Forex News
- DJIA edges higher to just above 51,800 as memory-chip stocks sell off outside it.
- Bank of America double-upgrades Salesforce to Buy, target $285 from $160.
- Goldman Sachs, a tenth of the index by weight, reports Tuesday before the open.
Micron fell about 4% on Monday and the NASDAQ 100 fell with it, while the Dow Jones Industrial Average (DJIA), which holds no memory-chip maker, finished higher. The S&P 500, which holds Micron and all 30 Dow members, finished slightly lower. The index closed just above 51,800, its highest close in more than two weeks. Most of the coverage credited Salesforce (CRM), which supplied about an eighth of the gain.
The Dow counts dollars, and Micron has nearly a thousand of them
The Dow is price-weighted. It adds up its 30 share prices and divides the total by a divisor of about 0.168, so a $1 move in any member is worth about six index points, whatever the size of the company. Micron trades just under $1,000, which would make it the index's heaviest stock if it were a member, and its drop would have cost the Dow more than 200 points, more than Monday's whole gain.
Nvidia (NVDA), at under $230 a share, is the index's only semiconductor stock. It fell, as did Amazon (AMZN) and Cisco Systems (CSCO), and the three cost the Dow about 50 points between them. Microsoft (MSFT), Apple (AAPL), American Express (AXP) and Visa (V) added roughly 90 points between them, while Salesforce added about 20, and more than 20 of the 30 members rose.
Salesforce rose after Bank of America moved it two notches to Buy from Underperform, on the view that artificial intelligence (AI) will entrench enterprise software rather than replace it. It traded up as much as 5% on the upgrade and kept less than a third of that. Goldman Sachs (GS), the index's heaviest stock at near $890, fell and was the largest single drag on the Dow.
Chevron (CVX), the Dow's only Crude Oil producer, added about as much as Salesforce. Crude Oil rose about 2%, with West Texas Intermediate (WTI) near $94.00 and Brent just above $106.50, after Houthi missile fire at Riyadh's airport and a Russia-Ukraine energy truce that Kyiv says Moscow has already broken.
A Fed voter calls Treasury yields modest with the bond market shut
Cleveland Federal Reserve (Fed) President Hammack, who votes on policy this year, said a restrictive stance is appropriate and that the Fed should make smaller rate changes but make them quickly. The Fed's rate has been 3.75-4.00% since the September 16 increase under Fed Chair Warsh, with the next decision on October 28. She also described Treasury yields as modest by historic standards, on a day the cash Treasury market was closed for Columbus Day, and the 10-year yield was still at Friday's 5.24%.
Mortgage rates are set off the 10-year, so Home Depot (HD) and Sherwin-Williams (SHW) feel it first. Tighter policy won't put off the hyperscalers, the cloud companies building AI data centres, but may reach companies in other industries, she said. Microsoft, Alphabet (GOOG, GOOGL) and Amazon are three of the Dow's 30 members, and the other 27 are from other industries.
She also said lower-income workers have moved from trading down to choosing which bills to pay. That describes a large share of the customers at Walmart (WMT) and McDonald's (MCD), two of the index's consumer names.
The Dow's heaviest stock slipped the day before its earnings
Goldman Sachs and JPMorgan Chase (JPM) report on Tuesday before the open. Every 1% move in Goldman is worth about 50 index points and every 1% in JPMorgan about 20. FactSet's tally has S&P 500 earnings up about 29.6% from a year earlier for the quarter, which would be a fourth straight quarter above 25%, carried mostly by the data centre spending of Microsoft, Alphabet and Amazon and by Nvidia's sales into it.
The Consumer Price Index (CPI) follows on Wednesday at 12:30 GMT, with headline inflation forecast to rise to about 3.7% from 3.4% in August, mostly on gasoline, which Chevron sells and Walmart's and McDonald's customers buy. Producer prices come on Thursday at 12:30 GMT.
Futures price a hold on October 28, so a hot headline number would move the odds of another increase rather than the base case, and higher odds mean higher yields for the Dow's housing names. The core measure, which strips out food and energy, is forecast near 2.4%, the slowest since March 2021, and the Fed raised its rate in September with core at that level.
Dow Jones Industrial Average levels under the 50-day average
Resistance: The rally stopped just above 51,900, short of the 50-day Exponential Moving Average (EMA) just above 52,000. The index has closed beneath that average every session since September 9, so a close above it turns a two-day bounce into a recovery. The September 22 high just under 52,500 is next.
