Forex News
- EUR/JPY posts modest gains near 176.85 in Friday’s early Asian session.
- The negative tone of the cross remains intact below the 100-day SMA, with bearish RSI momentum.
- The first upside barrier emerges at 178.25; the initial support level is seen at 176.16.
The EUR/JPY cross trades in positive territory around 176.85 during the early European session on Friday. Traders remain on high alert for currency intervention from Japanese authorities to prop up the Japanese Yen (JPY).
Japanese Finance Minister Satsuki Katayama said on Friday that the officials are observing one-sided, swift foreign exchange shifts recently. Katayama added that the government will respond appropriately to currency volatility and will engage with the US Treasury.
Bank of Japan (BoJ) board member Toichiro Asada said on Thursday that the central bank must be mindful of the risk that rate hikes could push down underlying inflation given consumption lacks momentum.
On the Euro’s front, the European Central Bank (ECB) is expected to deliver a final deposit rate hike in this cycle next month, according to most economists polled by Reuters, although more than a third expect an additional rate increase in early 2027 as inflation hits double the 2% target.
Japan JGB demand builds as BoJ credibility lifts medium-term Yen outlook
Analysts at MUFG/BTMU highlight that “there continue to be signs that confidence in the JGB market has improved,” a shift they attribute in part to “the more active BoJ and the general consensus that within one or two hikes, the BoJ would be at the neutral policy rate.” According to the bank, Ministry of Finance data “confirming this pick-up in JGB buying by Japanese households” show a notable rise in issuance targeted at individuals. The MoF, which “has an entire portion of its website dedicated to JGBs for individuals,” reports that issuance in November for 3-, 5- and 10-year paper totalled “JPY 2,026bn, the largest single-month total.”
MUFG/BTMU also points to “growing speculation that the government will soon make changes to incentivise JGB buying by including individual JGB holdings in tax-free NISA accounts and/or removing these holdings from inheritance tax,” which could further bolster retail demand. The bank sees “early signs of a shift in flows perhaps,” and argues that “the more examples of this we start to see the more compelling the case will become of a more sustained turnaround in the multi-year trend of yen weakness.” With “intervention likely halting the prospects to the upside, and confidence in the BoJ improving,” MUFG/BTMU concludes that “the risks certainly look more skewed to yen strength over the medium term.”
BoJ’s Asada tempers hike expectations but keeps gradual tightening on the table for Dollar/Yen
BoJ’s Asada speech scores 4.4/10 on FXS Speechtracker, modestly above the historic 3.8/10 baseline, signaling a slightly more impactful and cautiously hawkish tone. Emphasis on being “mindful” that rate hikes could dampen underlying inflation amid weak consumption, and the lack of a clear terminal rate, underscore a reluctance to rush tightening, while stressing Central Bank independence and the possibility of both future hikes and cuts keeps policy optionality wide open.
Comments that Japan’s nominal neutral rate may sit somewhat above the current policy rate, that Asada is “not against raising rates altogether,” and that rates may need to rise slowly at some stage collectively lean hawkish relative to past communication. For Dollar/Yen, the refusal to discuss a desirable FX level, combined with a preference for gradual, data-dependent moves, suggests limited near-term upside in rate expectations but preserves a medium-term bias toward incremental normalization, tempering aggressive Yen-bullish narratives while capping extreme Dollar strength.
Technical Analysis: EUR/JPY keeps a bearish vibe under the 100-day SMA
In the daily chart, EUR/JPY maintains a bearish near-term tone as it holds below the 100-day simple moving average (SMA) while only marginally above the Bollinger middle band. The pair is pressing the lower half of the Bollinger envelope, and the Relative Strength Index (RSI) at 46 suggests subdued, slightly negative momentum rather than an oversold condition, hinting that sellers remain in control but without extreme pressure.
On the topside, initial resistance emerges at the upper boundary of Bollinger Band near 178.25, en route to the 180.00 psychological level. A desicive break above this level could pave the way to the more significant 100-day SMA barrier at 181.25, which continues to cap recovery attempts.
