Forex News
- Silver bulls pause for a breather after touching the highest level since September 2011.
- The overbought daily RSI makes it prudent to wait for some near-term consolidation.
- Any corrective decline might still be seen as a buying opportunity and remain limited.
Silver (XAG/USD) enters a bullish consolidation phase near its highest level since September 2011 and oscillates in a range, just above mid-$42.00s during the Asian session on Tuesday.
From a technical perspective, the recent strong move up witnessed over the past four weeks or so pauses near the top boundary of the month-to-date (MTD) ascending channel as traders opt to move to the sidelines ahead of the crucial FOMC policy meeting. Moreover, the overbought Relative Strength Index (RSI) on the daily chart further holds back the XAG/USD bulls from placing fresh bets.
This, in turn, makes it prudent to wait for an extension of the sideways consolidative price move or a modest pullback before the next leg up. That said, any corrective slide below Asian session low, around the $42.40-$42.35 zone, could be seen as a buying opportunity and limit losses for the XAG/USD near the $42.00 mark. A convincing break below, however, should pave the way for a deeper decline.
The subsequent fall could drag the white metal to the $41.40 confluence – comprising the lower boundary of the aforementioned channel and the 200-hour Simple Moving Average (SMA). A convincing break below would expose the $41.00 mark before the XAG/USD extends the corrective slide further towards the $40.80-$40.75 intermediate support en route to the $40.50-$40.45 region.
Meanwhile, bulls might now wait for a sustained move beyond the ascending channel resistance, currently pegged near the $42.75 region. This is followed by the $43.00 round figure, above which the XAG/USD could aim to challenge the September 2011 peak, around the $43.40 region, and climb further to the $44.00 round figure and the $44.25 region, or the August 2011 swing high.
Silver 1-hour chart
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 prices rose in India on Tuesday, according to data compiled by FXStreet.
The price for Gold stood at 10,431.45 Indian Rupees (INR) per gram, up compared with the INR 10,414.78 it cost on Monday.
The price for Gold increased to INR 121,669.00 per tola from INR 121,475.90 per tola a day earlier.
| Unit measure | Gold Price in INR |
|---|---|
| 1 Gram | 10,431.45 |
| 10 Grams | 104,313.30 |
| Tola | 121,669.00 |
| Troy Ounce | 324,454.60 |
Daily Digest Market Movers: Gold continues to draw support from dovish Fed-inspired USD weakness and geopolitical risks
The XAU/USD bulls pause for a breather during the Asian session on Tuesday following the recent blowout rally to a fresh all-time high and ahead of the key central bank event risks. The downside for the XAU/USD pair, however, remains cushioned amid a supportive fundamental backdrop.
Traders ramped up their bets for a more aggressive policy easing by the Federal Reserve following the release of a weaker US Nonfarm Payrolls (NFP) report for August. According to the CME Group's FedWatch Tool, the US central bank is expected to lower borrowing costs three times this year.
The US Senate voted to confirm US President Donald Trump's aide, Stephen Miran, to join the Fed's Board of Governors. The decision came as a US federal appeals court ruling that Trump cannot fire Fed Governor Lisa Cook, and ahead of a two-day FOMC meeting due to begin this Tuesday.
Meanwhile, the dovish outlook leads to an extension of the recent US Dollar (USD) downfall to its lowest level since July 24 and should continue to act as a tailwind for the non-yielding Gold. Apart from this, the intensifying Russia-Ukraine conflict could limit losses for the safe-haven commodity.
Russian forces launched a massive attack on Ukraine’s southeastern city of Zaporizhzhia, following a series of strikes by the latter against its oil infrastructure in recent weeks. Moreover, Trump has repeatedly threatened tougher measures against Russia, keeping geopolitical risks in play.
An emergency summit of Arab and Islamic country leaders has condemned Israel’s attack on Hamas leaders in Doha, Qatar's capital, on September 9. A joint statement from the summit urged member states to coordinate efforts aimed at suspending Israel's membership in the United Nations.
Tuesday's release of the US monthly Retail Sales figures and Industrial Production data might do little to provide any impetus. Traders this week will also scrutinize monetary policy updates from the Bank of Canada on Wednesday, the Bank of England on Thursday, and the Bank of Japan on Friday.
FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
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.
(An automation tool was used in creating this post.)
FX option expiries for Sept 16 NY cut at 10:00 Eastern Time via DTCC can be found below.
EUR/USD: EUR amounts
- 1.1710 916m
- 1.1715 1.1b
- 1.1750 1.9b
- 1.1760 1.5b
- 1.1800 2b
- 1.1900 860m
USD/JPY: USD amounts
- 146.00 1.4b
- 147.00 829m
- 149.00 694m
- 150.00 1.5b
AUD/USD: AUD amounts
- 0.6600 677m
USD/CAD: USD amounts
- 1.3900 503m
- The US Dollar Index slides to near 97.20 as an interest rate cut from the Fed on Wednesday seems a done deal.
- Market experts believe that the Fed will deliver two more interest rate cuts this year.
- Investors await key US Retail Sales data for August.
The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.1% lower to near 97.20 during the Asian trading session on Tuesday. This is the lowest level seen in three weeks.
The US Dollar (USD) continues to face selling pressure as the Federal Reserve (Fed) is widely anticipated to start the monetary-easing campaign in its policy announcement on Wednesday. According to the CME FedWatch tool, traders have fully priced in an interest rate cut by the Fed on Wednesday. Lower interest rates by the Fed bode poorly for the US Dollar.
Amid firm expectations that the Fed will bring interest rates down, investors will pay close attention to the monetary policy statement and Chair Jerome Powell’s press conference to get cues about the likely interest rate action in the remainder of the year.
