Forex News

ING’s Francesco Pesole highlights that the Australian Dollar (AUD) is the only G10 currency gaining this week as hotter July inflation and strong household spending fuel hawkish Reserve Bank of Australia (RBA) expectations. ING’s macro team still favours a prolonged RBA hold, expecting benign inflation and a steady Fed to reduce urgency, with AUD/USD targeted at 0.730 by year-end but near-term gains limited as rate pricing is unwound.

Hot data versus prolonged RBA hold

"The Aussie dollar is the only G10 currency gaining ground this week amid a broad USD rebound. Hotter-than-expected inflation for July (3.5% headline, 3.6% trimmed mean) has caused a rapid rebuilding of hawkish expectations, with markets now pricing in a 28bp by year-end. That’s around a 15bp jump since the start of the week."

"This morning, Australia reported very strong household spending data for July (7% YoY), further helping the case for more tightening. However, our macro team is still leaning towards a prolonged hold by the Reserve Bank of Australia, but we admit the hawkish risks have increased."

"House prices are declining and unemployment has edged higher, trends that should become clearer in the 2Q GDP data. Moreover, the Reserve Bank of Australia will likely wait for another set of quarterly numbers before concluding that the pickup in inflation is anything more than a one-off."

"Ultimately, we expect the inflation trajectory to prove benign enough to avert another hike, with our call for a Fed on a prolonged hold also diminishing any sense of urgency in Australia."

"Markets are pricing in 12bp for the 29 September meeting, and we expect that pricing to be unwound, limiting AUD gains for now. Our view on AUD/USD remains upbeat into year-end with a 0.730 target, but that’s relying on our dovish Fed call, which should have a net-positive impact on the pair even if a dovish repricing in the AUD curve happens."

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

• Silver price remains in a tight range between $67.35 and $70 this week.
• Investors keenly await Fed Warsh’s remarks at the Jackson Hole Symposium.
• Fed’s Warsh could reiterate the central bank’s commitment to bring inflation down to the 2% target.

Silver price (XAG/USD) trades 0.35% higher to near $68.40 during the European trading session on Thursday, but is broadly sideways in a range between $67.35 and $70 this week. The white metal struggles for direction as investors await Federal Reserve (Fed) Chairman Kevin Warsh’s speech at the Jackson Hole Symposium on Friday.

Investors will pay close attention to Fed Chair Warsh’s comments regarding inflation and the United States (US) interest rate outlook.

In the July policy meeting, Fed Chair Warsh didn’t deliver any forward guidance, but stressed that the central bank is committed to bringing inflation down to the central bank’s 2% target.

Financial markets believe that the Fed’s commitment to ease price pressures would be favorable for the US Dollar (USD). Such a scenario could diminish the appeal of non-yielding assets, like Silver. Also, a higher US Dollar makes the Silver price an unfavorable risk-reward bet for investors.

Strategists at OCBC said that the USD could “find support if Warsh and other Fed officials push back against debasement concerns and reaffirm their commitment to returning inflation to the Fed's 2% target,” with the conference seen as a key venue for the Fed to clarify its stance on inflation and policy credibility.

Silver Technical Analysis

In the daily chart, XAG/USD trades at $68.40, keeping a bullish near‑term bias as price holds above the 20‑day Exponential Moving Average (EMA) at $65.34. The metal has extended its advance away from this dynamic support, while the Relative Strength Index (14) around 62 suggests firm upside momentum that is approaching overbought territory but still favors buyers.

On the downside, immediate support is seen at the 20‑day EMA near $65.34, where a pullback could attract fresh bids to maintain the broader upswing. On the topside, with no nearby structural price barriers traced yet, momentum remains the main guide; the elevated RSI reading hints that while the bullish trend persists, upside may become more gradual as the market works through increasingly stretched conditions.

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

• New Zealand Dollar approaches weekly lows near 0.5939 after rejection ahead of the 0.6000 area.
• The US Dollar retraces some losses, supported by hot US inflationary pressures.
• The Kiwi's near-term trend remains bullish while above trendline support and the 200-day SMA.