On the downside, immediate support level is aligned with the November 6 low of 176.16, followed by the lower limit of Bollinger Band region near 175.35. A breach of the mentioned level could expose the October 2, 2025 low of 172.27.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
Gold prices rose in India on Friday, according to data compiled by FXStreet.
The price for Gold stood at 11,851.61 Indian Rupees (INR) per gram, up compared with the INR 11,732.83 it cost on Thursday.
The price for Gold increased to INR 138,229.40 per tola from INR 136,849.40 per tola a day earlier.
Unit measure | Gold Price in INR |
|---|---|
1 Gram | 11,851.61 |
10 Grams | 118,511.40 |
Tola | 138,229.40 |
Troy Ounce | 368,622.90 |
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.)
- DXY pauses for a breather, though the fundamental backdrop seems tilted in favor of bulls.
- Firming Fed rate hike expectations and geopolitical risks act as a tailwind for the Greenback.
- The index seems poised to post gains for the third straight week as traders await the US PPI.
The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, enters a bullish consolidation phase on Friday as bulls pause for a breather following a strong three-day rally to the highest level since April 2025, touched the previous day. The index, however, holds above the 103.00 mark during the Asian session amid a supportive fundamental backdrop, warranting some caution before confirming a near-term top.
Against the backdrop of hotter-than-expected US October consumer inflation figures, hawkish commentary from several Federal Reserve (Fed) officials prompted traders to price in a tighter monetary policy stance. In fact, the CME Group's FedWatch Tool indicates that a 25-basis-points (bps) rate hike in December is fully priced in, and traders are assigning around a 13% chance of a jumbo 50-bps increase. This, along with the overnight move higher in crude oil prices, keeps the yield on the benchmark 10-year government bond comfortably above the 5% threshold and favors DXY bulls.
Fed tightening case seen as stronger
Economists at RBC argue that “in the United States, the case for higher interest rates is stronger,” even though “the September surge in U.S. government bond yields largely reversed in October and November.” They note that “rising core-inflation pressures, strong Q3 GDP growth, and a historically tight labour market continue to point to a need for additional Fed tightening to contain inflationary pressure,” reinforcing their view that further policy action is likely required to keep US price dynamics in check.
Meanwhile, US President Donald Trump on Thursday issued a fresh warning to Iran and said that those responsible for any attack on American officials would no longer exist. Trump added that he would not hesitate to launch further military action if the situation warranted it. Moreover, Trump wrote in a Truth Social post that the US does not need a deal with Iran, adding that those days have long since passed. This, along with attacks on Saudi Arabia's energy infrastructure and commercial ships in the Strait of Hormuz, further validates the positive outlook for the safe-haven US Dollar (USD).
Moving ahead, the US Producer Price Index (PPI) highlights Friday's economic docket. Furthermore, speeches from influential FOMC members would drive expectations about the Fed's policy path. Apart from this, the incoming geopolitical headlines might continue to infuse volatility in global financial markets and provide some impetus to the DXY. Nevertheless, the index remains on track to register gains for the third straight week and seems poised to prolong its uptrend witnessed over the past week or so.
DXY daily chart
Technical Analysis
The DXY holds well above the 200-day Simple Moving Average (SMA), which, along with acceptance above the 103.00 mark, reinforces a bullish near-term bias. A break below the said handle would expose the 102.60-102.50 horizontal resistance breakpoint, now turned support. Nevertheless, the constructive setup leaves room for the current bullish phase to probe higher ground before overbought signals start to weigh more decisively.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.76% | 0.92% | 0.99% | 1.01% | 0.95% | 0.37% | 2.01% | |
| EUR | -0.76% | 0.16% | 0.23% | 0.26% | 0.29% | -0.38% | 1.25% | |
| GBP | -0.92% | -0.16% | 0.06% | 0.09% | 0.13% | -0.54% | 1.08% | |
| JPY | -0.99% | -0.23% | -0.06% | 0.02% | -0.09% | -0.59% | 0.97% | |
| CAD | -1.01% | -0.26% | -0.09% | -0.02% | -0.08% | -0.66% | 1.03% | |
| AUD | -0.95% | -0.29% | -0.13% | 0.09% | 0.08% | -0.67% | 0.86% | |
| NZD | -0.37% | 0.38% | 0.54% | 0.59% | 0.66% | 0.67% | 1.65% | |
| CHF | -2.01% | -1.25% | -1.08% | -0.97% | -1.03% | -0.86% | -1.65% |
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).
