Forex News

• USD/CHF retreats to 0.8300 from 0.8345 highs on Thursday but remains on track for a seven-week rally.
• The US Dollar loses ground against its most peers as US Treasury yields pull back from multi-decade highs.
• Thursday's lower high and RSI divergence are giving bears some hope.

The US Dollar (USD) extends losses for the second consecutive day against the Swiss Franc (CHF) on Friday as some easing on the global bond rout has triggered a mild risk appetite, sending the US Dollar lower across the board. The USD/CHF pair is testing support at the 0.8300 area after a knee-jerk reaction at 0.8345 on Thursday, although it remains on track to complete a seven-week rally.

An auction for US 30-year Treasury bonds was received with strong demand on Thursday, which eased concerns about the bond crisis and triggered a moderate pullback in global yields. In this context, the safe-haven US Dollar has lost ground against its most peers, providing some support for the Swiss Franc and most of the G8 currencies, in an otherwise calm trading session.

Technical Analysis: Thursday's lower high gives hope for bears

USD/CHF trades at 0.8304, after a rejection at 0.8345 on Thursday, posting a lower high, which suggests that bulls are starting to lose steam. The 4-hour Relative Strength Index (14), around 44, is showing a bearish divergence, while the Moving Average Convergence Divergence (MACD) has turned negative, altogether hinting at a deeper bearish correction.

Bears need to break support at the 0.8300 area (October 6 low) and the 38.2% Fibonacci retracement of September's rally, at 0.8264, to cement hopes of a trend shift and bring the October 2 and September 22 lows, at 0.8227 and 0.8183 respectively, into target.

To the upside, a bullish reaction above the mentioned Thursday's high at 0,8345 negates this view and shifts the focus back to the October 1 high, at the 0.8380 area.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Danske Bank strategist view the September European Central Bank (ECB) minutes as dovish relative to market pricing, arguing that they do not support the three additional rate hikes currently priced in. They note that limited second-round effects from the energy shock and higher long-term yields could reduce the need for further ECB tightening. Meanwhile, US labour market data continues to signal resilience, while Fed officials remain flexible on the timing of additional rate hikes.

ECB minutes seen dovish versus pricing

"In the euro area, the September ECB minutes offered little forward guidance, but we view them as dovish relative to market pricing. The policy discussion appeared broadly neutral and, in our view does not support the three additional hikes priced in."

"Members noted no signs of second-round effects from the energy shock and only limited indirect effects, while stressing that higher long-term rates could materially weigh on growth and inflation. As a result, the sharp rise in longer-term yields should limit the need for further ECB tightening."

"In the US, continued claims increased more than expected to 1.716m in the week ending 26 September, up from 1.699m previously. However, the increase does not change the broader picture, as continued claims remain low compared with recent years. Initial jobless claims fell slightly, against expectations of a small increase, although the previous week was revised higher. Overall, the data still points to a relatively tight labour market."

"On the wires in the US, Fed's Waller said further rate hikes are needed but stressed flexibility on the pace, adding that hikes do not need to come at consecutive meetings. While this is somewhat more explicit on the need for additional tightening than comments from Jefferson and Williams last week, it remains consistent with the message that there is no urgency to hike again at the October meeting."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Commerzbank’s Tatha Ghose reviews the IMF’s Article IV assessment on Hungary, stressing that euro adoption cannot substitute for structural and fiscal reforms. The IMF calls for front‑loaded consolidation and phasing out distortive policies, while welcoming MNB’s pause in rate cuts and new 2.5% inflation target. Ghose argues only combined fiscal, structural and hawkish monetary policy can sustainably strengthen the Forint.

Reform demands and Forint outlook

"IMF’s just published Article IV assessment on Hungary was informative on various topics, in particular the needs for deeper reforms and fiscal consolidation (IMF estimates fiscal deficit at 7-7.5% of GDP this year). The assessment also provided a reality check on Hungary’s push to announce a timetable for euro adoption."

"Under unchanged policies, the deficit would remain above the Maastricht threshold through the medium term, while public debt would continue rising."

"IMF calls for credible, growth-friendly and front-loaded fiscal consolidation, combining lower subsidies and administrative spending with tax reform."

"Monetary policy is equally important. IMF welcomes MNB’s decision to pause rate cuts and notes that the new 2.5% inflation target from January 2028 necessitates a more hawkish stance."

"But IMF’s point is straightforward: the euro can provide an anchor for reform, but is no substitute for the reforms themselves; in other words, euro adoption can be adopted as a medium-term prospect, not a near-term solution to Hungary’s economic or FX problems."

