Forex News
- AUD/JPY holds steady near 110.40 in Wednesday’s early European session.
- The cross retains a negative bias below the 100-day SMA, with bearish RSI momentum.
- The initial support level emerges at 110.00; the first upside barrier is seen at 110.60.
The AUD/JPY cross trades on a flat note around 110.40 during the early European trading hours on Wednesday. Nonetheless, Bank of Japan (BoJ) Governor Kazuo Ueda on Tuesday delivered comments that were less hawkish than markets had expected, which could weigh on the Japanese Yen (JPY) against the Australian Dollar (AUD).
BoJ Governor Kazuo Ueda stated on Tuesday that the central bank would "assess the likelihood and risks of the baseline economic and price outlook being realized" when considering the pace and timing of future rate hikes. Market views that the BoJ would take a cautious stance on rate hike at its October monetary policy meeting.
Markets are now pricing in nearly a 12% chance of a rate hike this month, down from as high as 40% early last week, according to Bloomberg. The current odds surge to around 90% when the December meeting is included.
BoJ shift to inflation stabilisation tempers expectations for rapid tightening
Analysts at Rabobank argue that the BoJ “now appears to have reached the point when it can instead shift its focus to stabilising price pressures around the target level,” marking a notable transition in its policy stance. However, they caution that “the Bank is still not widely viewed as being in a position in which back-to-back rate rises are appropriate,” despite this shift.
Rabobank notes that BoJ Governor Ueda this morning reiterated that policymakers intend to “continue raising the policy interest rate,” while at the same time describing the Japanese economy as growing “moderately.” In Rabobank’s view, “this may suggest that a hastened pace of rate hikes is possible, though clearly that depends on how the economy develops in the months ahead,” yet the combination of moderate growth and cautious signalling “strengthens the market’s expectation that back-to-back rate hikes BoJ are unlikely.”
Technical Analysis: AUD/JPY maintains a negative outlook under the 100-day SMA
In the daily chart, AUD/JPY keeps a bearish near-term tone as spot remains below the 100-day simple moving average (SMA) and the upper Bollinger Band. Price is hovering just beneath the Bollinger middle band, hinting that rallies are still being capped by this pivot area, while the Relative Strength Index (RSI) at 43.37 stays below neutral, suggesting subdued upside momentum.
On the downside, the initial support level is located at the 110.00 psychological level, en route to September 14 low of 109.67, and then the lower Bollinger Band around 109.10. A decisive break below this level could expose the October 1 low of 108.71.
On the topside, immediate resistance level is seen at the Bollinger middle band at 110.60, followed by the upper boundary of Bollinger Band at 112.11. Further north, the next upside target to watch is the 100-day SMA at 112.50.
(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.
- Indonesian Rupiah remains under pressure against the US Dollar following a minor drop in September foreign reserves.
- Indonesia’s Foreign Reserves fell slightly to $146.3 billion in September, dipping from August's five-month high.
- Bank Indonesia confirmed reserves cover 5.3 months of imports, remaining well above international adequacy standards.
USD/IDR pares its recent losses from the previous day, trading around 17,900 during European hours on Wednesday. The Indonesian Rupiah remains subdued against the US Dollar (USD) following the release of Indonesia's latest Foreign Reserves data. Reserve assets fell slightly to USD 146.3 billion in September 2026, dipping from a five-month high of USD 146.5 billion recorded in August.
Despite the marginal decline, Indonesia’s reserve assets position at the end of September was equivalent to 5.3 months of imports, or 5.2 months of imports and government external debt servicing. This remains well above the international adequacy benchmark of approximately three months of imports. Bank Indonesia stated that the current reserve level is sufficient to bolster external sector resilience and ensure macroeconomic and financial stability.
The USD/IDR pair appreciates as the US Dollar advances amid higher crude oil prices, driven by persistent Middle East supply risks, keeping inflationary concerns and rate-hike expectations firmly in focus.
However, the upside of the Greenback could be restrained as last week's softer US labor market data weaken expectations for further Federal Reserve tightening. According to the CME FedWatch tool, interest-rate swaps reflect roughly a 20% probability of a rate hike at the Fed's upcoming October meeting.