Iran’s Islamic Revolutionary Guard Corps (IRGC) said on Friday that it had struck and destroyed a US military early-warning radar system in Bahrain, Reuters reported. The group described the attack as retaliation for an airstrike targeting a telecommunications tower in Sirik, a town in southern Iran.
The IRGC warned that any repeated attacks would trigger an unlimited confrontation. It also threatened tougher penalties against companies cooperating with the US on oil shipments through the Strait of Hormuz.
Market reaction
At the time of writing, the West Texas Intermediate (WTI) is down 0.65% on the day at $87.47.
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 Nikkei 225 and China’s Shanghai Composite rise, while Hong Kong’s Hang Seng and South Korea’s KOSPI fall.
- Nvidia CEO Jensen Huang’s resignation sparks fears of tighter US chip export restrictions ahead of the Trump-Xi summit.
- Japanese tech shares rally on strong investor demand for Anthropic’s upcoming IPO, which is already six times oversubscribed.
Asian stocks post mixed results on Friday, with Japan’s Nikkei 225 Index climbing 0.91% to around 61,370 and China’s Shanghai Composite rising 0.22% to 3,660. Conversely, Hong Kong’s Hang Seng Index fell 0.82% to 23,810, while South Korea’s KOSPI declined 0.49% to near 5,320.
Hong Kong’s Hang Seng Index dropped as concerns over Nvidia's leadership turmoil and its potential fallout for China's technology sector weighed on sentiment, overshadowing a broader recovery in regional semiconductor shares. The scandal, which saw Nvidia CEO Jensen Huang step down and CFO Colette Kress assume the role of interim CEO following reports of extramarital affairs, has revived fears of tighter US export restrictions and disrupted advanced chip supplies for Chinese AI developers.
Mainland Chinese markets delivered a mixed performance, with the Shanghai Composite rising while the Shenzhen Component edged lower as investors turned cautious ahead of next week’s summit in Shenzhen between United States (US) President Donald Trump and Chinese President Xi Jinping. The high-stakes meeting faces renewed uncertainty after allegations regarding Huang’s ties to a suspected Chinese spy threatened to reignite bilateral friction over semiconductor trade, potentially giving US lawmakers fresh ammunition to push for stricter technology controls.
South Korea’s benchmark KOSPI gave up its earlier gains, though the tech-heavy Kosdaq managed to rise. Major AI beneficiaries saw muted trading, with SK Hynix remaining flat and Samsung Electronics edging higher following reports that it is in talks to acquire US-listed data center cooling provider Modine Manufacturing to expand its AI infrastructure footprint.
Meanwhile, Japan’s Nikkei 225 Index rallied as investors reassessed the broader impact of Nvidia’s leadership shakeup on the artificial intelligence sector. Technology and AI-related stocks, including Kioxia Holdings, Advantest, and Tokyo Electron, led the rebound, buoyed by strong market anticipation for Anthropic’s IPO next week, which has already attracted orders roughly six times the available shares.
China chip trade risks deepen as geoeconomic tensions rise
Rabobank warns that the potential fallout from the Nvidia saga could extend well beyond equity market volatility into the broader geoeconomic sphere. Analysts caution that “even worse, if the US decision to look the other way on chip sales was a geoeconomic bribe to ensure Chinese rare earths and help in geopolitics, then things could get far more turbulent,” underscoring the risk that any reassessment of export-control enforcement might unsettle already fragile supply chains and strategic resource dependencies.
AI stocks FAQs
First and foremost, artificial intelligence is an academic discipline that seeks to recreate the cognitive functions, logical understanding, perceptions and pattern recognition of humans in machines. Often abbreviated as AI, artificial intelligence has a number of sub-fields including artificial neural networks, machine learning or predictive analytics, symbolic reasoning, deep learning, natural language processing, speech recognition, image recognition and expert systems. The end goal of the entire field is the creation of artificial general intelligence or AGI. This means producing a machine that can solve arbitrary problems that it has not been trained to solve.