"This will not suffice to boost HUF valuation sustainably though: only fiscal and structural reform combined with an appropriately hawkish monetary policy (month-on-month inflation is sharply accelerating) would generate forint strength."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

MUFG’s Derek Halpenny analyses September Ministry of Finance (MoF) securities data, noting strong foreign purchases of Japanese bonds after the Bank of Japan (BoJ) rate hike, suggesting improved JGB confidence. He highlights record Japan Investment Trust flows into foreign equities via NISA (Nippon Individual Savings Account), implying annualised outflows near JPY 16trn, which he sees as an increasingly negative factor for the Japanese Yen unless policy shifts to include JGBs in NISA.

Record NISA flows pressure Japanese Yen

"Yesterday, the MoF released the International Transactions in Securities data for September that reveals the Japanese investor-type and foreign investor cross-border flows and two stand-out observations are worth noting."

"Firstly, September was a month of turmoil in global bond markets and that was evident in the selling of foreign bonds by Japanese investors. However, interestingly foreign investors did not show the same aversion to fixed income and there was a notable JPY 3,091bn worth of purchases of Japanese bonds. September was also a month in which the BoJ raised rates again and that flow could be indicative of improved confidence in JGBs after three consecutive months of selling through to August."

"Secondly, the Japan Investment Trust flow was telling with foreign equity purchases totalling JPY 1,360bn in September. The buying has picked up and the 3mth sum of foreign equity purchases totalled JPY 3,949bn, a new record over a 3mth period. This Investment Trust flow captures households buying of foreign securities via NISA accounts and it remains clear that the expanded NISA limits adopted in January 2024 continues to have a notable impact."

"Annualising this 3mth flow implies an outflow of close to JPY 16trn (USD 100bn) and is an increasing negative yen factor."

"Providing tax-free opportunities to hold JGBs could well have an impact on the flows to foreign equity markets that is so evident today and given the scale of foreign equity purchases currently would be viewed as a clear yen positive."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• Gold gains some follow-through traction as sliding US bond yields prompt some USD profit-taking.
• Geopolitical uncertainties and the hawkish Fed should limit deeper USD losses and cap bullion gains.
• The recent range-bound price action further warrants some caution for aggressive bullish traders.

Gold (XAU/USD) retains an intraday bullish tone through the first half of the European session on Friday, currently trading around the $4,200 round figure or a one-week high. The US Dollar (USD) extends the overnight pullback from April 2025 highs, helping the precious metal attract buyers for the second straight day. That said, geopolitical risks and the US Federal Reserve's (Fed) hawkish stance could limit USD losses and cap the commodity's recovery from a two-month low, set on Wednesday.

President Donald Trump said on Thursday that the US would refrain from resuming military strikes on Iran before the November 3 midterm elections and added that the US was engaged in productive discussions with Iran. This kept a lid on crude oil prices, which helped ease concerns about runaway inflation. Adding to this, a well-received 30-year bond auction triggered a corrective decline in US bond yields, prompting USD bulls to take some profits off the table. This, in turn, is seen as a key factor offering some support to the Gold price.

Meanwhile, investors remain worried about inflation risks stemming from volatile energy prices amid the US-Iran standoff over Tehran's nuclear program, escalating Middle East conflicts and disruptions around the Strait of Hormuz. US Vice President JD Vance said that Iran must make a meaningful reduction ​in its nuclear enrichment capacity to satisfy US demands and end the seven-month-old war. Iran’s Atomic Energy Chief Mohammad Eslami, however, rejected US demands to abandon Uranium enrichment or give up its stockpiles.

Adding to this, intensifying fighting between the Iran-aligned Houthis in Yemen and the Saudi-led military coalition keeps the geopolitical risk premium in play. Moreover, traders are still pricing in over an 80% chance that the US central bank will raise borrowing costs by the end of this year, which backs the case for the emergence of some USD dip-buying. This might cap gains for the non-yielding Gold as traders now look to the preliminary University of Michigan US Consumer Sentiment and Inflation Expectations Index for a fresh impetus.

UOB sees Fed tightening path extending into early 2027 with inflation risks still in focus

Analysts at UOB Group reiterate that, “we expect two additional hikes, in Dec 2026 and 1Q 2027, thereafter on hold for rest of 2027 as inflation fades in a more durable fashion in the later part of 2027 as the most likely course.” At the same time, they caution that they “continue to keep in mind the risks of further policy tightening if the inflation trajectory becomes more persistent by the combination of higher energy prices, trade tariffs and AI-related factors.” In terms of near-term dynamics, UOB has “ruled out a back-to-back rate hike in the October FOMC, which falls less than a week from the midterm elections (3 Nov),” underscoring their view that the committee is unlikely to move again so close to the political calendar.

XAU/USD 4-hour chart

Technical Analysis

The XAU/USD pair remains confined in a familiar range held over the past two weeks or so and has been showing some resilience below the 78.6% Fibonacci retracement level of the June-August upswing. Meanwhile, the Moving Average Convergence Divergence (MACD) advances with its latest reading at 5.33, while the Relative Strength Index (14) rises toward 59, together hinting at improving momentum that has yet to overcome the overhead structural barriers. Hence, the top boundary of the short-term trading range, around the $4,200 mark, might continue to act as an immediate strong hurdle.

