Forex News
US President Donald Trump has ordered plans to be drawn up for options of returning to fighting against Iran, even as he said earlier that strikes would not restart before the midterm elections on November 3, the New York Times reported on Thursday.
The source said Trump told the Pentagon to develop plans that would target Iran’s drone and missile arsenal, energy facilities, and other military sites.
The US President vetoed five proposals for major operations against Iran or the Houthis in recent months and on Thursday said the US will not attack Iran at any time prior to the midterm elections, held on November 3.
US officials led by Vice President JD Vance discussed the plans at Camp David last Friday, indicating commanders are ready to act within days if Trump changes course.
Market reaction
At the time of writing, the West Texas Intermediate (WTI) is up 2.43% on the day at $90.50.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
- Gold price drifts higher to near $4,140 in Friday’s early Asian session.
- Trump said the US won’t attack Iran before the midterm elections.
- Traders see 17% odds of a Fed rate hike in October.
Gold price (XAU/USD) edges higher to around $4,140 during the early Asian session on Friday. The precious metal rebounds from a two-month low as traders assess the outlook for energy prices and weighed the Federal Reserve's (Fed) uncertain interest-rate path.
US President Donald Trump said the US won’t attack Iran before the midterm elections. Trump added that Washington was also having “productive discussions” with Iran, without offering details. The remarks followed a recent report that the White House was considering striking Iran ahead of the November midterms.
Minutes from the last Federal Reserve (Fed) meeting showed policymakers united in backing their September hike, and most officials assessed that another hike would be appropriate by year-end.
“With regard to the outlook for monetary policy beyond the current meeting, most participants assessed that another increase in the target range for the federal funds rate would likely be appropriate by year end,” the Minutes stated.
Fed Governor Christopher Waller said on Thursday that further rate hikes would likely be needed, but added there was "flexibility" about the pace of increases and left the door open for a pause in October.
According to the CME FedWatch tool, traders see a 17.7% probability of an October rate hike but are pricing in an 81.3% chance of a December increase. It’s worth noting that rising interest rates and higher yields on Treasuries typically weigh on gold as they raise the opportunity cost of holding the non-yielding asset.
Gold underperforms as copper holds near record highs
Analysts at Scotiabank highlight a divergent tone across the complex, noting that “metals are mixed, with copper remaining range bound at its record high as gold continues to look vulnerable following Wednesday’s break to a fresh local low under $4100/oz reaching levels last seen in early August.” The bank underscores that the latest move leaves gold looking particularly exposed, even as copper consolidates near its peak.
Waller’s flexible hike stance keeps Fed tone firmly hawkish
Fed’s Waller delivered a distinctly hawkish message, with an FXS Speechtracker score of 8/10, notably stronger relative to the historical average of 7.2/10. The insistence that “more hikes [are] needed” while allowing that they need not come at consecutive meetings signals a preference for a higher terminal rate with tactical flexibility on timing, reinforced by concern over persistent inflationary forces from AI investment and energy shocks and a strengthening economy in the second half of 2026. Emphasis on inflation running close to 5-1/2 years above target and the risk to inflation expectations, alongside a “solid and stable” labor market, underscores a bias toward further tightening even as Waller advocates using signaling rather than rigid forward guidance to steer markets.
The FXS Fed Sentiment Index rose by 0.42 points to 138.34, confirming that the overall Fed communication remains deep in hawkish territory according to the FXS Speechtracker framework. The combination of a higher-than-baseline speech score and an index level far above the neutral 100 mark suggests markets should continue to price a stronger Dollar bias and elevated Fed rate expectations despite the newly emphasized flexibility in the pace of future hikes.
Technical Analysis: Gold remains capped under the 100-day SMA
In the daily chart, XAU/USD remains under pressure as price holds below the Bollinger middle band and the 100-day simple moving average (SMA), keeping the near-term bias bearish despite the recovery off recent lows. The Bollinger upper band marks a more distant cap, while the Relative Strength Index (RSI) at 39.99 stays below neutral, hinting that sellers still retain the upper hand even as oversold conditions are avoided.
On the downside, immediate support emerges at the lower Bollinger band near $4,060, where a firmer bounce would be needed to ease bearish pressure. On the topside, initial resistance is located at the Bollinger middle band around $4,240, followed by the 100-day SMA at $4,265, with the Bollinger upper band at $4,420 acting as a stronger barrier if buyers attempt a deeper corrective move.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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/JPY dipped through its 200-day average to 157.50 on Trump's Iran pledge.