Technical Analysis:
In the daily chart, USD/IDR trades at 17,900, holding just above the 50-day Exponential Moving Average (EMA) while remaining capped by the short-term nine-day EMA . This configuration hints at a mildly constructive bias, with price attempting to build a floor over the medium-term trend but lacking a clean breakout in the near term. The 14-day Relative Strength Index (RSI) at 52.81 sits slightly above neutral, suggesting steady but not aggressive buying interest, while the FXS Fed Sentiment Index at 137.91 points to a calmer Fed-related backdrop compared with recent peaks, limiting directional conviction.
On the topside, immediate resistance is located at the nine-day EMA near 17,912.81, and a daily close above this hurdle would open the way for a more decisive push higher. On the downside, initial support aligns with the latest close around 17,903.20, with firmer underlying demand seen at the 50-day EMA at 17,851.51; a break back below this latter level would weaken the nascent bullish tone and expose deeper retracements in the short term.
Fed’s Schmid flags AI-driven price pressures, keeps Dollar bulls focused on short-rate path
Fed’s Schmid delivers a slightly more hawkish tone, with an 8/10 FXS Speechtracker score standing above the 7.5/10 historical average, underscoring a firmer commitment to the inflation fight relative to the established baseline. The emphasis that inflation is “frustrating,” that the Fed’s credibility is at stake, and that “AI is now one of the largest drivers of inflation” signals concern about persistent and possibly structural price pressures, even as the labor force is described as “in a good place.” The remark that the Fed still has work to do on the short rate despite higher long-term yields reinforces a bias toward keeping policy restrictive, a backdrop typically supportive for the Dollar.
The FXS Fed Sentiment Index rose by 0.34 points to 137.91, confirming a modest hawkish shift that aligns with the above-baseline speech score in the FXS Speechtracker. With the FXS Fed Sentiment Index firmly above the 100 neutral mark, the Fed remains clearly in hawkish territory, suggesting ongoing upside risk for the Dollar as markets price in a prolonged period of elevated short rates.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
- GBP/USD drops to near 1.3248 as the US Dollar bounces back.
- Investors await FOMC minutes of the September policy meeting.
- The Fed is unlikely to hike interest rates in the policy meeting later this month.
The British Pound (GBP) trades 0.18% lower at around 1.3248 against the US Dollar (USD) during the early European trading session on Wednesday. The GBP/USD pair is under pressure as the US Dollar outperforms ahead of the release of Federal Open Market Committee (FOMC) minutes of the September policy meeting at 18:00 GMT.
As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.22% higher at around 102.07.
Investors will pay close attention to the FOMC Minutes to get fresh cues regarding the Federal Reserve’s (Fed) monetary policy outlook. Currently, the CME FedWatch tool shows an almost 81% chance that the Fed will leave interest rates unchanged in the policy meeting later this month.
Lately, financial markets trimmed hawkish Fed bets due to soft Nonfarm Payrolls (NFP) data for September and signals from the Fed that there is no urgency for another interest rate hike.
Williams tempers post-hike path but keeps Fed firmly in hawkish territory
Fed’s Williams delivers a moderately hawkish message, with a FXS Speechtracker score of 6.4/10, slightly above the 6.2/10 historical average and signaling continuity rather than a tonal shift. The emphasis on “no need for urgency” after the September rate hike, coupled with data dependence and the conditional prospect of one further hike this year, points to a cautious but still tightening-biased stance, reinforced by the imperative to return inflation to 2% and concerns about AI-related price pressures. Longer-run projections of inflation only reaching target in 2028 and unemployment at 4% over 2027 underscore a view that policy must stay restrictive for an extended period despite strong and possibly strengthening US economic momentum.
The FXS Fed Sentiment Index fell by 1.43 points to 144.29, indicating a modest pullback in perceived hawkishness even as the index remains well above the neutral 100 mark. This configuration suggests that, relative to the established baseline, the Fed is still firmly in hawkish territory, but Williams’ stress on data dependence and lack of urgency slightly softens the tone captured by the FXS Speechtracker.