Analysts at Deutsche Bank have anticipated that the Fed will cut interest rates by 25 basis points (bps) in each of the remaining three policy meetings this year, indicating that borrowing rates will go lower to 3.50%-3.75%.
On Monday, the United States (US) Senate narrowly confirmed President Donald Trump’s chosen economic adviser Stephen Miran as a member of the Fed’s Board of Governors ahead of the policy decision. Miran was placed in the replacement of Fed’s board after member Adriana Kugler unexpectedly resigned in early August.
Additionally, the independence of the Fed has been preserved for now by a US appeals court, as they ruled against Trump’s termination of Governor Lisa Cook over mortgage allegations. US assets fell sharply after Trump fired Cook, which market experts saw as an attack on the Fed’s independence.
In Tuesday’s session, investors will focus on the US Retail Sales data for August, which will be published at 12:30 GMT. The Retail Sales data is expected to have grown at a moderate pace of 0.3% on a monthly basis.
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.
- USD/CAD struggles as the commodity-linked CAD receives support from improved Oil prices.
- The BoC is expected to deliver a 25-basis-point rate cut on Wednesday.
- The US Dollar faces challenges as traders expect the Fed to lower rates by 25 basis points in September.
USD/CAD continues to lose ground after registering nearly 0.5% losses in the previous session, trading around 1.3770 during the Asian hours on Tuesday. The pair depreciates as the commodity-linked Canadian Dollar (CAD) could have received support from the improved Oil prices. WTI price received support after a potential supply disruption from Russia following Ukrainian drone attacks on its energy infrastructure and mounting US pressure on buyers of Russian crude.
Markets are pricing in a 25-basis-point rate cut by the Bank of Canada (BoC) on Wednesday. Expectations for BoC easing have increased after data showed a loss of roughly 65,500 jobs in August and a rise in the unemployment rate to 7.1%. Traders will likely observe Canada’s Consumer Price Index (CPI) data due on Tuesday, which could influence the central bank’s policy outlook.
The US Dollar (USD) depreciates against its peers as traders expect the US Federal Reserve (Fed) to lower rates by 25 basis points at its September meeting due on Wednesday. However, there remains a slight chance of a 50-basis-point cut, with markets factoring in continued easing through 2026 to help stave off a potential recession.
Traders will also likely observe the Fed’s Summary of Economic Projections (SEP), the ‘dot plot,’ where each member of the Federal Open Market Committee (FOMC) expects the federal funds rate in the near future.
Markets are broadly expecting the Fed to deliver three straight 25 basis-point interest rate cuts through the end of the year. Morgan Stanley and Deutsche Bank now expect the US central bank to deliver three rate cuts this year, after recent data pointed to easing inflation pressures. Both brokerage firms projected on Friday a 25-basis-point rate reduction at each of the Fed’s remaining meetings in September, October, and December, according to Reuters.
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.
When asked about the US’ request to G7 for higher sanctions on India and China for buying Russian oil, Japanese Finance Minister Katsunobu Kato said, “Japan has pledged to comply with World Trade Organization (WTO) rules, but will consider measures to raise pressure on Russia and coordinate with G7 countries.
Additional quotes
Have decided to support Koizumi if he decides to run in Liberal Democratic Party (LDP) leadership race.
Closely monitor the economy, financial markets, continue to coordinate with the Bank of Japan (BoJ), relevant government agencies.
- WTI price climbs on Russian supply risks after Ukrainian drone strikes.
- European Union officials are evaluating potential sanctions targeting companies in India and China involved in Russia’s Oil trade.
- Oil demand prospects improved ahead of a possible Federal Reserve rate cut on Wednesday.
West Texas Intermediate (WTI) Oil price extends its gains for the third consecutive session, trading around $63.20 during the Asian hours on Tuesday. Crude Oil prices received support after a potential supply disruption from Russia following Ukrainian drone attacks on its energy infrastructure and mounting US pressure on buyers of Russian crude.
Ukraine attacked the Primorsk Oil terminal last week, a key export hub capable of handling up to 1 million barrels per day. Over the weekend, it also struck a major processing unit at Russia's Kirishi refinery, which has a capacity of about 355,000 barrels per day.
Kyiv has escalated its campaign against Russia’s energy infrastructure in a bid to undermine Moscow’s war effort, as peace negotiations remain stalled. Concerns over potential supply disruptions from Russia, responsible for more than 10% of global Oil production, have pushed Oil prices higher, Reuters reported, citing IG market analyst Tony Sycamore.
Additionally, reports suggest the European Union (EU) is weighing sanctions on companies in India and China that facilitate Russia’s Oil trade as part of its latest package of restrictions. On Monday, US Treasury Secretary Scott Bessent said Washington would refrain from imposing additional tariffs on Chinese goods to curb Beijing’s purchases of Russian Oil unless European nations also move to levy steep duties on China and India.
Traders geared up for an anticipated rate cut from the US Federal Reserve this week that could boost Oil demand. The Fed is expected to lower rates by 25 basis points at its September meeting, though there remains a slight chance of a 50-basis-point cut. Markets have also factored in continued easing through 2026 to help stave off a potential recession.
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.
Japan’s Chief Cabinet Secretary Yoshimasa Hayashi welcomed the US-Japan trade deal.
Hayashi noted that “Tokyo is pleased with the implementation of the tariff agreement with the United States (US).”
“Both governments have maintained their commitments under the pact so far,” he added.
Market reaction
USD/JPY is unperturbed by these comments, down 0.10% on the day at 147.25.
Tariffs FAQs
Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.
There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.
During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.
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.