There are a number of different use cases for artificial intelligence. The most well-known of them are generative AI platforms that use training on large language models (LLMs) to answer text-based queries. These include ChatGPT and Google’s Bard platform. Midjourney is a program that generates original images based on user-created text. Other forms of AI utilize probabilistic techniques to determine a quality or perception of an entity, like Upstart’s lending platform, which uses an AI-enhanced credit rating system to determine credit worthiness of applicants by scouring the internet for data related to their career, wealth profile and relationships. Other types of AI use large databases from scientific studies to generate new ideas for possible pharmaceuticals to be tested in laboratories. YouTube, Spotify, Facebook and other content aggregators use AI applications to suggest personalized content to users by collecting and organizing data on their viewing habits.
Nvidia (NVDA) is a semiconductor company that builds both the AI-focused computer chips and some of the platforms that AI engineers use to build their applications. Many proponents view Nvidia as the pick-and-shovel play for the AI revolution since it builds the tools needed to carry out further applications of artificial intelligence. Palantir Technologies (PLTR) is a “big data” analytics company. It has large contracts with the US intelligence community, which uses its Gotham platform to sift through data and determine intelligence leads and inform on pattern recognition. Its Foundry product is used by major corporations to track employee and customer data for use in predictive analytics and discovering anomalies. Microsoft (MSFT) has a large stake in ChatGPT creator OpenAI, the latter of which has not gone public. Microsoft has integrated OpenAI’s technology with its Bing search engine.
Following the introduction of ChatGPT to the general public in late 2022, many stocks associated with AI began to rally. Nvidia for instance advanced well over 200% in the six months following the release. Immediately, pundits on Wall Street began to wonder whether the market was being consumed by another tech bubble. Famous investor Stanley Druckenmiller, who has held major investments in both Palantir and Nvidia, said that bubbles never last just six months. He said that if the excitement over AI did become a bubble, then the extreme valuations would last at least two and a half years or long like the DotCom bubble in the late 1990s. At the midpoint of 2023, the best guess is that the market is not in a bubble, at least for now. Yes, Nvidia traded at 27 times forward sales at that time, but analysts were predicting extremely high revenue growth for years to come. At the height of the DotCom bubble, the NASDAQ 100 traded for 60 times earnings, but in mid-2023 the index traded at 25 times earnings.
- Silver may struggle as hot US CPI data drives Fed December rate hike bets.
- Traders await Friday’s US October PPI report for further inflation clues, with headline expected at 6.6% YoY.
- President Trump quashed hopes for an Iran deal on Truth Social, stating those days have long passed.
Silver price (XAG/USD) gains ground after posting modest losses in the previous day, trading around $50.50 per troy ounce during Asian hours on Friday. However, Silver price may face challenges amid rising Treasury yields reflecting growing expectations of a more aggressive Federal Reserve (Fed) policy outlook.
Rabobank dissects shifts in the 10-year US Treasury yield in 2026
Analysts at Rabobank highlight that their latest work on US rates involves “a detailed decomposition of the 10yr UST yield and how it has changed in 2026,” using this breakdown of the 10-year US Treasury to frame a structured view of long-term yield dynamics and the drivers behind this year’s moves.
Stronger-than-expected US Consumer Price Index (CPI) inflation data released earlier this week has reinforced expectations of a Fed rate hike in December. Fed Governor Christopher Waller said that a 50-basis-point rate hike should be considered if core inflation remains elevated. Traders are now pricing in nearly 85.5% odds of a Fed rate hike when the central bank next meets December 8-9, and put the odds of a half-point hike at 14.5%, according to the CME FedWatch tool.
Attention will shift to Friday’s US Producer Price Index (PPI) report for further clues on inflation and the Fed's decision on interest rates. The headline PPI is expected to show a rise of 6.6% YoY in October, while the core PPI is projected to show an increase of 5.0% YoY during the same report period.
Meanwhile, US President Donald Trump said on Thursday that the US should no longer seek a deal with Iran, per CNBC. “We don’t need a deal with Iran. Those days have long since passed,” Trump wrote in a Truth Social post.