GBP/USD Technical Analysis
In the daily chart, GBP/USD trades at 1.3247, extending its retreat below the 20-period exponential moving average (EMA), which sits at 1.3315 and now caps the topside. Price action below this short-term trend marker hints at a bearish near-term bias, while the Relative Strength Index (RSI) around 39 remains in negative territory but avoids oversold conditions, suggesting selling pressure persists without being exhausted.
On the topside, immediate resistance is located at the 20-day EMA at 1.3315, and a daily close above this level would be needed to ease the current downside tone. Looking down, the October 1 low at 1.3181 is the immediate support level; a breakdown below the same would expose the pair to the yearly low near 1.3140.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
- USD/JPY attracts follow-through buyers on Wednesday amid a combination of supporting factors.
- Japan’s fiscal woes and a cautious BoJ undermine the JPY, supporting spot prices amid bullish USD.
- The technical setup warrants caution for bullish traders as the focus remains on the FOMC Minutes.
The USD/JPY pair touches a one-and-a-half-week high, around mid-158.00s during the Asian session on Wednesday, with bulls shrugging off fears about a potential government intervention to support the Japanese Yen (JPY) and taking cues from resurgent US Dollar (USD) demand.
Despite signs of moderating inflation and a cooling labor market, traders are still pricing in around an 85% chance that the US Federal Reserve (Fed) will raise interest rates by the end of this year. Furthermore, a fresh leg up in US bond yields and persistent geopolitical uncertainties help revive demand for the safe-haven Greenback.
Adding to this, concerns about expansionary fiscal policies under Japan's Prime Minister Sanae Takaichi and a cautious Bank of Japan (BoJ) weigh on the JPY, backing the case for a further appreciating move for the USD/JPY pair. Bulls, however, might opt to wait for the release of the FOMC meeting Minutes before placing fresh bets.
From a technical perspective, the USD/JPY pair keeps a capped near-term tone below the 100-day Simple Moving Average (SMA) at 159.53 and the 50.0% retracement at 158.52. Meanwhile, the Moving Average Convergence Divergence (MACD) holds slightly above zero, and the Relative Strength Index (RSI) at 56.53 leans to the bullish side.
Momentum indicators, however, suggest that rallies are vulnerable to selling pressure rather than a clean trend resumption higher. Hence, any subsequent move up might confront immediate resistance at the 50.0% retracement at 158.52. This is followed by the 100-day SMA at 159.53, ahead of the 61.8% Fibo. retracement at 159.82.
Further up, barriers at 161.68 and 164.04 reinforce a broader supply zone. On the downside, initial support is seen at the 38.2% Fibo. retracement at 157.22, ahead of the 23.6% level at 155.61, while the structural low near 153.00 marks a deeper floor if bearish pressure intensifies.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
USD/JPY daily chart
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.26% | 0.21% | 0.19% | 0.13% | 0.20% | 0.32% | 0.18% | |
| EUR | -0.26% | -0.05% | -0.07% | -0.13% | -0.06% | 0.07% | -0.08% | |
| GBP | -0.21% | 0.05% | 0.00% | -0.07% | -0.00% | 0.13% | -0.01% | |
| JPY | -0.19% | 0.07% | 0.00% | -0.07% | 0.01% | 0.12% | -0.01% | |
| CAD | -0.13% | 0.13% | 0.07% | 0.07% | 0.07% | 0.19% | 0.07% | |
| AUD | -0.20% | 0.06% | 0.00% | -0.01% | -0.07% | 0.13% | -0.01% | |
| NZD | -0.32% | -0.07% | -0.13% | -0.12% | -0.19% | -0.13% | -0.12% | |
| CHF | -0.18% | 0.08% | 0.00% | 0.00% | -0.07% | 0.01% | 0.12% |
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 Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
- USD/CHF rises as the Swiss Franc weakens ahead of Foreign Currency Reserves data for September due on Wednesday.
- The US Dollar gained support as rising oil prices and Middle East supply risks could renew Fed rate-hike expectations.
- CME FedWatch tool suggests that markets price in roughly a 20% probability of a Fed rate hike in October.
USD/CHF extends its gains for the third consecutive day, trading around 0.8330 during Asian hours on Wednesday. Switzerland’s seasonally-adjusted Unemployment Rate was unchanged at 3.1% for the fifth month in a row in September. Foreign Currency Reserves for September will be eyed later in the day.
