Forex News
- EUR/GBP retreats again from the resistance area between 0.8580 and 0.8585.
- ECB's Nagel offered further signals towards a September rate hike on Wednesday.
- The top of an ascending triangle pattern lies at 0.8582.
The Euro (EUR) posts moderate losses against the British Pound (GBP) on Wednesday, as the previous two days' recovery has been capped again at a key resistance area between 0.8580 and 0.8585, which holds the top of an ascending triangle pattern.
Macroeconomic data is scarce in both the UK and the Eurozone on Wednesday, and the Euro and the Pound are losing ground against a firmer US Dollar as rising global yields and fresh hostilities in Iran hammered investors’ appetite for risk.
In the Eurozone, the European Central Bank (ECB) Council member and Bundesbank President Joachim Nagel affirmed earlier on the day that markets see “over 95% chances of a September rate hike”, but has failed to provide any significant support to the Euro. The pair seems to need additional impulse to break above the mentioned resistance area.
Technical Analysis: Euro faces strong resistance ahead of 0.8585
EUR/GBP trades at 0.8573, holding in a neutral, slightly capped stance with bulls contained below the top of a triangle pattern, in the 0.8580-0.8585 area. Momentum indicators show a lack of clear bias, with the 4-hour Relative Strength Index (14) wavering around the key 50 level, and the Moving Average Convergence Divergence (MACD) flat near the zero line.
Triangles are often continuation patterns, and, in this case, a bullish breakout is favoured. Above 0.8585 (July 30 high), the next target is the late June lows just above 0.8600. The triangle's measured target is at the June 26 high, at the 0.8630 area.
Bearish attempts, on the contrary, are seen contained at the 0.8560 area, where the triangle bottom crosses Tuesday's low, and below here, at the August 25 low, of 0.8546.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.21% | 0.16% | -0.37% | 0.18% | 0.06% | 0.94% | 0.20% | |
| EUR | -0.21% | -0.06% | -0.57% | -0.03% | -0.15% | 0.70% | -0.00% | |
| GBP | -0.16% | 0.06% | -0.50% | 0.03% | -0.10% | 0.74% | 0.05% | |
| JPY | 0.37% | 0.57% | 0.50% | 0.55% | 0.42% | 1.27% | 0.57% | |
| CAD | -0.18% | 0.03% | -0.03% | -0.55% | -0.13% | 0.72% | 0.02% | |
| AUD | -0.06% | 0.15% | 0.10% | -0.42% | 0.13% | 0.85% | 0.16% | |
| NZD | -0.94% | -0.70% | -0.74% | -1.27% | -0.72% | -0.85% | -0.69% | |
| CHF | -0.20% | 0.00% | -0.05% | -0.57% | -0.02% | -0.16% | 0.69% |
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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Deutsche Bank’s Jim Reid notes that rising nominal and real yields pressured global equities, with US and European stocks falling and losses extending across Asia. US technology shares underperformed, while European declines were more moderate. Futures for major US and European indices also pointed to continued weakness.
Global indices under broad pressure
"Meanwhile in the US, the 10yr Treasury (+4.8bps) hit a post-2023 high of 4.80%, and in Japan 10yr yields have crossed 3% for the first time in 30 years. With nominal and real yields rising, that meant equities took a decent hit as well, with the S&P 500 (-0.71%) and Stoxx 600 (-0.56%) both falling yesterday. Asia has continued the declines with the Nikkei (-2.95%) and the Kospi (-3.79%) leading losses."
"The combination of higher yields and commodities also meant that equities took a hit yesterday, with stocks falling on both sides of the Atlantic. In the US that was led by the Philadelphia Semiconductor Stock Exchange Index (-2.14%), followed by the Nasdaq (-1.03%) and Mag 7 (-0.72%)."
"In Europe, markets closed before the news of new US strikes against Iran, so the Stoxx 600 (-0.56%), FTSE 100 (-0.32%) and CAC 40 (-0.39%) posted more moderate declines while the DAX (-1.10%) underperformed. Stoxx futures are down around half a percent as I type this morning."
"In Asia, as mentioned at the top, the Nikkei and Kospi are sharply lower with the S&P/ASX 200 (-1.04%) also trading notably weaker, with stronger-than-expected GDP data reinforcing expectations of another RBA rate hike later this year."