Support: Monday's low just under 51,700 held at Friday's close, and Friday's low just above 51,200 is the base the two-day run started from.
Bias: Lean long while 51,200 holds on a closing basis, with the 50-day EMA just above 52,000 the first objective and 52,500 the second. The daily Stochastic Relative Strength Index (Stoch RSI) is near 48 and has been rising from the bottom of its range since late September, so the run isn't stretched. A daily close back under 51,200 erases the two-day run and ends the long.
Dow Jones daily chart
index's heaviest stock
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note USD/CNH unexpectedly fell to 6.6919 on Friday, with downside momentum starting to build. Intraday, they see potential for a brief dip below 6.6900, provided the pair stays under 6.6985. Over 1–3 weeks, a clear break and close beneath 6.6900 could open the way toward 6.6800, while resistance is now at 6.7050.
Risk of break below 6.6900 support
"24-HOUR VIEW: We expected USD to “trade in a range between 6.7000 and 6.7080” last Friday. We did not expect USD to decline to a low of 6.6919. Downward momentum has increased, but not significantly. Today, USD could dip below 6.6900, but it remains to be seen whether downward momentum will strengthen sufficiently for it to maintain a foothold below this level. To keep the momentum going, USD must hold below 6.6985"
"1-3 WEEKS VIEW: We have been expecting USD to trade in a range since late last month. Last Friday (09 Oct, spot at 6.7030), we indicated that “we continue to expect USD to range-trade, but the low volatility since then suggests that a narrower 6.6900/6.7180 range should be sufficient to contain price movements for now.” USD then fell to a low of 6.6919. Downward momentum is building, and if USD breaks and closes below 6.6900, it may lead to a move toward 6.6800. The likelihood of USD breaking clearly below 6.6900 will remain intact as long as USD holds below the ‘strong resistance’ level, now at 6.7050."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Buyers are stepping in and keeping the US Dollar (USD) bid due to safe-haven demand, as the resumption of hostilities in the Middle East and strikes between Russia and Ukraine have pushed energy prices higher. This, along with hawkish comments from Cleveland Federal Reserve (Fed) President Beth Hammack, ignited speculation about higher interest rates.
Here is what you need to know on Tuesday, October 13:
The US Dollar Index (DXY) is trading at a year-to-date high of 102.60, poised to extend its gains and challenge the next cycle high seen at 103.30, the April 10, 2025, daily high. Momentum remains bullish, with traders gathering clues about the US jobs market from the ADP Employment Change 4-week average, housing data, and a speech by Fed Governor Waller.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.39% | 0.20% | 0.22% | 0.20% | 0.37% | 0.45% | 0.55% | |
| EUR | -0.39% | -0.21% | -0.18% | -0.17% | -0.05% | 0.11% | 0.14% | |
| GBP | -0.20% | 0.21% | 0.04% | 0.02% | 0.16% | 0.30% | 0.35% | |
| JPY | -0.22% | 0.18% | -0.04% | -0.05% | 0.13% | 0.27% | 0.31% | |
| CAD | -0.20% | 0.17% | -0.02% | 0.05% | 0.17% | 0.27% | 0.35% | |
| AUD | -0.37% | 0.05% | -0.16% | -0.13% | -0.17% | 0.16% | 0.18% | |
| NZD | -0.45% | -0.11% | -0.30% | -0.27% | -0.27% | -0.16% | 0.03% | |
| CHF | -0.55% | -0.14% | -0.35% | -0.31% | -0.35% | -0.18% | -0.03% |
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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
EUR/USD cleared the 1.1200 figure, tumbling to 17-month lows at 1.1152 amid a scarce economic docket. On Tuesday, market players eye the release of Germany’s Harmonized Index of Consumer Prices (HICP) and speeches by European Central Bank (ECB) members Elderson and Escriva.
GBP/USD drifts lower toward 1.3200, but it seems to have bottomed around that level. Hawkish comments by Fed Hammack weighed on Sterling, but Tuesday’s BRC Like-For-Like Retail Sales for September and Bank of England member Megan Greene could provide tailwinds for the GBP.
USD/JPY consolidates near 158.50 on Monday amid an empty economic calendar, but overall US Dollar strength has lifted the pair, which remains contained amid fears of intervention by Japanese authorities. Japan’s economic docket is absent until Wednesday, with BoJ's Koeda speech.