- The 10-year Treasury yield fell back from its highest level since 2002.
The 10-year Treasury yield ended near 5.22% after President Trump said on Truth Social that the US won't attack Iran before the midterm elections. It had touched its highest since 2002 on Wednesday.
Trump called the talks with Tehran productive and kept the US blockade in place, and Brent fell within minutes on a promise that runs out on November 3. Cheaper oil could mean less US inflation and fewer reasons for Fed hikes.
USD/JPY moves with the gap between US and Japanese rates, because that gap is the extra income from borrowing Yen to hold Dollars. The Fed's rate, 3.75%-4.00%, is 2.50-2.75 percentage points above the 1.25% set by the Bank of Japan (BoJ), and lower US yields shrink that income.
Two dips came close to 157.50 on Thursday, the first on talk of Japanese intervention and the second in the bars after the statement, and both stopped above Monday's low. The second came from a high just under 158.50, below Wednesday's, and fell through the 200-day Exponential Moving Average (EMA) just above 157.50.
St. Louis Fed President Musalem then said in New York that rates should rise over the next six to nine months, and USD/JPY recovered about a third of the drop. It closed just under 158.00, between the 200-day EMA and the 50-day EMA, and every close since October 1 has been within about 20 pips of 158.00.
Friday's University of Michigan (UoM) sentiment index is forecast to slip to 47.6 from 48.1, but the bigger test for US yields comes on Wednesday, October 14. US Consumer Price Index (CPI) inflation was 3.4% in August against 2.4% with food and energy stripped out, so those two categories add a full point to the headline rate and oil reaches both.
Retail sales and producer prices follow on Thursday, October 15, the same day BoJ board member Koeda speaks.
A firm core reading could add to Fed hike bets and send USD/JPY back toward the September 24 high near 159.00, while a soft one may keep its closes clustered near 158.00.
USD/JPY daily chart
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
- AUD/USD trades at 0.6960, down 0.11% on Thursday.
- OpenAI revenue shortfall fuels losses across major AI stocks.
- Waller leaves further Fed hikes on the table but signals flexibility.
The Aussie Dollar dives 0.11% on Thursday as the US Dollar retreats from monthly highs, with safe-haven flows shifting from the Greenback to the Japanese Yen and the Swiss Franc amid losses on Wall Street and US yields. The AUD/USD trades at 0.6960 at the time of writing.
AUD/USD lags its G8 peers despite a softer Dollar and falling Treasury yields
Market mood turned downbeat as tech stocks fell after OpenAI's annual revenue came in $20 billion below expectations, dragging major AI stocks lower. The US Dollar weakened on the report as well, while the Aussie Dollar trimmed some of its previous losses, though it was the weakest currency of the G8 FX space.
The US Dollar Index (DXY), which tracks the buck’s performance against six currencies, drifted lower by 0.13% to 102.11, undermined by a decline in US Treasury yields.
Two Federal Reserve officials grabbed the headlines, alongside geopolitics. Fed Governor Christopher Waller supports further rate hikes but warned that they don’t have to be “consecutive,” cementing the case for the Fed holding rates in October.
St. Louis Fed Alberto Musalem, a voter in 2028, said that inflation is high and that a strong jobs market provides clues to the central bank to focus on curbing persistently high inflation above its 2% goal.
In the calendar, US Initial Jobless Claims fell to 197K in the week ending October 3, below forecasts for a jump of 200K, indicating that the labor market is in a “low-hire, low-fire” environment.
In Australia, Friday’s economic docket is absent, but eyes will be on next week’s economic docket. On October 12, the Reserve Bank of Australia (RBA) releases its last meeting minutes. Two days after that, employment data would dictate the Aussie Dollar’s direction.
In the US, the schedule features the University of Michigan Consumer Sentiment, followed by next week’s inflation data on the consumer and producer sides, Retail Sales, and further Fed speaking.
AUD/USD Price Forecast: Technical outlook
In the daily chart, AUD/USD trades at 0.6960, keeping a bearish near-term tone as spot holds beneath the cluster of the 50/100/200-day simple moving averages (SMA) grouped around 0.7089 and the former support trend line now acting as resistance near 0.7067. The Relative Strength Index (14) at 34.70 hovers just above oversold territory, suggesting downside momentum is still dominant but may be slowing as price tests the lower end of the recent range.