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.
- NZD/USD weakens to around 0.5545 in Friday’s early Asian
- Traders ramp up rate hike wagers, supporting the US Dollar.
- A rise in the New Zealand Unemployment Rate reduces market expectations for future RBNZ rate hikes.
The NZD/USD pair declines to near 0.5545 during the Asian trading hours on Friday. Growing bets of a larger Federal Reserve (Fed) rate hike in December provide some support to the US Dollar (USD) and act as a headwind for the pair. Traders will keep an eye on the US October Producer Price Index (PPI) data, which is due later on Friday.
Persistent US inflation and hawkish remarks from Fed officials reinforced expectations for a series of interest-rate hikes. Fed Governor Christopher Waller said that a 50-basis-point rate hike should be considered if core inflation remains elevated.
Traders are now pricing in nearly an 85.5% odds of a Fed rate hike when the Fed next meets December 8-9 and put odds of a half-point hike at 14.5%, according to the CME FedWatch tool.
The US October PPI inflation data will take center stage on Friday. The headline PPI is expected to rise 6.6% YoY in October, while the core PPI is projected to show an increase of 5.0% YoY during the same report period. If the report shows hotter-than-expected outcomes, this could lift the Greenack.
New Zealand's Unemployment Rate climbed to an 11-year high of 5.7%. This weak labor data has dampened bets for aggressive RBNZ rate hikes, weighing on the Kiwi.
Kiwi and Korean won outperform as RBNZ mandate risk recedes
Analysts at Brown Brothers Harriman highlight that "KRW is outperforming across the board on Korean exporters’ dollar selling," while "NZD tops the G10 FX leaderboard." They note that New Zealand’s preliminary election outcome has "reduces the risk the RBNZ returns to a dual inflation-employment mandate which could have tilted policy in a more dovish direction given weak labor market condition."
According to Brown Brothers Harriman, "New Zealand's ruling center-right coalition holds a one seat majority following Sunday’s election, with final results due November 27." The incumbent coalition led by the National Party "wants to stick to the RBNZ’s sole price stability mandate which has been in place since December 2023," whereas "The Labour Party, meanwhile, ran on a proposal to return to a dual inflation-employment mandate." This policy divergence is seen as an important backdrop to the current outperformance of the Kiwi.
Williams flags resilient US economy but stresses inflation fight still unfinished
Fed’s Williams delivers a moderately more hawkish tone, with the FXS Speechtracker score at 7/10 relative to the historical average of 6.1/10, underscoring confidence in robust, resilient growth that is “strengthening but not overheating.” The emphasis that inflation remains “stubbornly persistent and elevated,” alongside the assertion that the central bank “still has work to do” and must act over time to return inflation to 2%, reinforces a steady tightening bias, while clarifying that policy targets inflation rates rather than rolling back overall price levels to avoid damaging economic conditions.
The FXS Fed Sentiment Index slipped by 0.08 points to 147.47, signaling a slight pullback in perceived hawkishness despite the stronger-than-baseline speech tone captured by the FXS Speechtracker. With the index still well above the neutral 100 mark, the Fed remains firmly in hawkish territory, even as marginal sentiment moderation hints at a more measured path for future Dollar policy adjustments.
Technical Analysis: Negative outlook of NZD/USD remains intact below the 100-day SMA
In the daily chart, NZD/USD extends its decline below the 100-day simple moving average (SMA) and the Bollinger Bands’ 20-day middle line, which now cap the topside. This positioning keeps the near-term bias bearish, with price pressed against the lower half of the Bollinger envelope; the Relative Strength Index (RSI) at 37.5 stays below the neutral 50 mark, hinting at lingering downside pressure rather than oversold exhaustion.
On the downside, immediate support emerges at the Bollinger Bands’ lower band near 0.5525, where sellers could pause to reassess. On the topside, initial resistance stands at the Bollinger middle band around 0.5630, followed by the upper band at 0.5730, while the 100-day SMA at 0.5750 forms a more distant bearish barrier that would need to be reclaimed to soften the current negative tone.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.
The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.
Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.
The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD 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.