This is followed by the 100-period Simple Moving Average (SMA) on the 4-hour chart, at $4,227, and the 61.8% Fibo. retracement level at $4,231. A sustained break above this cluster would open the way toward the 50.0% retracement at $4,320 and then the 38.2% level at $4,409, with the 23.6% retracement at $4,519 acting as a more distant cap. On the downside, initial support is located at the 78.6% Fibo. retracement at $4,104, where buyers are expected to show up on a pullback, while the broader bias remains constrained by the dense resistance overhead.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

• The New Zealand Dollar bounces up above 0.5600 but remains capped below the top of the weekly range.
• The strong demand in a US 30-year Treasury bond auction on Thursday has eased pressure on yields and allowed for a moderate risk appetite.
• The widening RBNZ-Fed monetary policy divergence is acting as a headwind for NZD recovery.

The New Zealand Dollar (NZD) picks up against the US Dollar (USD) on Friday, as some easing in the global bonds’ rout has allowed for a modest recovery of risk appetite during the Asian session. The NZD/USD pair has returned above 0.5600, but remains unable to break the top of the weekly trading range, in the 0.5630-0.5640 area, which keeps price action relatively close to the 18-month lows, at 0.5580.

Investors’ mood brightened somewhat during Friday’s Asian session after a US 30-year bond auction was received with solid demand on Thursday, which pushed long-term Treasury yields down from multi-decade highs. The US Dollar Index (DXY), which measures the Greenback against a basket of six majors, is pulling back from 18-month lows, and risk-sensitive currencies like the Kiwi have found buyers.

From a wider perspective, however, the Kiwi remains one of the weakest major currencies in September, weighed by the increasing monetary policy divergence between the Reserve Bank of New Zealand (RBNZ) and the Federal Reserve (Fed). The RBNZ’s OCR rate, at 2.75%, is one of the lowest among the world’s main central banks. The Fed has raised its fed funds rate to the 3.75%-4% range over September and is expected to hike it at least by 50 further basis points in the next two quarters.

Technical Analysis: Potential double bottom at 0.5580

NZD/USD trades at 0.5615, with the broader bearish trend intact, although a potential double bottom at the 0.5580 area and the improving momentum on intraday charts are providing some hope of a deeper bullish correction. The 4-hour Relative Strength Index (14) is hovering around a neutral 54, and the Moving Average Convergence Divergence (MACD) is showing a slightly positive reading, yet this merely hints at stabilizing conditions rather than a clear bullish reversal.

Bulls need to break above the top of the consolidation range, in the 0.5630-0.5640 area, to confirm the double bottom pattern, and bring the September 24 and 28 highs, at 0.5687, into focus, ahead of the September 22 high, at 0.5740.

A bearish reaction below the 0.5580 support area (October 5 and 8 lows), on the contrary, would increase pressure towards the 127.2% Fibonacci retracement of the June-August rally, at 0.5530. Further down, the 2025 low, at 0.5485 is likely to be targeted.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

• GBP/JPY regains positive traction amid a combination of supporting factors.
• Japan’s fiscal woes weigh on the JPY, while BoE hike bets underpin the GBP.
• Looming intervention risks could limit deeper JPY losses and cap spot prices.

The GBP/JPY cross extends its recovery move from the weekly low, around the 208.20-208.15 region touched the previous day, and gains strong follow-through traction on Friday. The momentum remains unabated through the early part of the European session, lifting spot prices further beyond the mid-209.00s in the last hour.

The Japanese Yen (JPY) continues with its relative underperformance amid concerns about Prime Minister Sanae Takaichi's expansionary fiscal policies and massive public debt. Furthermore, data released earlier today showed that Japan’s Household Spending fell for a ninth successive month in August, which further undermines the JPY. The British Pound (GBP), on the other hand, benefits from firming expectations for a rate hike by the Bank of England (BoE) in November and a softer US Dollar (USD). This, in turn, provides a goodish lift to the GBP/JPY cross.

BoE seen hiking again as UK growth outlook improves

Analysts at Commerzbank argue that the brighter UK growth backdrop is shifting the policy calculus at the BoE. In their view, “the improved growth outlook should make it easier for the Bank of England to raise rates further in order to lean against inflation.” They note that “until now, we had not expected the BoE to hike rates again,” but stress that “recent developments, however, have led us to conclude that a November rate hike is now more likely than not.” Commerzbank adds that this is unlikely to be “a one-off move,” and now “anticipate another hike in February, taking Bank Rate to 4.25%.”