AUD/USD struggles to surpass 0.7000, extending its losses towards 0.6960, with traders eyeing the release of the Reserve Bank of Australia (RBA) meeting minutes from its last meeting ahead of the NAB Business Confidence gauge.
Gold price (XAU/USD) continues to be rejected at $4,200, as sellers push the yellow metal towards $4,150 per troy ounce, though they seem to be losing momentum. A drop below the latter clears the path for bears, but traders will eye the release of US data on Tuesday, Fed speakers and September’s US CPI report on Wednesday.
- Gold plunges 1.49% to $4,163 as US Dollar strength pressures bullion.
- WTI surges above $93 amid escalating Middle East hostilities.
- December Fed hike odds reach 90% ahead of crucial US inflation data.
Gold (XAU/USD) price drifts lower by about 1.49% on Monday as the Greenback gains ground amid escalating hostilities in the Middle East, pushing energy prices higher and increasing the likelihood of higher interest rates globally. At the time of writing, XAU/USD trades at $4,163 after reaching a high of $4,217.
XAU/USD slides below $4,170 as rising energy prices reinforce inflation fears
West Texas Intermediate (WTI), the US crude benchmark, is rallying more than 2%, up at $93.69, spurred by Houthi attacks on Saudi Arabia, Iran strikes ships in Hormuz and exchange of fire between Russia and Ukraine, even though US President Donald Trump announced that both countries agreed to a ceasefire of attacks on energy installations.
News reports indicated that the US had accepted some of Iran’s seven conditions to end the war, though Tehran said that Hormuz would not be opened unless its demands were met.
This keeps US Treasury yields elevated, with the US 10-year Treasury note yield flat at 5.242%. At the same time, the US Dollar Index (DXY), which measures the performance of the buck against a basket of six currencies, is up 0.3% at 102.56.
Given the backdrop, money markets still price in a rate hike by the Federal Reserve (Fed), but not at the October meeting. Prime Terminal data show that investors see a 20% chance of a 0.25% increase in the Fed funds rate, but for December, the probability is nearly 90%.
Cleveland Fed President Beth Hammack commented that higher rates are needed as inflation broadens and that, within the FOMC, she has one of the highest projections for the neutral rate.
Traders' eyes shift to Fed speakers, led by Fed Chair Kevin Warsh, and to the release of US inflation figures, with the Consumer Price Index (CPI) expected on Wednesday, followed by the Producer Price Index (PPI) on Thursday.
XAU/USD technical analysis: Gold’s downtrend resumes below $4,100
Gold’s rally stalled near $4,200, with buyers unable to decisively hold spot prices above the figure; it retreated toward the day's low at $4,150 before settling at current prices.
Although bullion seems to have found its feet near $4,100, the market structure of lower highs and lower lows remains intact, indicating that $4,000 can be challenged in the foreseeable future.
Momentum has shifted mildly bullish, with the Relative Strength Index (RSI) rising but staying below its 50-neutral level.
For a bearish resumption, Gold needs to drop below the psychologically important $4,150 level. This opens the door for a move to $4,100, followed by the July 29 cycle low of $3,996, and $4,000 below.
On the other hand, if XAU/USD reclaims $4,200, a move towards the 100-day Simple Moving Average (SMA) at $4,256 is on the cards. Up next, the 50-day SMA at $4,337 emerges as the next ceiling level, ahead of $4,500. Once those levels are cleared, the next stop is the 200-day SMA at $4,528.
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.
Societe Generale strategists note that the recent USD/KRW bounce stalled around 1390 and the pair is now testing the lower end of its consolidation, suggesting the broader downtrend may resume. A brief rebound could face resistance at 1367/1372, with downside objectives at 1318 and 1303/1297 if the pair fails to clear those levels.
Bounce fades with fresh downside objectives
"Separately, the KRW rallied to 1333, strongest level vs USD in two years on the back of broad USD retreat, pullback in oil and corporate dollar sales."
"USD/KRW bounce petered out around 1390 and is now challenging the lower limit of its recent consolidation, suggesting that the downtrend may be resuming."
"If a brief rebound materializes, the high achieved earlier this month at 1367/1372 could act as an important hurdle."
"An inability to overcome this resistance may result in a continuation of the decline."
"The next objectives are located at projections of 1318 and 1303/1297."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- WTI Oil rallies to a two-week high as supply risks remain elevated.