On the topside, initial resistance is seen at the upward trend-line barrier around 0.7067, followed closely by the triple SMA cap near 0.7089, while a stronger ceiling emerges at the horizontal level at 0.7198, ahead of more distant trend-line resistances at 0.7415, 0.8826 and 0.9732. On the downside, immediate support aligns with the rising trend line around 0.6912, with a deeper structural floor at the prior downward trend-line break near 0.6365, where buyers would be expected to show more robust interest if the current slide extends.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Australian Dollar Price This week
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies this week. Australian Dollar was the strongest against the Euro.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.41% | 0.06% | 0.02% | -0.23% | -0.15% | 0.17% | 0.33% | |
| EUR | -0.41% | -0.36% | -0.32% | -0.63% | -0.58% | -0.24% | -0.07% | |
| GBP | -0.06% | 0.36% | 0.04% | -0.28% | -0.20% | 0.13% | 0.29% | |
| JPY | -0.02% | 0.32% | -0.04% | -0.24% | -0.07% | 0.20% | 0.33% | |
| CAD | 0.23% | 0.63% | 0.28% | 0.24% | 0.14% | 0.33% | 0.56% | |
| AUD | 0.15% | 0.58% | 0.20% | 0.07% | -0.14% | 0.33% | 0.48% | |
| NZD | -0.17% | 0.24% | -0.13% | -0.20% | -0.33% | -0.33% | 0.16% | |
| CHF | -0.33% | 0.07% | -0.29% | -0.33% | -0.56% | -0.48% | -0.16% |
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).
- GBP/USD bounced a few pips above its three-month low on BoE hike talk.
- BoE member Greene sees UK pay deals near 3.5%, too fast for 2% inflation.
Bank of England (BoE) external member Greene said in Cape Town that it's dangerous to assume markets will do the BoE's work for it, and that UK pay awards look set for about 3.5% next year. She has voted for a hike at each of the last three meetings. Governor Bailey has argued that higher borrowing costs since the US-Iran war began have given the BoE time to decide, which is the argument she called dangerous.
Traders price about an 83% chance that the UK's Bank Rate rises to 4.00% from 3.75% on November 5, against roughly one in five for a Fed hike on October 28. A BoE move first would put the Bank Rate level with the top of the Fed's 3.75%-4.00% range and erase the extra interest a Dollar deposit earns over a Pound one.
GBP/USD dipped just under 1.3200 before Governor Bailey's speech in Istanbul, a few pips short of the three-month low set on October 1. It turned up after the speech and reached just under 1.3250 as the Dollar slipped from near its 18-month high, then closed in the upper third of the day's range.
Every daily low since September 24 has come within about 30 pips of 1.3200, and every high in that run has stopped below 1.3300 apart from a brief spike above it on September 30. The pair has traded under its 50-day and 200-day Exponential Moving Averages (EMAs), trend lines built from past closing prices, since mid-September.
The BoE has seven speeches scheduled between October 12 and October 16, ending with Governor Bailey, and each will test the 83% priced for November. Before them, Friday's University of Michigan (UoM) survey carries US households' one-year inflation expectations, 4.6% in September, and a higher reading could lift the odds of an October Fed hike.
US Consumer Price Index (CPI) data follows on Wednesday, October 14, and UK Gross Domestic Product (GDP) for August on Thursday, October 15.
A firm US inflation number could put the three-month low back in reach, while a soft one may leave November's BoE hike as the only move priced with much confidence before December.
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 holds near 208.87 after rejecting the 209.40 high.
- RSI stays bearish near 43, signaling limited bullish momentum.
- Break below 208.20 exposes 208.00 and September low at 206.89.
The GBP/JPY seesaws on Thursday, poised to end the session unchanged at 208.87, after prices traveled from the low of the day (LOD) of 208.20, towards a daily high of 209.40, before settling at around current levels.
GBP/JPY Price Forecast: Technical outlook
Price action shows the GBP/JPY cross is still bearish, after diving over 4.46% following a coordinated two-day intervention between the US and Japan, with sellers pushing prices towards a yearly low of 207.10, hit on September 8.
Since then, the cross has recovered some ground but has remained within familiar levels. During the day, it hit an eight-day high of 210.20 on October 7 before retreating beneath 209.00.
The Relative Strength Index (RSI), although bearish, is flat near 43, suggesting that further consolidation lies ahead. Nonetheless, in the short term, the crossover of the 50-day Simple Moving Average (SMA) below the 200-day SMA indicates that bears are in control.