Meanwhile, BoE Governor Andrew Bailey has noted that the broader economic outlook remains too uncertain to firmly commit to an aggressive multi-hike cycle. In contrast, BoJ Governor Kazuo Ueda stated that the policy phase has shifted toward preemptively fighting inflation risks rather than just trying to hit the 2% target. Moreover, an increase in Japan’s real wages for the eighth straight month reaffirmed bets for further BoJ policy tightening. This, along with looming intervention risks, could limit deeper JPY losses and cap the upside for the GBP/JPY cross.

In fact, traders remain on high alert amid speculation that Japanese authorities will step in again to prop up the domestic currency. Furthermore, the recent range-bound price action warrants some caution before placing aggressive bullish bets on the GBP/JPY cross and positioning for an extension of the recent recovery move from sub-207.00 levels, or the year-to-date (YTD) low, touched on September 30.

• Silver price jumps to near $60.40 as the US Dollar and bond yields face correction.
• Market experts see correction in the US Dollar and bond yields as temporary in nature.
• The next key trigger is the US CPI data for September.

Silver price (XAG/USD) is up 2% to near $60.40 during the European trading session on Friday, reversing its entire Thursday’s losses. The white metal strengthens as its appeal has improved due to a pullback in United States (US) Treasury Yields.

At press time, 10-year US bond yields are up 0.17% to near 5.22%. However, they corrected sharply on Thursday after failing to extend rally beyond the two-decade high at 5.36%. A pullback in US bond yields rally has also weighed on the US Dollar (USD). In early European trade, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.1% lower to near 102.00. Technically, a lower US Dollar improves risk-reward conditions for the Silver price.

However, financial markets argue that it would be early calling a pause in the US Dollar and US Treasury Yields as the conflict between the US and Iran is still intact.

Dollar dip seen as temporary as geopolitical oil premium persists

Strategists at ING observe that the Dollar "lost a bit of ground yesterday as Treasuries took a breather," but they stress that they "don’t see signs of a broader USD correction brewing." They also highlight the geopolitical backdrop, noting that while US President Donald Trump has indicated the US "won’t attack Iran before the 3 November midterms," the oil market "is reluctant to price out the geopolitical premium that has kept prices above $100/bbl despite improved Gulf supply."

Going forward, the major trigger for the Silver price will be the US Consumer Price Index (CPI) data for September, which will be released on Wednesday.

Silver Technical Analysis

In the daily chart, XAG/USD trades at $60.40, keeping a bearish near-term bias as spot holds beneath the 20-day Exponential Moving Average (EMA) at $62.14. The downside skew is reinforced by the Moving Average Exponential (20, close, 0) capping the price overhead, while the Relative Strength Index (14) at 41.86 remains below the midline, hinting at persistent but not extreme selling pressure.

On the topside, initial resistance is defined by the 20-day EMA at $62.14, and a sustained break above this barrier would be needed to ease the current bearish tone and open the way to higher levels. Looking down, the two-month low at $58.50 is the key supprot level.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

(This story was corrected at 10:30 GMT on Friday to say in the second paragraph that At press time, 10-year US bond yields are up 0.17% to near 5.22% and not 2.44%.)

ING strategist Frantisek Taborsky expects the NBP to delay rate hikes until early 2027, with government fuel-price measures allowing policymakers to remain patient. He sees the EUR/PLN trading range shifting higher to 4.380–4.400 amid a strong US Dollar, rising energy prices and risk aversion. In Romania, political uncertainty remains in focus, with EUR/RON expected to stabilise near current levels if a new parliamentary majority emerges.

Polish rates steady, zloty range higher

"The National Bank of Poland’s press conference with Governor Adam Glapiński initially struck a hawkish tone, highlighting inflation risks and the impact of higher energy prices. However, the key takeaway for the market is that, according to the Governor, a rate hike in November is unlikely."

"It appears the government's new measure to lower fuel prices is sufficient for the central bank for the time being, allowing the NBP to wait further. Unless inflation delivers a significant surprise in November, rate hikes will be postponed until the first quarter of 2027 – our baseline scenario."

"Elsewhere, as expected, the National Bank of Romania kept rates unchanged at 6.50%, and we did not see many new comments in the statement. We continue to monitor political negotiations in Romania. EUR/RON drifted lower yesterday following headlines, suggesting hope for a new government under technocratic leadership backed by the original coalition parties."

"Nevertheless, EUR/RON remains above 5.340 and significantly higher than the levels seen in late September, when pressure on the currency began. Should a new parliamentary majority be formed, we expect EUR/RON to stabilise at current levels rather than seeing a leu rally."

"EUR/PLN remains unchanged, but we maintain our view that the trading range will shift from 4.360-4.380 to 4.380-4.400, driven by a strong US dollar, higher energy prices, and risk-off sentiment in the eurozone."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)