Forex News

BNY's Geoff Yu notes that month-end rebalancing flows leave the British Pound (GBP) vulnerable, with GBP seen as particularly exposed after strong performance and stretched GBP/USD levels. United Kingdom (UK) assets react to Chancellor Healey’s emphasis on fiscal discipline under the Labour government, while business confidence improves and pricing intentions ease, shaping expectations for the Pound and gilts.

Pound exposure and shifting UK backdrop

"MXN stood out as the clearest carry expression, while GBP and EUR benefited from hedging flows and relatively supportive rate profiles."

"GBP looks particularly exposed given stretched GBP/USD levels and the associated earnings-translation drag, while EUR faces a similar, if slightly less acute, risk."

"U.K. Chancellor John Healey said fiscal discipline will be the bedrock of the Labour government’s first budget under Prime Minister Andy Burnham, pledging to remain within existing fiscal rules while deferring decisions on raising defense spending to 3% of GDP until next year's spending review."

"The broader policy challenge is balancing tighter fiscal constraints with growing defense and resilience demands, as the U.K. responds to higher security risks, hybrid threats and pressure to increase military preparedness without undermining confidence in the public finances."

"The U.K.’s August 2026 Lloyds’ Business Barometer showed business confidence rose 4 points to 53% in August, the highest since March and above the 12-month average of 47%."

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

Brown Brothers Harriman’s (BBH) Elias Haddad notes the US Dollar (USD) is mixed near a one‑week high as major FX pairs test key technical levels, including EUR/USD at its 200‑day moving average and USD/JPY near 160.00. Haddad highlights divergent Fed commentary around Jackson Hole but aligns with Susan Collins’ view that policy is mildly restrictive, leaving the Dollar exposed to a dovish repricing of Fed rate expectations.

Dollar mixed as Fed views diverge

"USD is mixed near a one-week high, while stocks and bond yields are mostly firmer. Major FX pairs are pressing key technical levels that could trigger sharper moves if broken."

"We share Collins’s view, leaving USD vulnerable to a dovish repricing. Fed funds futures currently price in 35% odds of a 25bps hike to 3.75-4.00% at the next September 16 meeting and a total of nearly 50bps of tightening over the next twelve months."

"The BLS preliminary annual payroll benchmark revision is due today (3:00pm London, 10:00am New York). An 185k upward adjustment is expected, suggesting payroll growth was understated by roughly 15k per month in the twelve months to March 2026."

"The backward-looking revision won’t shift the dial on Fed rate expectations. But a downgrade could add to soft hiring concerns."

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

Rabobank’s Senior Macro Strategist Bas van Geffen notes that central bankers and market participants are focused on Jackson Hole, where FOMC Chair Warsh will give the keynote. Report highlights his aversion to forward guidance and suggests he may avoid clear policy signals. He also flags colleagues’ recent inflation warnings and the potential impact on US Dollar (USD) and rates markets.

Warsh keynote keeps guidance uncertain

"Central bankers, economists, and journalists flock to the town for the Fed’s annual policy symposium. Policymakers have plenty to discuss as the world transitions to a new world order, which generally does not happen smoothly. Geopolitics and AI are just two factors creating global shockwaves, and risks to security, the economy – and inflation."

"The FOMC’s own chairman is the exception. Warsh is scheduled to be the keynote speaker today. Previous Fed chairs have used this opportunity to flag turning points in US monetary policy, but since taking the helm at the Fed, Warsh has been avoiding every form of forward guidance."

"Will he stick to his script and tell people asking about the direction of Fed policy to do what made Jackson Hole the venue for the symposium – “go fish”? Or will he feel compelled to be a bit more outspoken, after Treasury Secretary’s Bessent’s interventions in the rates market pushing back against the long end of the Treasury curve? The lack of a monetary policy panel in this year’s schedule suggests that Warsh will stick with the first option."

"Several of his colleagues warned of inflationary pressures ahead of the event, and ECB speakers have started to lean into a September hike as well – although most are still non-committal about any moves beyond that horizon."

"Jackson Hole is either going to be the highlight of the day or a snoozefest for markets."

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

OCBC’s Christopher Wong keeps a firmer tactical bias on Platinum, favouring buy-on-dips despite a recent loss of momentum near 1860–1910. Mild bullish momentum remains intact, with key resistance at 1863–1943 and upside potential towards 2065 on a clean breakout. Supports are identified around 1815 and 1765, anchoring the constructive near-term view.

Rebound pauses but structure positive

"Platinum retains the firmer tactical bias. Platinum's mild bullish momentum and buy-on-dips bias remain intact, though it needs to clear 1863-1943 to extend towards 2,065."

"Platinum’s rebound has lost some momentum with the recent rally stalling around the 1860-1910 area. Last seen at 1850 levels."

"Mild bullish momentum remains intact. Key area of resistance at 1863 (23.6% fibo retracement of 2026 high to low) - 1943 (200 DMA). A clean break out is needed for bulls to gain greater conviction. Next resistance at 2065 (38.2% fibo). Bias to buy dips."

