Forex News

Societe Generale’s Kenneth Broux notes AUD/USD has defended its 200-DMA and established a pattern of higher highs and higher lows, signalling a short-term uptrend. The pair’s recent advance has stalled near the 100-DMA, but a hawkish Reserve Bank of Australia (RBA) hold could spur further short covering. Key upside objectives are highlighted around 0.7120 and the June highs near 0.7200/0.7275, with 0.6920 as important support.

RBA stance and key moving averages

"AUD/USD defended the 200-DMA in June and has since formed a series of higher highs and higher lows on the daily time chart, highlighting the onset of a short-term uptrend."

"Notably, the pullback in November 2025 also found support around this moving average, reinforcing its significance."

"The next objectives could be located at projections of 0.7120 and the June highs near 0.7200/0.7275."

"The 200-DMA (currently near 0.6920) may act as an important support."

"Sequence of higher highs peters out around the 100dma (0.7053). Hawkish RBA hold tomorrow could attract fresh short covering."

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

Brown Brothers Harriman’s (BBH) Elias Haddad notes that JPY is underperforming as firmer Oil prices support USD/JPY, while the Bank of Japan's (BoJ) latest meeting minutes did little to shift rate expectations. However, Haddad highlights that US-Japan rate differentials could narrow, with BoJ risks skewed hawkish and Federal Reserve (Fed) risks skewed dovish, implying a potential downside bias for USD/JPY over the coming months.

BoJ risks skewed to hawkish repricing

"JPY is underperforming all G10 FX and USD/JPY has retraced roughly 40% of its intervention-driven drop since July 30 as crude oil prices firmed."

"The Bank of Japan (BoJ) Summary of Opinions from the July 30-31 board meeting did not move the needle on rate hike expectations. The swaps curve continues to price 64% odds of a BoJ hike to 1.25% at the next September 18 meeting."

"In July, the BoJ voted 8-1 to keep the policy rate at 1.00% while sticking to its hawkish bias. Takata Hajime supported a 25bps hike. The Summary of Opinions showed that a couple of members argued for the BoJ to focus more on containing upside price risks."

"One member noted it was “necessary for the Bank to accelerate the pace of adjustment to the degree of monetary accommodation.” Another member highlighted “it is necessary for the Bank to raise the policy interest rate, which is below the lower bound of the broadly estimated range.”"

"We see room for US-Japan interest rate differentials to narrow further in favor of a lower USD/JPY. Risks are skewed towards a hawkish BoJ repricing and a dovish Fed repricing."

"The BoJ’s policy rate is near the lower end of its neutral range estimate (1.10%-2.50%) while Japan’s economy is operating above potential. In contrast, Fed policy is restrictive (assuming a neutral rate of 3.00%) and the economy is operating around potential. "

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

ING strategists Ewa Manthey and Warren Patterson highlight that China’s latest trade data show continued weakness in copper imports, with unwrought volumes down 11.5% year-on-year and concentrate flows also softer. However, speculative sentiment in COMEX copper turned more supportive, with net long positions rising to their highest level since February 2021 on tight physical markets and low inventories.

Weak imports yet stronger Copper positioning

"In industrial metals, China's latest trade data showed continued weakness in copper imports. Unwrought copper imports fell 11.5% year-on-year to 424.6kt in July, leaving year-to-date volumes down 6.2%."

"Copper concentrate imports also weakened, reflecting growing pressure from tighter mine supply. In contrast, iron ore imports rose 3.3% year-on-year to 108.1mt, although lower steel margins and maintenance activity continued to weigh on demand."

"On the export side, shipments of unwrought aluminium and aluminium products increased 18.6% year-on-year to 640kt as producers capitalised on supply disruptions and trade dislocations linked to the Middle East conflict. Steel exports rose 2.9% year-on-year to 10.1mt."

"Speculative sentiment remained supportive across metals. Money managers raised net long positions in COMEX copper by 11,306 lots to 77,796 lots, the highest since February 2021, as tight physical markets and low inventories supported prices."

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

MUFG’s Derek Halpenny notes that weaker US jobs data have not triggered a strong reaction in Dollar or rates, as markets await key Consumer Price Index (CPI) releases and another Nonfarm Payrolls (NFP) before the September Federal Open Market Committee (FOMC). Halpenny highlights softer wage growth back to pre-Covid levels, reduced inflation pressures from the labour market, and the impact of recent hawkish FOMC communications on sustaining Dollar pricing.

Dollar reacts cautiously to weak jobs

"Friday’s negative NFP print is likely to influence FX sentiment in the early part of the week, at least through to the CPI release on Wednesday – the key macro release of the week."