The New Zealand Dollar (NZD) heads lower for the second consecutive day against a stronger US Dollar (USD) on Monday, as hot US inflation data released on Wednesday has renewed pressure on the US Federal Reserve (Fed) to hike interest rates in the coming months. NZD/USD bears are looking at the bottom of the weekly range, around 0.5930, after rejection ahead of the 0.6000 area earlier this week.

On Wednesday, the US Personal Consumption Expenditures (PCE) Price Index confirmed that inflationary pressures keep growing at levels well above the Fed's target, although bets for a September rate hike have remained practically unchanged, as measured by the CME’s FedWatch Tool.

Strategists at ING remain “reasonably confident in [their] call for the Fed to hold on 16 September and, by extension, in a weaker Dollar.” The experts, however, caution that “the next three weeks may need to bring a more convincing combination of data and Fedspeak before markets move closer to a hold outcome,” underscoring that incoming US releases and policy communication will be critical in shaping rate expectations and the Dollar’s near-term trajectory.

Technical Analysis: NZD/USD remains supported by an ascending trendline

NZD/USD trades at 0.5944, holding a constructive bullish bias with price action supported above an ascending trendline support from late June lows, now around 0.5900, and the 200-day Simple Moving Average (SMA) at 0.5844, a popular indicator in FX markets for assessing currency trends.

Momentum indicators in the daily chart remain neutral-to-bullish, with the Relative Strength Index (14) around 60, and a mildly positive Moving Average Convergence Divergence (MACD) reading underscoring that buyers still retain control, despite weakening traction.

On the topside, bulls are likely to face significant resistance in the mentioned 0.6000 area, which capped rallies in May and June. If that level gives way, the February 18 high, at 0.6054, and the year-to-date highs around 0.6100 would come into focus.

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

Geoff Yu at BNY notes that improving flows through the Strait of Hormuz are easing Oil supply fears and supporting a lower Brent price profile. Kuwait and Qatar have restored crude shipments to about 70% of pre-war levels, lifting total Hormuz flows. As more Gulf barrels reach the market, the disruption premium in Oil prices continues to compress despite ongoing U.S.–Iran tensions.

Brent pressured by supply normalization

"Improving Hormuz flows are providing further reassurance on inflation. Kuwaiti and Qatari crude shipments have reportedly recovered to around 70% of pre-conflict levels, while broader traffic through the strait is also rising. Brent is falling again as supply fears ease, removing some of the energy-driven pressure on the global disinflation outlook."

"Brent crude is holding near $87/bbl, well below its late-April peak above $120, as rising oil flows through the Strait of Hormuz ease fears of a prolonged supply shock. Kuwait and Qatar have restored shipments to around 70% of pre-war levels, while total flows through the strait have climbed to roughly 7mn to 8mn barrels a day from about 4mn in mid-July."

"With more Gulf barrels reaching the market, the supply disruption premium in oil has continued to compress, even though Washington and Tehran remain deadlocked over control of the strait."

(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 USD/JPY is stuck between resistance at 160.00 and support at the 200‑day moving average, as Bank of Japan (BoJ) officials maintain hawkish guidance and underlying inflation firms near the 2% target. Haddad expects a 25bps BoJ hike in September but argues a lower USD/JPY is more likely to be driven by a dovish Fed repricing than additional BoJ tightening.

Fed repricing key for Japanese Yen

"USD/JPY remains entrenched between resistance at 160.00 and support at the 200-day moving average (158.40). Bank of Japan (BoJ) Deputy Governor Ryozo Himino stuck to the bank’s hawkish guidance."

"Himino stressed that “raising rates in a timely manner will help avoid a spike in inflation and abrupt rate hikes in the future,” adding “we should pay greater attention to the upside risk to prices than in the past.”"

"Indeed, underlying inflation in Japan has firmed, though it remains around the BoJ’s 2% target or just below. We expect the BoJ to deliver a 25bps rate hike to 1.25% at its next September 18 meeting (80% priced-in)."

"In our view, the catalyst for a lower USD/JPY will come from a dovish Fed repricing rather than a hawkish BoJ repricing. We doubt the BoJ can tighten more aggressively than is currently implied over the next twelve months (75bps) given that underlying inflation pressures remain contained and private consumption activity was flat over Q2."

"In the meantime, FX intervention threat significantly raises the cost of shorting JPY and limits USD/JPY overshoots above 160.00."

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