For a bearish resumption, sellers must clear the October 8 low of 208.20 before testing the 208.00 figure. On further weakness, the next support is the September 30 low of 206.89.
Should buyers push prices above 209.50, a test of 210.00 is on the cards. Above this level, the traders' target would be the September 18 high at 211.28, followed by the 50-day SMA at 211.98.
GBP/JPY Price Chart – Technical outlook
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 Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.15% | -0.12% | -0.14% | -0.21% | 0.14% | -0.12% | -0.24% | |
| EUR | 0.15% | 0.03% | 0.02% | -0.08% | 0.22% | 0.06% | -0.08% | |
| GBP | 0.12% | -0.03% | 0.00% | -0.08% | 0.17% | 0.02% | -0.10% | |
| JPY | 0.14% | -0.02% | 0.00% | -0.11% | 0.19% | -0.01% | -0.08% | |
| CAD | 0.21% | 0.08% | 0.08% | 0.11% | 0.31% | 0.14% | -0.02% | |
| AUD | -0.14% | -0.22% | -0.17% | -0.19% | -0.31% | -0.13% | -0.28% | |
| NZD | 0.12% | -0.06% | -0.02% | 0.00% | -0.14% | 0.13% | -0.07% | |
| CHF | 0.24% | 0.08% | 0.10% | 0.08% | 0.02% | 0.28% | 0.07% |
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).
- Gold recovers to above $4,130 as falling yields offset a hawkish Fed.
- Strait of Hormuz tension keeps WTI elevated despite Trump remarks.
- Markets price in an 81% chance of a 25 bps Fed rate hike in December.
Gold (XAU/USD) price edges higher on Thursday, underpinned by lower US Treasury yields and a weaker US Dollar, even as Federal Reserve (Fed) officials support further tightening by the US central bank. At the time of writing, XAU/USD trades at $4,130, up 0.48%, after bottoming near $4,103.
Bullion rises on falling US yields, despite Fed hawkish rhetoric
The Middle East crisis continues to pressure on inflation as energy prices remain high, pushing global bond yields to multi-year record highs. Explosions around the Strait of Hormuz keep West Texas Intermediate (WTI), the US crude benchmark, at $90.85, up over 2%, which posted earlier gains of more than 4% if not for comments by US President Donald Trump.
Trump said that the US won’t attack Iran before the midterm elections. Nevertheless, an Axios report showed that US and Israeli officials said that Iranian leaders are suspicious of Trump’s comments, adding that Iranian leaders want to avoid a third surprise attack.
Federal Reserve policymakers made some hawkish comments but failed to provide forward guidance on October. St. Louis Fed President Alberto Musalem commented that inflation is high and that the strength of the labor market suggests the Fed must focus on tackling it.
Fed is hawkish but patient at the same time
Earlier, Fed Governor Christopher Waller eyed additional rate hikes but stressed that they do not need to be consecutive, shutting the door on the October meeting.
Money markets show that a rate hike in the October 27-28 meeting is a long shot. But for December, the odds are near 81% that the Fed will raise rates by 25 basis points.
On the data front, Initial Jobless Claims for the week ending October 3 came in at 197K, below forecasts of 200K and the prior week's 199K, suggesting an ongoing low-hire, low-fire jobs market.
Next for Gold traders, they must be attentive to geopolitical developments, the behavior of US Treasury yields and the US Dollar. Regarding US economic data, the University of Michigan Consumer Sentiment survey for October is expected to provide clues about households’ views on the economy and inflation.
XAU/USD technical analysis: Gold bearish bias intact, below $4,200
Price action reaffirms that the downtrend remains intact, even though Gold buyers stepped in, pushing spot prices above $4,100. Worth noting that Wednesday's candle engulfs the price action of the day, an indication that a ‘bullish harami’ looms. Nevertheless, further confirmation is needed, like a decisive breakout of key resistance levels, before XAU turns bullish
The Relative Strength Index (RSI) remains bearish, indicating further downside.
Therefore, Gold’s first support is $4,100. Below the next stop is $4,000, ahead of the July 29 swing low of $3,996 and then it challenges the year-to-date (YTD) low of $3,941.
Should XAU/USD reclaim $4,200, this clears the path to test the confluence of the 100- and 50-day Simple Moving Averages (SMAs), each at $ 4,263 and $4,332, respectively. Once those levels are cleared, the next stop is $4,500, ahead of the 200-day SMA at $4,529.