"That makes a lot of sense with the two CPI reports and another NFP report before the next FOMC meeting on 16th September meaning market participants were cautious about removing too much of the pricing for a hike at that meeting – the probability of a hike has still dropped from 55% to 40%."

"Still, the YoY rate for average hourly earnings fell from 3.5% to 3.2%, confirming the full retracement back to pre-covid levels and certainly underlining the lack of inflationary pressures coming from the labour market."

"Let’s see what the CPI data bring on Wednesday but another weaker than expected core CPI print (which would be the third month in a row) along with last week’s weaker jobs would certainly provide compelling ammunition for the doves on the FOMC although again we may not get a big market reaction this week either given the September data points lie ahead before the FOMC meeting."

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

Rabıobank's Senior FX Strategist Jane Foley discusses recent EUR/USD strength, noting it was mainly driven by a softer Dollar after weak United States (US) labour data reduced Federal Reserve (Fed) rate hike expectations. Foley highlights resilient Eurozone data but also growth headwinds and limited appetite for strong Euro appreciation. Rabobank now expects EUR/USD to reach 1.16 in three months, assuming no major Eurozone growth surprises.

Euro gains on softer US outlook

"At the end of last month EUR/USD lurched higher. On Friday, the currency pair traded at its highest levels since June 17. This may give the illusion of a buoyant EUR."

"The release of the surprisingly soft US July labour market report was the clear trigger for the move higher in EUR/USD on Friday. The softer data dealt a blow to expectations of Fed rate hikes which knocked US yields and the greenback lower."

"Indeed, it is RaboResearch’s view that the Fed will hold rates steady this year, which suggests scope for further softness in the USD."

"Given than another ECB rate hike is already in the price, a move is unlikely to provide much additional upside incentive for the EUR. We see scope for a modest upside bias in EUR/USD in the months ahead, mostly reflecting a reduction in Fed rate hike speculation and we have brought forward our forecast of a move to 1.16 from 6mths to 3mth."

"That said, in the absence of upside growth surprises in Q3, we are doubtful that the market will be keen to rebuild substantial EUR long positions in the coming months."

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

TD Securities strategists expect the Reserve Bank of Australia (RBA) to leave the cash rate unchanged at 4.35%, noting that policy is already restrictive and that Australian activity, particularly housing, is slowing in response to earlier hikes. They highlight that lower-than-expected Q2 trimmed mean Consumer Price Index (CPI) allows the RBA to pause in August, while also expecting only limited changes to inflation forecasts despite elevated Oil prices.

RBA seen holding policy steady

"The RBA is in pause and observe mode as 1) policy is viewed to be restrictive, 2) activity (especially housing) is slowing in response to earlier hikes, and 3) the full impact of earlier hikes is yet to be felt."

"Lower-than-expected Q2 trimmed mean CPI gives the RBA space to pause at the August meeting, with OIS markets pricing close to 0% odds of a hike."

"We also get new economic forecasts in the August Statement of Monetary Policy, but we doubt the RBA would downgrade its inflation forecasts sharply amid heightened inflation risks from elevated oil prices."

"We expect the RBA to keep the cash rate at 4.35% (consensus: 4.35%)."

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

BNY’s Wee Khoon Chong highlights that long-end JGB yields are rising on inflation and fiscal concerns, with markets pricing a roughly 50% chance of a 25bp BoJ hike in September and a full hike by year-end. The BoJ’s July MPM Summary of Opinions signals accommodative conditions but a tilt toward further tightening, with risks of larger hikes if action is delayed.

BoJ debate shifts to overshoot risks

"Long-end JGB pressure is building. Inflation risks and fiscal concerns have pushed long-end JGB yields toward the upper end of recent ranges."

"Several members argued that the bank should keep the policy rate unchanged at this meeting to assess the lagged impact of the previous hike, but the overall tone favors further tightening."

"The debate has shifted away from lifting inflation to 2% and onto preventing an overshoot."

"Members also warned that waiting too long could force faster, larger rate hikes later, risking a “double shock.”"

"Markets are now pricing in roughly a 50% chance of a 25bp BoJ hike in September and a full hike by year-end."

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

ING analysts Ewa Manthey and Warren Patterson note that Oil prices remain supported by uncertainty around the Strait of Hormuz as US-Iran negotiations continue. They highlight reduced net long positions in NYMEX WTI and ICE Brent, even as US oil activity recovers and US crude exports stay elevated. Gas prices at Henry Hub also gain support from warmer weather and higher LNG feedgas flows.