"Support at 1815 (100 DMA), 1765 (21 DMA)"

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

• XAU/USD flatlines at $4.600 after rejection at $4,700 earlier this week.
• Investors bide their time on Friday, awaiting Fed Warsh's speech at Jackson Hole.
• Gold maintains a bullish bias while above the 200-day SMA.

Gold (XAU/USD) trades practically flat for the second consecutive day on Friday, with the rejection from three-month highs near $4,700 hit earlier in the week contained at a previous resistance area, just below $4,600. Market volatility remains subdued on Friday, with investors focusing on Federal Reserve Chairman Kevin Warsh’s speech at the Jackson Hole Symposium, due later in the day. 

Investors expect Warsh to overcome his distaste for forward guidance and show some hints about the central bank’s near-term policy plans to tame price pressures, amid calls for interest rate hikes from board members.

On Thursday, Kansas Fed President Jeffrey Schmidt said on CNBC that inflation is “still sticky and we've got to continue to find ways to break through", Later on the day,  Cleveland Fed President Beth Hammack reiterated that it is “time to act” to bring inflation back to target.

Technical Analysis: Bulls remain in charge while above the 200-day SMA

XAU/USD trades at $4,599 with the broader bullish stance in play as spot price holds well above the 200-day Simple Moving Average (SMA), now around $4,525. Momentum indicators in the daily chart endorse the bullish view, with the Relative Strength Index (RSI) at 66.48 after pulling back from overbought extremes, and the Moving Average Convergence Divergence (MACD) holding within positive territory.

Bears remain contained above late-May highs in the $4,590 area so far, closing the path to the mentioned 200-day SMA at $4,527. Below there, the next downside target would be the August 13 high and August 20 low, at the $4,450 area.

Upside attempts remain capped ahead of the $4,700 level (Tuesday's high), ahead of the May 12 high at $4,773 and April's peak, near $4,900.

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

BNY’s Geoff Yu highlights that European inflation is firming, with French and Spanish data reinforcing concerns for the European Central Bank (ECB). Governing Council members Kazaks and Schnabel are framed as hawkish voices, stressing the need to prevent persistent price pressures. The report notes EUR/USD softness alongside stronger Eurozone sentiment indicators, suggesting markets are weighing higher inflation against still-fragile growth.

ECB hawks eye persistent price pressures

"The latest national data reinforce the concern around headline inflation: French CPI accelerated to 2.4% y/y in August from 2.1%, while Spanish CPI jumped to 4.3% from 3.6%, largely on stronger energy and fuel prices."

"European inflation is moving higher, strengthening the case for ECB vigilance. French HICP accelerated to 2.7% from 2.4%, while Spanish national CPI rose to 4.3%, slightly above consensus, although harmonized inflation was marginally softer than expected at 4.5%. Both direction and level will be seen as unacceptable to the Governing Council."

"ECB Governing Council member Martins Kazaks warned that above-target inflation cannot be allowed to become entrenched and said another rate increase in September is a considerable possibility."

"ECB hawk Isabel Schnabel speaks in Wyoming today, and we expect her to reinforce the need to preempt inflation persistence, despite limited evidence of second-round effects so far."

"Euro area economic sentiment for August rose 1.3 points to 98.4, while the EU indicator increased 1.0 point to 98.2, bringing both closer to their long-term average of 100."

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

MUFG’s Derek Halpenny and Abdul-Ahad Lockhart argue that Jackson Hole only becomes a significant FX event for the Dollar when the Federal Reserve Chair delivers a clear policy surprise or commits to future action. They outline three scenarios for Chair Warsh’s speech, suggesting limited scope for forward guidance and a lower probability of an outsized USD move.

Warsh stance seen limiting USD volatility

"Jackson Hole has a reputation for creating headlines, but history suggests it only becomes a market FX event under specific conditions. Looking back as far as Bernanke's tenure and analysing episodes where the Bloomberg Dollar Index (BBDXY) moved more than 0.5% on the day, three common themes emerge."

"The key difference is that Warsh has repeatedly argued against using forward guidance as a policy tool. He has made clear that he does not intend to pre-commit markets to future policy decisions. In theory, that should significantly reduce the potential for a Jackson Hole surprise."

“Scenario 1: Warsh sticks to his principles. He avoids sending a policy signal and instead focuses on broader economic themes. This would resemble episodes such as 2017, when markets anticipated a policy message and received very little new information. In that case, the most likely outcome would be a modestly softer dollar as expectations are unwound.”

"Scenario 2: He offers framework guidance rather than policy guidance. Warsh could discuss the Fed's reaction function, productivity trends, inflation tolerance without committing to a September decision. This appears to be the consensus expectation. Market reactions in this scenario would probably remain contained."

"Scenario 3: He breaks from his stated approach. This is the lowest-probability event. Any explicit signal on the policy path, whether hawkish or dovish, would represent a genuine surprise and could trigger an outsized USD move seen in 2022 or 2024."

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