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.
UOB strategists Quek Ser Leang and Lee Sue Ann describe USD/CNH as holding largely unchanged, but with a slight increase in downward momentum. Intraday, they see the bias tilted lower toward 6.6950, with resistance at 6.7055 and 6.7100 and a clear break below 6.6950 deemed unlikely. Over 1–3 weeks, they expect USD/CNH to trade between 6.6950 and 6.7270, while over 1–3 months they anticipate gradual downside as long as it stays below the cloud near 6.7815.
Dollar-Yuan bias leans lower
"24-HOUR VIEW: We stated yesterday that USD “could edge higher,” but we held the view that it “is likely to stay within a 6.7000/6.7100 range.” USD subsequently rose to 6.7095, declined to 6.7015 before closing largely unchanged at 6.7027 (+0.02%). The slight increase in downward momentum suggests the bias is tilted to the downside toward 6.6950. A clear break below this level is unlikely. Resistance is at 6.7055, followed by 6.7100."
"1-3 WEEKS VIEW: In our most recent narrative from last Tuesday (29 Sep, spot at 6.7110), we highlighted that “for the time being, we expect USD to trade in a range between 6.6950 and 6.7270.” We continue to hold the same view for now."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- USD/MXN jumps to 18.14 after tech selloff triggers risk aversion.
- Hawkish Fed talk and strong US jobs data weigh on the Mexican Peso.
- Banxico minutes reveal upside inflation risks ahead of US sentiment.
The Mexican Peso (MXN) depreciates about 0.91% against the US Dollar (USD) on Thursday amid positive US data, while Bank of Mexico (Banxico) minutes from last meeting indicated inflation edging higher, a trend confirmed by the September print. The USD/MXN pair trades at 18.14 after reaching a low of 17.95.
US equities weighed on the Mexican Peso
The emerging-market currency is weighed down by a sudden shift in market mood, as the Financial Times reports that OpenAI's annual revenue is $20 billion lower than previously signaled. The news weighed on tech stocks and sent US equities tumbling amid traders' fears that the rally may be questionable.
Before that news, global equities were underpinned by US President Donald Trump's post on Truth Social, saying that they held productive discussions with Iran and that there wouldn’t be attacks on Iran before the midterm elections.
In FX markets, the Greenback underperforms against most G7 currencies, but not against the Peso. The US Dollar Index (DXY), which measures the buck’s value against six currencies, is down 0.07% at 102.17.
Would Banxico raise rates as headline inflation approaches 3.50%?
Headline inflation in Mexico rose from 3.26% to 3.45% YoY in September, below estimates of 3.47%. Core figures for the same period decreased from 3.88% to 3.75%, below forecasts of 3.8%.
Doubt lingers over whether the Bank of Mexico (Banxico) could make a U-turn and raise rates if inflation surpasses the 4% threshold in the future. Nonetheless, the minutes revealed that policymakers “projected inflation path over the forecast horizon remains skewed to the upside.”
Fed’s Musalem remains hawkish; US jobs market solid
In the US, St. Louis Fed President Alberto Musalem was hawkish, saying that inflation remains above 2% and that further tightening is needed. He added that contacts are about inflation rather than jobs.
The latest Fed minutes revealed that all members backed September’s rate hike and that the board sees the labor market as “stable and generally viewed … as close to maximum employment.”
Data from the US showed that Initial Jobless Claims dipped below estimates, indicating labor market strength.
Ahead, USD/MXN traders will eye the release of the University of Michigan Consumer Sentiment print, as the Mexican economic schedule is absent.
USD/MXN Price Forecast: Technical outlook
In the daily chart, USD/MXN trades at 18.1986, extending its recovery above the clustered simple moving averages (SMA) around 17.2852 and maintaining a clear bullish near-term bias. Price action is now well supported by that SMA floor and the prior horizontal base at 16.8866, while the Relative Strength Index (14) at 72.18 shows the pair in overbought territory, hinting that upside momentum is stretched but not yet reversing.
On the downside, initial support is seen at the triple SMA area near 17.29, ahead of the horizontal support level at 16.89 which marks the latest significant reaction low. As long as USD/MXN holds above these supports, dips are likely to attract buying interest, with a period of consolidation or a modest pullback favored to cool the overbought daily RSI before the broader uptrend can sustainably extend.
(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.
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