Strait risk supports Oil complex

"Oil prices remain supported by uncertainty surrounding the Strait of Hormuz. While US President Donald Trump said Washington is "semi-negotiating" with Iran, suggesting a focus on economic pressure rather than military escalation, significant hurdles remain before any broader agreement is reached. Reports indicate that Iran and Oman are nearing an agreement on a shipping route through Hormuz, though a full reopening of the waterway is still likely to depend on progress in US-Iran talks."

"Speculative sentiment turned more cautious last week. Money managers cut net long positions in NYMEX WTI by 7,257 lots to 101,050 lots, while net longs in ICE Brent fell by 20,361 lots to 164,722 lots, marking a second consecutive weekly decline."

"US oil activity has continued to recover, with Baker Hughes data showing that the oil rig count rose by three to 454, the highest level since May 2025. Meanwhile, US crude exports remain elevated as buyers seek alternative supply sources, although much of the recent increase has been supported by inventory drawdowns rather than stronger production growth."

"In gas markets, Henry Hub extended gains for a second session, supported by forecasts for warmer weather, stronger power-sector demand and higher LNG feedgas flows. Additional support came from reports that new processing capacity at the Corpus Christi LNG terminal could boost feedgas demand by around 0.8bcf/d."

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

• Silver consolidates after surging more than 10% last week as Fed rate hike bets ease.
• Traders await US CPI data for fresh clues on the Fed’s interest rate path.
• A daily close above $65 would expose the 100-day SMA near $69.

Silver (XAG/USD) struggles to extend its gains on Monday following last week’s strong breakout as traders assess the Federal Reserve’s (Fed) interest rate outlook amid risks on both sides of its dual mandate. The United States (US) labour market is showing signs of weakness, while inflation risks remain tilted to the upside. At the time of writing, XAG/USD trades around $64, with the $65 psychological mark acting as a firm ceiling.

The white metal climbed to its highest level since June 23 last week after weaker-than-expected US Nonfarm Payrolls (NFP) data prompted traders to scale back expectations for a September Fed rate hike. According to the CME FedWatch Tool, the probability of a rate hike now stands below 50%.

Meanwhile, uncertainty over the reopening of the Strait of Hormuz keeps energy-driven inflation risks in focus, even as Iran and Oman say they are close to finalising an agreement.

Traders now await Wednesday’s US Consumer Price Index (CPI) data, which could provide the next major catalyst and determine whether Silver breaks above $65 or loses momentum. A softer-than-expected reading could further reduce Fed rate hike bets and support the non-yielding metal. Conversely, hotter inflation could revive expectations for a rate increase.

Technical analysis

XAG/USD is in recovery mode after forming a double-bottom pattern near the $55 region and reclaiming the 21-day and 50-day Simple Moving Averages (SMAs). The latest leg higher pushed Silver toward $65, a level that previously acted as support but has now turned into resistance, capping immediate upside attempts.

Momentum indicators support the bullish outlook. The Relative Strength Index (RSI) on the daily chart holds around 61, while the positive and expanding Moving Average Convergence Divergence (MACD) histogram suggests the recovery is gaining strength. A decisive daily close above $65 would expose the 100-day SMA near $69, with the $75 level emerging as the next major hurdle.

On the downside, the 50-day SMA near $62 offers initial support, followed by the 21-day SMA around $59. A break below the latter would weaken the recovery and bring the $55 double-bottom region back into focus.

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

Brown Brothers Harriman’s (BBH) Elias Haddad notes that Norwegian Krone (NOK) is trading mixed as firmer Oil offsets the drag from reduced Norges Bank tightening expectations. Norway’s underlying inflation (CPI-ATE) stayed at 2.7% year-on-year, below consensus and the Bank’s projection, prompting markets to sharply cut the probability of a rate hike, though Haddad still expects guidance for another increase to be retained.

Softer core inflation hits hike expectations

"NOK is mixed. Firmer crude is offsetting the drag to NOK from lower Norges Bank rate expectations."

"Norway underlying inflation undershot expectations in July. CPI-ATE was unchanged at 2.7% y/y for a second straight month, below both the 2.9% consensus and the Norges Bank’s 3.3% projection."

"Headline CPI was hotter at 3.0% y/y (consensus: 2.8%) vs. 2.7% in June but is still running below the Norges Bank’s 3.1% forecast."

"Markets sharply pared back Norges Bank rate hike bets for Thursday’s policy decision to 6% from 25% before the CPI release."

"Still, we anticipate the Norges Bank to retain its guidance for another hike “at one of the forthcoming monetary policy meetings” because inflation has remained above target for several years."

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