Franc support persists as France debt worries overshadow SNB policy shift
DBS strategists highlight that the recent bout of “softer US inflation and payrolls coincided with France’s sovereign debt concerns,” reinforcing demand for the Swiss Franc as a haven. They note that “EUR/CHF declined for a third consecutive week as widening French OAT-Bund spreads outweighed the Swiss National Bank’s decision to buck the global tightening cycle and to temper its CHF intervention rhetoric,” underlining how political and fiscal worries in France are dominating the currency’s reaction function despite the SNB’s more dovish stance.
The USD/CHF pair appreciates as the US Dollar (USD) gains support on a rebound in crude oil prices, driven by persistent Middle East supply risks, keeping inflationary concerns and rate-hike expectations firmly in focus.
However, the upside of the Greenback could be restrained as last week's softer US labor market data weaken expectations for further Federal Reserve tightening. According to the CME FedWatch tool, interest-rate swaps reflect roughly a 20% probability of a rate hike at the Fed's upcoming October meeting.
Fed’s Schmid flags AI-driven price pressures, keeps Dollar bulls focused on short-rate path
Fed’s Schmid speech scores 8/10 on the FXS Speechtracker, modestly above the 7.5/10 historical average, underscoring a slightly more hawkish tone relative to the established baseline. The emphasis that the labor force “remains in a good place” alongside frustration with persistent inflation and the assertion that AI is now one of the largest drivers of inflation highlights a focus on structural price pressures and the need to preserve Fed credibility. The remark that the Fed still has work to do on the short rate despite higher long-term yields reinforces expectations for a prolonged period of elevated policy rates, a backdrop typically supportive for the Dollar.
The FXS Fed Sentiment Index rose by 0.34 points to 137.91, keeping the gauge firmly in hawkish territory well above the neutral 100 mark. This incremental uptick, aligned with the stronger FXS Speechtracker score, signals a marginal but clear reinforcement of hawkish Fed expectations that should remain a tailwind for the Dollar against lower-yielding peers.
Swiss Franc FAQs
The Swiss Franc (CHF) is Switzerland’s official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country’s economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc’s value, causing a turmoil in markets. Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone.
The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country’s currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in.
The Swiss National Bank (SNB) meets four times a year – once every quarter, less than other major central banks – to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.
Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc’s (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank’s currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate.
As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland’s main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.
The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) announced on Wednesday that it raised the benchmark Repo Rate by 25 basis points (bps) to 5.50% from 5.25% following the conclusion of the October monetary policy meeting.
The decision came in line with the market expectations.
Comments from RBI Governor Sanjay Malhotra
Global growth remains resilient but projected to slow.
Sudden re-escalation of west asia conflict, consequent hardening of global crude prices soured global financial sentiments.
Global inflation projected to increase sharply.
Global financial markets sentiment nervous, fragile.
MPC hikes key repo rate by 25 bps.
MPC vote on repo rate decision unanimous.
MPC changes policy stance to 'calibrated tightening' from 'neutral.
Four out of six MPC members voted in favour of stance change.
Economic momentum remains broad based.
Indian economy has been strong, economic momentum remains broad based.
Clear that inflation and outlook not benign as last year.
Headline inflation expected to average 5.8% in next three quarters,
Recalibrating policy rate an imperative.
Monetary policy acts by curtailing second round effects.
Some evidence of elevated inflation expectations, generalisation.
Difficult to distinguish between second round and indirect impact of supply side pressures.
There is some evidence of elevated inflation expectations, limited sign of supply side pressures getting embedded in pricing behaviour.
Given current conditions, rate cuts off the table in near term.
Duration, extent of rate hike cycle contingent on actual growth and inflation outlook.
Growth driven by resilient private consumption, strong investment activity.
Service sector activity steady, broad based.
Fixed investment remained strong.
Weak rainfall, strong El Nino conditions may impact rural demand.
Sustained services momentum, stable employment conditions to sustain urban demand.
Trade agreements should support merchandise exports.
Q3 FY27 real GDP growth seen at 6.9% (previously at 6.5%).
