heavyweight with a cluster of releases. The second estimate of Q2 GDP is expected to confirm annualized growth around 1.5%, alongside Durable Goods Orders, Personal Income and Personal Spending. The main draw is the Personal Consumption Expenditures (PCE) Price Index, the Fed's preferred inflation gauge, with the core annual rate expected to hold near 3.3%.
Barring a data surprise, the Dollar looks likely to keep drifting into Friday, when Fed Chair Warsh takes the stage at Jackson Hole for the week's main event.
United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note that USD/SGD remains under mild downward pressure but short-term momentum is flat, keeping the pair in a tight intraday band around 1.2700. Their 1–3 week bias stays negative, with focus on support at 1.2670, while a break above 1.2740 would signal a shift into range-trading and reduce prospects of further downside.
Downside bias but momentum easing
"24-HOUR VIEW: USD fell to a low of 1.2682 last Friday and then closed at 1.2699 (-0.19%). Yesterday, we highlighted that “despite declining, there has been no significant increase in downward momentum, and instead of continuing to decline today, USD is more likely to trade in a range of 1.2680/1.2715.” USD then traded within a narrower range than expected (1.2688/1.2711) and closed little changed at 1.2707 (+0.06%). Momentum indicators are mostly flat, and we continue to expect USD to trade in a range today, most likely between 1.2690 and 1.2720."
"1-3 WEEKS VIEW: We have been holding a negative USD stance since early this month. In our most recent narrative from last Thursday (20 Aug, spot at 1.2710), we highlighted that “while the risk for USD remains on the downside, oversold conditions could slow the pace of any further decline.” We also highlighted that “the next level to monitor is 1.2670.” USD dipped to a low of 1.2682 last Friday, but yesterday, it traded in a quiet manner between 1.2688 and 1.2711. Downward momentum is starting to slow, and a break above 1.2740 (‘strong resistance’ was at 1.2750 yesterday) would indicate USD has likely entered a range-trading phase."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- XAG/USD rebounds from three-day low after piercing 100-day SMA.
- Bullish RSI supports upside, though 200-day SMA caps recovery.
- Break above $70.00 exposes $72.22 and $75.00 next.
Silver (XAG/USD) price registers modest gains on Tuesday, after briefly breaching the 100-day Simple Moving Average (SMA) at $68.38, pushing the white metal to a three-day low of $67.43 before making a U-turn and turning bullish. The XAG/USD pair trades at $68.86, up 0.55%,
XAG/USD Price Forecast: Technical Outlook
In the short term, Silver is tilted to the upside, but in the medium term, the market structure of lower highs and lower lows remains in play. Nevertheless, momentum, as depicted by the Relative Strength Index (RSI), indicates further upside, but it is capped by the 200-day SMA at $72.22.
If XAG/USD rises above $70.00, the non-yielding metal could reach the 200-day SMA. Above this level, the next stop is the $75.00 psychological mark, ahead of the $80.00. Conversely, if XAG tumbles below the 100-day SMA, it could open the door to challenge the next key support seen at an upslope support trendline near the $64.50-$65.00 mark. Below, the next area of interest would be the August 19 swing low of $62.19, followed by the 50-day SMA at $61.34.
XAG/USD Price Chart – Daily
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.
- Gold retreats below $4,700 as overbought RSI stalls momentum.
- Hormuz reopening hopes reduce safe-haven demand despite mixed US data.
- Core PCE and Warsh speech could reshape Fed rate bets.
Gold price holds firm during the North American session as buyers fail to surpass the $4,700 level, exacerbating a retracement below a key psychological level, amid mixed US data and rising hopes for an end to the US-Iran conflict. XAU/USD traded at $4,641, down 0.2%.
XAU/USD eases as overbought signals meet improving Middle East headlines
The yellow metal is consolidating as bullish momentum stalls, and the Relative Strength Index (RSI) turns overbought. Geopolitics continued to play a crucial role as news from the Middle East revealed that two US officials confirmed US President Trump’s announcement that the US Navy cleared the traffic separation scheme in the Strait of Hormuz, reported Axios.
Sources cited by Reuters mentioned that Gold, facing a key resistance near $4,700, capped the advance. Meanwhile, US housing data showed a slight improvement, while the ADP Employment Change 4-week average, coming in at 11.75K, exceeded the previous print of 9.5K.
US Building Permits in July rose 4.3% to 1.433 million, surpassing June's -2.6% contraction and estimates of 5%. The Conference Board Consumer Confidence missed estimates, coming in at 90.2, below 90.2. Households saw a slight improvement in business and jobs in August.