- Fresh Russian strikes on Ukrainian energy facilities cast doubt on the announced ceasefire.
- Middle East tensions and renewed tanker incidents in the Strait of Hormuz add to supply concerns.
West Texas Intermediate (WTI) Oil reverses course on Monday and climbs to a two-week high as doubts over a Russia-Ukraine energy ceasefire and supply concerns in the Middle East keep a geopolitical premium in energy markets. At the time of writing, WTI trades around $93.50, up 2.75% on the day, recovering from an intraday low of $89.02.
Oil prices opened the week on a bearish note after US President Donald Trump announced on Sunday that Russia and Ukraine had agreed to an immediate “energy ceasefire.” Trump also said on Friday that Russia would supply more than 300,000 tonnes of diesel, equivalent to around 2.25 million barrels, to US and global markets, with additional shipments to follow.
However, these announcements provided only brief relief. Ukrainian President Volodymyr Zelensky said Russia struck six energy facilities in Ukraine on Monday, casting doubt on the ceasefire. Asked about Trump’s announcement, the Kremlin said, “Contacts are ongoing, we will inform you in due course.”
Middle East developments add further support to crude prices after Houthi strikes on Riyadh’s international airport over the weekend. The attacks come as Saudi-backed Yemeni forces fight to regain ground near Bab el-Mandeb, a key chokepoint for Red Sea shipping.
Saudi Aramco CEO Amin Nasser said, “Globally, the squeeze on crude oil is serious,” adding, “Until Hormuz fully reopens and confidence returns, the pressure across the energy chain will only intensify.”
Iran’s Islamic Revolutionary Guard Corps (IRGC) said a third Oil supertanker struck a naval mine in the Strait of Hormuz in the past two days. IRGC said the tanker was hit after disabling its navigation system, ignoring naval warnings and attempting to leave the waterway.
Meanwhile, OPEC Secretary General Haitham Al Ghais said on Monday that the group now expects global Oil demand to grow by 400,000 barrels per day in 2026, down from its forecast of 1.4 million at the start of the year.
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.
MUFG’s Lee Hardman notes the Chinese Renminbi has outperformed the Euro against the Dollar, with USD/CNY hitting a year-to-date low near 6.6900. PBoC’s lower daily fixes have supported trade‑weighted CNY gains. Growing European unease over China’s widening trade surplus and new caps on hybrid vehicle exports are expected to keep external pressure for gradual Renminbi strength.
Renminbi supported as trade shifts
"Unlike the euro, the Chinese renminbi has been holding up better against the US dollar even as it has strengthened broadly."
"Upward momentum for the renminbi has been encouraged by the PBoC setting lower daily fixes for USD/CNY over the past month even as the dollar index has strengthened by around 4%."
"It has resulted in the renminbi hitting fresh year-to-date highs on a trade-weighted basis."
"China has been able to successful shift trade away from the US to other Asian countries and Europe."
"Building unease over China’s record trade surplus will keep external pressure on Chinese policymakers to allow the renminbi to continue to strengthen gradually to limit the negative impact on trade."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Cleveland Federal Reserve (Fed) President Beth Hammack said on Monday that the neutral rate for the Fed funds “is likely higher,” that she is hearing signs of a problem with inflation expectations and that the question for the Fed is “how fast to make policy more restrictive.”
Hammack commented that the Fed doesn’t want to threaten the jobs side of the central bank’s mandate, that further restraint is needed and that she has one of the higher FOMC projections for neutral.
Key highlights:
Rate projections provide helpful information
Treasury rates right now are "modest" by historic standards
If the economy were to return to a 3% home mortgage, it would likely mean something had gone wrong in the economy
The neutral rate is likely higher, but it is hard to pin down
Hearing "early warning signs" of a possible problem with inflation expectations
Need to "cool the economy at the margins"
Higher interest rates won't dissuade hyperscalers, but might influence firms in other industries.