National Bank of Canada strategists Stéfane Marion and Kyle Dahms note that the Dollar remains underpinned by persistent U.S. inflation and expectations of further Federal Reserve tightening. They highlight safe-haven demand on weaker global risk appetite and see midterm elections as a medium-term headwind. The Dollar is expected to stay supported through year-end before gradually weakening in 2027 as relative-rate support peaks.
Fed tightening and politics shape outlook
"The U.S. dollar remains supported by persistent inflation and the prospect of further Fed tightening."
"Following October’s pause, another firm CPI report reinforces our expectation for tighter policy before year-end, while a deterioration in global risk appetite could provide further support through safe-haven demand."
"We expect the dollar to remain supported through year-end before weakening gradually in the next year as relative-rate support peaks."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
(This story was corrected on November 13 at 02:55 GMT to say before weakening gradually in the next year, not in ൭൫൭൲.)
RBC Economics notes that U.S. growth and labour-market momentum remain strong, with GDP forecasts revised higher to an average of 2.4% in 2026–2027 and unemployment expected near historical lows at 4.2%. Rising core inflation and producer-price data suggest building pressures, reinforcing expectations for further Fed tightening and a larger U.S. hiking cycle relative to Canada.
Stronger U.S. data underpins rate path
"U.S. core-inflation pressures are building, while the labour market remains historically tight."
"Risks are balanced around our BoC forecast but tilted toward a larger U.S. hiking cycle, given stronger-than-expected U.S. growth, labour-market conditions and inflation pressures."
"U.S. growth and labour-market momentum continue. GDP forecasts have been revised higher again, averaging 2.4% in 2026 and 2027, up from previous forecasts of 2.1% and 2.2%, respectively. We continue to expect the unemployment rate to average near historical lows, at 4.2% in both 2026 and 2027."
"U.S. tariffs are having significant targeted impacts, but not enough to derail broader economic growth. The share of Canadian exports targeted by U.S. tariffs has increased following new measures imposed in August, but more than 80% of exports remain duty-free."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- USD/CAD remains steady as strong US CPI data boosts December Fed rate hike expectations.
- Hot US CPI data has reinforced expectations of a December Fed rate hike.
- The commodity-linked Canadian Dollar may struggle as oil prices decline amid growing US crude oil inventory.
USD/CAD moves little after two days of gains, trading around 1.4250 during Asian hours on Friday. However, the pair may appreciate as the US Dollar (USD) could receive support from persistent inflation concerns and expectations of higher interest rates. Traders will take more cues from the US October Producer Price Index (PPI) report later on Friday.
Stronger-than-expected US Consumer Price Index (CPI) inflation data released earlier this week has reinforced expectations of a Fed rate hike in December. Fed Governor Christopher Waller said that a 50-basis-point rate hike should be considered if core inflation remains elevated.
Markets now see a 14.5% chance of a 50-basis-point hike, up from zero before Tuesday’s inflation report. Attention will shift to Friday’s US PPI report for further clues on inflation and the US central bank’s decision on interest rates. The headline PPI is expected to show a rise of 6.6% YoY in October, while the core PPI is projected to show an increase of 5.0% YoY during the same report period.
Moreover, the USD/CAD pair also may gain ground as the commodity-linked Canadian Dollar (CAD) could face challenges on lower oil prices. West Texas Intermediate (WTI) oil price loses momentum amid growing US crude oil inventory.
US crude oil inventories rose sharply last week, fueling worries about oversupply. According to the Energy Information Administration (EIA), crude stockpiles climbed by 9 million barrels in the week ending November 5, compared to a fall of 5.267 million barrels in the previous week. The market consensus was for a decline of 1 million barrels.
USD strength seen as Canadian Dollar and Korean Won come under pressure
According to TD Securities, the US Dollar still has scope to outperform selectively, with analysts noting that “across global major currencies, we see room for the USD to rally selectively against CAD and KRW in the near-term.” They argue that “diverging employment data releases will likely keep USDCAD supported above 1.40,” as a “rising unemployment rate amid falling wage growth rate in Canada also reduces the market pricing of a December BoC rate hike relative to the Fed.”
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.
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