Boston Fed's Susan Collins expressed a hawkish stance, highlighting that inflation remains too great and voicing concern about price stability. She acknowledged that the labour market aligns with full employment and noted that the economy is expanding at a near-trend rate.
Meanwhile. Money markets remain sceptical that the Federal Reserve will raise rates at the September meeting, with the odds near 43% for a 25-basis-point rate hike and 57% for keeping rates steady, according to Prime Terminal.
Eyes turn to the release of the Federal Reserve’s favourite inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index, ahead of the speech by the new Fed Chair, Kevin Warsh, at the Jackson Hole Symposium.
The US economic schedule will also feature Durable Goods Orders, Gross Domestic Product (GDP) figures and Initial Jobless Claims data.
XAU/USD technical outlook: Gold struggles at $4,700
Gold is trading sideways for the second straight day with buyers unable to clear $4,700. This exacerbated a retracement below the $4,650, while the Relative Strength Index (RSI) is aiming lower above the 70 overbought level. If the RSI falls below the latter, the XAU/USD could dive further and challenge key support levels.
The first support would be the $4,600 mark, followed by the 200-day Simple Moving Average (SMA) at $4,519. Below sits the $4,500 mark, followed by the 100-day SMA at $4,379.
For a bullish resumption, XAU/USD must reclaim $4,700. If the breakout succeeds, a move to the May 7 swing high of $4,764 is on the cards, followed by a test of $4,800. The next area of interest would be $5,000.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
- USD/CAD slips as a weaker US Dollar supports the Canadian Dollar.
- Canada unveils tariffs on C$27.6 billion of US imports following failed trade talks.
- USD/CAD struggles to reclaim the 200-day SMA near 1.3843.
USD/CAD edges lower on Tuesday, with the Canadian Dollar (CAD) drawing support from a weaker US Dollar (USD) as traders also assess the latest tit-for-tat tariff measures between the United States (US) and Canada. At the time of writing, the pair trades around 1.3834 after retreating from an intraday high of 1.3867.
On Tuesday, Canada announced retaliatory tariffs covering C$27.6 billion worth of US goods. The duties, ranging from 15% to 50%, will apply to roughly 700 products from September 8. The move follows the United States' decision to impose 50% tariffs on a similar value of Canadian imports after trade negotiations between the two countries collapsed.
The near-term outlook favours the Loonie as the Greenback struggles to attract buyers following the return of the USD-debasement narrative. Concerns resurfaced after the US Treasury announced last week that it would increase buybacks of longer-dated government securities. The technical setup also suggests that USD/CAD risks are tilted lower.
Technical analysis
On the daily chart, USD/CAD holds below a cluster of key resistance levels. The 200-day Simple Moving Average (SMA) at 1.3843 provides the first barrier, followed by the 50.0% Fibonacci retracement at 1.3887 and the 100-day SMA at 1.3914. Higher up, the 38.2% retracement at 1.3971, the 50-day SMA at 1.4057 and the 23.6% retracement at 1.4075 form a broader resistance zone.
The Relative Strength Index (RSI) near 37 and the negative Moving Average Convergence Divergence (MACD) suggest that recovery attempts could attract sellers. Meanwhile, the Average Directional Index (ADX) at 35 points to a strong underlying trend, reinforcing the bearish outlook.
On the downside, initial support is seen at the 61.8% Fibonacci retracement near 1.3803. A break below this level would expose the 78.6% retracement at 1.3684, followed by the 100.0% retracement around 1.3531.
Only a daily close back above the 200-day SMA at 1.3843, followed by the 50.0% retracement at 1.3887, would start to ease the immediate bearish bias and open the door for a corrective recovery toward the mid-1.39s.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
- German second-quarter GDP and the August IFO surveys both beat forecasts, pointing to firmer growth and improving business confidence.
- Despite the strong data, EUR/GBP is flat, unable to break out of its recent range.
- Sterling is holding firm, leaving the cross searching for a fresh catalyst.
EUR/GBP traded around 0.8560 on Tuesday, little changed, as a run of stronger German data failed to give the Euro (EUR) a clear lift against a resilient Pound. The pair remains pinned near its 20 and 100-period Simple Moving Averages (SMA), with neither side able to force a break.
Second-quarter Gross Domestic Product (GDP) rose 0.3% on the quarter, above the 0.2% forecast, while the annual rate ticked up to 1%. The bigger surprise came from the IFO business sentiment survey, where the headline Business Climate index jumped to 88.8 in August from 86.7, well ahead of the 87.2 expected.