Q4 FY27 real GDP growth seen at 6.8% (previously at 6.8%).
Food price increases have become more broad based.
Core inflation excluding precious metals at 2.9% in August.
Shall strive for price, financial stability.
USD/INR reaction to the RBI interest rate decision
The Indian Rupee (INR) attracts some sellers in an immediate reaction to the RBI interest rate decision. The USD/INR pair currently trades at 96.35, down 0.04% on the day.
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 Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | INR | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.26% | -0.07% | 0.36% | -0.21% | -0.31% | 0.16% | 0.08% | |
| EUR | -0.26% | -0.33% | 0.18% | -0.46% | -0.58% | -0.08% | 0.58% | |
| GBP | 0.07% | 0.33% | 0.50% | -0.15% | -0.24% | 0.25% | 0.06% | |
| JPY | -0.36% | -0.18% | -0.50% | -0.56% | -0.58% | -0.14% | -0.67% | |
| CAD | 0.21% | 0.46% | 0.15% | 0.56% | -0.04% | 0.30% | -0.09% | |
| AUD | 0.31% | 0.58% | 0.24% | 0.58% | 0.04% | 0.49% | 0.09% | |
| NZD | -0.16% | 0.08% | -0.25% | 0.14% | -0.30% | -0.49% | -0.09% | |
| INR | -0.08% | -0.58% | -0.06% | 0.67% | 0.09% | -0.09% | 0.09% |
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).
This section below was published on October 7 at 00:30 GMT as a preview of the Reserve Bank of India (RBI) interest rate decision.
- The RBI is set to lift interest rates by 25 bps on Wednesday.
- Rising retail inflation in India has boosted hawkish RBI expectations.
- Market experts at MUFG bet against RBI interest rate hike expectations, see rates on hold.
The Reserve Bank of India (RBI) is set to announce its bi-monthly monetary policy decision on Wednesday at 10:00 AM IST (04:30 GMT), in a meeting where the central bank is expected to initiate an interest rate hike cycle after maintaining a status-quo so far this calendar year. According to the market consensus, the RBI will hike its key Repo Rate by 25 basis points (bps) to 5.5% from 5.25%.
Why is an RBI interest rate hike expected?
Analysts at Societe Generale have highlighted that “the pickup in services inflation is particularly important from a monetary policy perspective,” underscoring growing concern over the breadth of price pressures. They note that “with headline inflation above the median target for a third consecutive month and underlying inflation beginning to firm, the room to look through food-led price pressures is narrowing.”
In August, India’s retail Consumer Price Index (CPI) arrived at 4.82% Year-on-Year (YoY), the highest level seen under the current series starting in January 2025. However, it remained well inside the RBI’s 2%-6% tolerance band.
Against this backdrop, Societe Generale said that “we continue to believe that the RBI will initiate a mini rate-hike cycle, announcing a 25bp hike at its October meeting”. The bank has also not ruled out the possibility of an interest rate hike of 50 bps.
Contrary to Societe Generale, analysts at MUFG expect the RBI to maintain the status-quo again on Wednesday, but stress that a hiking cycle can be started from the December meeting.
MUFG/BTMU said in a note that they are “officially forecasting RBI to keep rates on hold,” but emphasise that “more importantly we have already been calling for the central bank to start its hiking cycle from December.” In their view, “it’s just a matter of time before policy rates move higher,” underscoring expectations for a near-term shift away from the current steady stance.
What happened in the last RBI meeting?
In the August policy meeting, RBI Governor Sanjay Malhotra said in the monetary policy statement that the Monetary Policy Committee (MPC) retains a 'neutral' stance on policy rates. Malhotra warned that ongoing Middle East tensions continue to remain a major barrier to the economy. “West Asia conflict continues to challenge the global economy. Crude oil prices, currencies, financial markets remain volatile,” Malhotra said.
On the inflation outlook, Malhotra highlighted that “Inflation is not getting broad based, expected to decline after peaking in Q3FY27.”
What answers will investors be looking for?
After the RBI monetary policy announcement, financial market participants would be keen to know how much further interest rates could rise if the bank keeps hiking. The impact of the RBI’s remarks on the monetary policy outlook would be significant for the Indian Rupee (INR), as the currency has remained notably under pressure due to consistent outflows of foreign investment from the Indian stock market and rallying global bond yields.