Not aiming for rates to make a radical impact on the economy
The question for the Fed now is how fast to make policy more restrictive
Don't want to threaten the jobs side of the Fed's mandate
There is more restraint that is needed; if monetary policy does nothing, market conditions would change
More restraint needed; without monetary policy action market conditions could shift
I have one of the higher FOMC projections for neutral
Comments from low-income workers were first about trading down, now they are beginning to juggle what bills to pay
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.38% | 0.22% | 0.22% | 0.21% | 0.37% | 0.50% | 0.54% | |
| EUR | -0.38% | -0.18% | -0.18% | -0.17% | -0.03% | 0.16% | 0.14% | |
| GBP | -0.22% | 0.18% | 0.02% | -0.02% | 0.14% | 0.32% | 0.32% | |
| JPY | -0.22% | 0.18% | -0.02% | -0.04% | 0.13% | 0.30% | 0.29% | |
| CAD | -0.21% | 0.17% | 0.02% | 0.04% | 0.16% | 0.30% | 0.32% | |
| AUD | -0.37% | 0.03% | -0.14% | -0.13% | -0.16% | 0.20% | 0.16% | |
| NZD | -0.50% | -0.16% | -0.32% | -0.30% | -0.30% | -0.20% | -0.01% | |
| CHF | -0.54% | -0.14% | -0.32% | -0.29% | -0.32% | -0.16% | 0.01% |
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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named 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 during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note USD/SGD was little changed around 1.2800 on Friday and expect consolidation to persist. Intraday, they see the pair confined between 1.2790 and 1.2820, with 1.2775 as strong support. Over the next few weeks, upward momentum is rebuilding but seen too weak for a sustained break above 1.2835.
Consolidation below 1.2835 resistance
"24-HOUR VIEW: Last Friday, we expected USD to “trade in a range between 1.2785 and 1.2820.” USD then traded within a narrower range of 1.2789/1.2815, closing little changed at 1.2800 (-0.08%). There has been no clear shift in the underlying momentum, and we continue to expect USD to trade in a range, most likely between 1.2790 and 1.2820."
"1-3 WEEKS VIEW: We highlighted last Thursday (08 Oct, spot at 1.2795) that “while upward momentum is building again, it is weaker than before, and USD is unlikely to reach 1.2835.” Since then, USD traded mostly in a range, and there is no change in our view. Overall, only a breach of 1.2775 (no change in ‘strong support’ level) would indicate that the upside bias has faded."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Cleveland Federal Reserve (Fed) President Beth Hammack said Monday that interest rates need to be higher, that inflation remains “too high”, and that more economic tightness is needed.
Hammack added that inflationary pressures have broadened, that financial conditions are neutral, and that reaching the Fed’s 2% goal “will take some time.” She also recognized that she prefers “smaller policy rate changes.”
Key highlights:
Interest rates need to be higher
Keeping an open-mind about right timing.
Inflation remains too high with the Fed having missed its 2% target for five and a half years.
I think more tightness needed in economy.
Biggest risk is inflationary mindset.
Inflation pressures widespread, not focused
Demand-side pressures from AI are not self-correcting
Frequent, smaller tweaks lower risks
Risk of inflationary mindset becoming ingrained
Restrictive approach needed to achieve 2% inflation
Financial conditions are neutral
Broad inflation, sustained growth require tight monetary policy
Trend inflation now in mid-to-high 2% range, expects it will take some time to return to 2% target despite appropriate monetary policy
Prefers Fed make smaller policy rate changes but act relatively quickly: says
Strong demand, not just energy, adds to price pressures
Steady job market offers scope to tackle inflation
Do not assume anchored inflation expectations as firms plan price hikes beyond input cost rises, signaling an inflationary mindset
Fed officials have duty to clarify their decisions
Important to clarify reaction function so businesses and households can plan effectively
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.37% | 0.20% | 0.22% | 0.18% | 0.37% | 0.47% | 0.54% | |
| EUR | -0.37% | -0.19% | -0.16% | -0.20% | -0.01% | 0.14% | 0.16% | |
| GBP | -0.20% | 0.19% | 0.04% | -0.04% | 0.17% | 0.32% | 0.34% | |
| JPY | -0.22% | 0.16% | -0.04% | -0.06% | 0.14% | 0.28% | 0.31% | |
| CAD | -0.18% | 0.20% | 0.04% | 0.06% | 0.19% | 0.30% | 0.36% | |
| AUD | -0.37% | 0.00% | -0.17% | -0.14% | -0.19% | 0.16% | 0.16% | |
| NZD | -0.47% | -0.14% | -0.32% | -0.28% | -0.30% | -0.16% | 0.01% | |
| CHF | -0.54% | -0.16% | -0.34% | -0.31% | -0.36% | -0.16% | -0.01% |
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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named 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 during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
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.
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