The Pound Sterling has traded near a six-month high against the US Dollar (USD), helped in part by a soft Greenback, which could explain the Euro failing to gain amid better than expected German data.
The upbeat figures trim the case for further European Central Bank (ECB) easing at the margin, but not by enough to move the needle against a Pound that has held its ground. The result is a pair going nowhere despite a busy data slate.
Short-term technical analysis:
On the 4-hour chart, EUR/GBP trades at 0.8557, holding just under a band of nearby resistance and keeping a mildly bearish near-term tone. The pair is capped by the 100-period Simple Moving Average (SMA) around 0.8559 and the 20-period SMA near 0.8560, while a horizontal barrier at 0.8562 reinforces this overhead supply zone. Momentum is subdued, with the Relative Strength Index (RSI) hovering just below the 50 line, which suggests a consolidative bias but leaves the cross vulnerable while it remains constrained beneath this cluster of moving average and horizontal resistance.
On the downside, immediate support aligns with the horizontal pivot at 0.8557, and a sustained break lower would expose the next cushion at 0.8551. On the topside, a clear move above 0.8559–0.8560 would be needed to ease the current pressure and open the way toward the 0.8562 resistance, with failure to reclaim this band likely keeping rallies shallow in the short term.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
- USD/JPY holds modest gains below 160.00 as the Japanese Yen underperforms its major peers.
- Japan’s fiscal outlook and wide interest-rate gap outweigh expectations of a BoJ rate hike next month.
- US PCE inflation and Fed Chairman Kevin Warsh’s Jackson Hole speech are the key catalysts for the US Dollar this week.
USD/JPY extends its sideways movement below the 160.00 mark on Tuesday, holding modest gains despite a softer US Dollar (USD). The weaker Greenback has failed to lift the Japanese Yen (JPY), which is underperforming its major peers. At the time of writing, the pair trades around 159.30.
The Yen faces persistent pressure from Japan’s expansionary fiscal policy, high government debt and wide interest-rate gap with other major economies. Expectations of further Bank of Japan (BoJ) tightening are providing little support, even as markets fully price in a rate hike next month. Tokyo Consumer Price Index (CPI) data on Friday could offer fresh clues about the central bank’s policy outlook.
Meanwhile, the US Dollar remains tilted to the downside after the US Treasury’s surprise decision last week to increase buybacks of longer-dated government securities. The move revived concerns about the US fiscal outlook and rising government debt, reinforcing the USD-debasement narrative.
The US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, trades around 98.95 after briefly climbing above 99.00 earlier in the day and remains close to a three-month low of 98.56 touched the previous week.
The Greenback faces two key risk events this week that could shape expectations for Federal Reserve (Fed) monetary policy. The US Personal Consumption Expenditures (PCE) Price Index is due on Wednesday, followed by Fed Chairman Kevin Warsh’s speech at the Jackson Hole Symposium on Friday. Markets currently see around a 60% chance that the Fed will leave interest rates unchanged in September, according to the CME FedWatch Tool.
Boston Fed President Susan Collins said on Tuesday that monetary policy is “mildly restrictive” and that it could be appropriate to raise interest rates soon unless there is evidence of sustained disinflation. She added that the labour market is broadly balanced but still faces risks.
Geopolitical developments also remain in focus. Pakistan reported progress in its efforts to revive US-Iran negotiations, although a White House official told Al Jazeera that no talks were underway or scheduled. Still, Washington’s sanctions announcement on Monday suggests a shift toward economic pressure rather than renewed military escalation.
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.06% | -0.05% | 0.13% | -0.05% | -0.07% | -0.15% | -0.00% | |
| EUR | 0.06% | 0.02% | 0.17% | 0.01% | -0.01% | -0.11% | 0.05% | |
| GBP | 0.05% | -0.02% | 0.17% | -0.01% | -0.01% | -0.12% | 0.05% | |
| JPY | -0.13% | -0.17% | -0.17% | -0.18% | -0.20% | -0.30% | -0.12% | |
| CAD | 0.05% | -0.01% | 0.00% | 0.18% | -0.02% | -0.11% | 0.06% | |
| AUD | 0.07% | 0.01% | 0.01% | 0.20% | 0.02% | -0.09% | 0.05% | |
| NZD | 0.15% | 0.11% | 0.12% | 0.30% | 0.11% | 0.09% | 0.17% | |
| CHF | 0.00% | -0.05% | -0.05% | 0.12% | -0.06% | -0.05% | -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 Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
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.