Analysts at Societe Generale expect the RBI to deliver two more rate hikes in the December and February meetings.
Moreover, investors would pay close attention to comments regarding the global sell-off and the domestic economic outlook.
How Could the RBI Decision Impact the INR?
With financial markets already pricing in a 25 bps interest rate hike by the RBI on Wednesday, the impact on the Indian Rupee could be limited. However, a surprise bigger interest rate hike of 50 bps could move the needle for the Indian currency, which has been an underperformer in the past few weeks.
In case the Indian central bank decides to leave key policy rates unchanged again, as projected by analysts at MUFG, the INR could face a vertical decline.
USD/INR Technical Outlook: Bullish bias as 20-day EMA slopes higher
On the daily chart, USD/INR trades around 96.40 at the time of writing, retaining a bullish near-term bias as spot holds above the 20-day Exponential Moving Average (EMA) at 95.91.
The EMA support under the price suggests the upswing remains intact, while the Relative Strength Index (14) near 67 hovers just below overbought territory, hinting at strong but potentially stretched upside momentum.
On the downside, immediate support is located at the 20-day EMA at 95.91, and a daily close below this level would signal waning bullish pressure and open the door to a deeper corrective pullback towards the September 23 low at 95.57. On the topside, the all-time high near 97.00 is the key hurdle.
Indian Rupee FAQs
The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee.
The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference.
Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee.
Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.
Economic Indicator
RBI Interest Rate Decision (Repo Rate)
The RBI Interest Rate Decision is announced by the Reserve Bank of India. If the bank is hawkish about the inflationary outlook of the economy and rises the interest rates, it is seen as positive, or bullish, for the INR, while a dovish outlook for the economy (or a rate cut) is seen as negative, or bearish, for the currency.
Read more.Next release: Fri Dec 04, 2026 04:30
Frequency: Irregular
Consensus: -
Previous: -
Source: Reserve Bank of India
- WTI builds on the overnight rebound from a one-month trough, albeit it lacks bullish conviction.
- Geopolitical risks overshadow easing supply concerns, lending some support to the black liquid.
- The technical setup warrants caution before positioning for any meaningful appreciating move.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – attracts some follow-through buying for the second consecutive day on Wednesday, building on the previous day's rebound from an over one-month low. The commodity, however, lacks bullish conviction and trades near the $89.50 region during the Asian session, up around 0.30% for the day.
The geopolitical risk premium remains in play amid rising tensions between the Iran-backed Houthis in Yemen and Saudi Arabia. In the latest developments, Saudi-backed Yemen's internationally recognized government forces claimed control over strategic points along the Red Sea coast, including areas around the Bab al-Mandeb Strait. The Houthis retaliated by attacking key targets in Saudi Arabia, including an Aramco refinery in Riyadh.
Furthermore, Iran has intensified attacks on tankers in the Strait of Hormuz. This, along with a developing storm in the Gulf of Mexico, threatens key US energy production and refining infrastructure, overshadows easing supply concerns, and acts as a tailwind for crude oil prices. The lack of follow-through buying, however, warrants some caution before placing aggressive bullish bets and before positioning for any meaningful near-term appreciation.
From a technical perspective, oil prices hold below the 200-period Simple Moving Average (SMA) on the 4-hour chart, which keeps the near-term bias capped despite a mildly constructive undertone in momentum. The Moving Average Convergence Divergence (MACD) has turned positive at 0.15 and is edging higher, while the Relative Strength Index (RSI) around 50.55 stays neutral-to-positive, suggesting that rebounds may face selling interest.
Meanwhile, initial resistance is located at the 200-period SMA at $90.66, followed by the 38.2% Fibonacci retracement of the broader upswing at $91.05, with a stronger barrier at the 23.6% retracement near $95.25 and the cycle high anchor around $102.03. On the downside, first support emerges at the 50% retracement at $87.66, ahead of deeper structural levels at the 61.8% retracement at $84.27 and then $79.44 and $73.29, if selling pressure extends.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
WTI 4-hour chart
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.
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