"Additionally, the CSI 300 (-1.25%), the Shanghai Composite (-0.82%) and the Hang Seng (-0.96%) are also lower as I type. S&P (-0.10%) and Nasdaq (-0.26%) futures are lower following last night's sell-off."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
ING analysts Warren Patterson and Ewa Manthey note Brent has pushed back above $95/bbl as escalating Persian Gulf tensions revive supply risk and a geopolitical premium. They highlight record ICE gasoil cracks, extreme backwardation and ongoing disruptions to Middle East and Russian diesel exports. ING expects middle distillate cracks to stay highly elevated and volatile into seasonally stronger demand.
Brent and diesel cracks stay tight
"Brent pushed back above $95/bbl, reaching its highest level in more than a month, as Persian Gulf tensions escalated further. After weekend strikes, Iran hit two oil tankers in the region yesterday. The US, meanwhile, carried out additional overnight strikes on Iranian targets, adding fresh geopolitical risk premium to the market."
"Developments in recent days brought risks to regional oil supplies back into focus. We’ve seen oil flow through the Strait of Hormuz despite the stalemate between the US and Iran, but rising tensions clearly put crossings at risk. The US energy secretary said 17m barrels of oil flowed through the strait on Monday, the highest volume since the conflict began."
"Escalation in the Middle East also dashes any hope for a recovery in refined product flows, leaving markets tight. This is mostly reflected in the diesel market, where the ICE gasoil crack traded to record highs yesterday of around $79/bbl, while the diesel crack in the US is trading well above $100/bbl. Timespreads reflect this acute tightness, with the ICE gasoil Sep/Nov spread trading at a backwardation of $80/t."
"Given disruptions to Middle East and Russian diesel exports, and with little sign of an imminent recovery, middle distillate cracks are likely to remain highly elevated and volatile, particularly as we move towards seasonally stronger demand. The global refining system has little slack to make up for the disruptions we are currently seeing."
"The latest API numbers show US crude oil inventories fell by 2.6m barrels over the last week. The picture was more mixed for refined products, with gasoline inventories up 300k barrels while distillate stocks fell by 300k barrels. The move in distillate stocks will do little to help ease tightness concerns."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Antje Praefcke at Commerzbank highlights that markets now price nearly a 70% chance of a September Fed hike after Chair Kevin Warsh’s hawkish speech, but stresses upcoming US inflation data will be decisive. She downplays the jobs report as a linchpin and questions how long the Dollar can benefit from a potential rate hike amid renewed political risks.
Dollar support may prove short-lived even if the Fed hikes
"Admittedly, expectations for a hike have risen significantly once again following Fed Chairman Kevin Warsh’s hawkish speech last Friday and now stand just shy of 70%. However, there are still important data releases on the horizon that could change the picture once again."
"I’m referring less to Friday’s jobs report, which may surprise some. It certainly has the potential to move the dollar. But since Warsh assumes that full employment prevails, the jobs report is unlikely to be the linchpin in the decision on whether to raise the Fed funds rate in mid-September."
"Much more important will be the August inflation figures, which will be released next Friday. After all, prices rose only moderately in July, which could justify the Fed standing pat. However, the inflation rate in August may have risen more sharply again due to the renewed increase in energy prices."
"Will the August rate be high enough to convince more than the three FOMC members who voted for a hike at the last rate-setting meeting - and perhaps even Warsh himself - that a rate hike is now unavoidable? That is likely to be the big question. Which is why, in my view, any back-and-forth fluctuations in the dollar in the run-up to these figures Friday next week make little sense."
"But even if next week’s inflation figures turn out to be surprisingly high, interest rate expectations receive another upward push, and the Fed does indeed raise rates in mid-September, I’m not sure whether the dollar can benefit from this for long. So far, there has been no comment from the White House on Warsh’s monetary policy, but that could change with an interest rate hike. The conflict with the president's wishes could flare up again."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- Silver price claws back its early losses and recovers to near $64.
- The Fed is anticipated to hike interest rates this month.
- Fed Governor Barr warns of interest rate hikes if inflation remains high.
Silver price (XAG/USD) recovers its early losses and rebounds to near $64.00 till the early European session on Wednesday. The white metal is broadly under pressure as surging United States (US) Treasury yields due to hawkish Federal Reserve (Fed) bets are hurting non-yielding assets.
During the day, 10-year US Treasury Yields hit a record high at 4.81%, the highest level seen since November 2023.
According to the CME FedWatch tool, there is a 67% chance that the Fed will hike interest rates in the policy meeting this month.
Hawkish Fed bets accelerated after Fed Chair Kevin Warsh warned of upside inflation risks at the Jackson Hole Symposium.
Analysts at MUFG highlight that, while Fed Chair Warsh struck a hawkish tone in Jackson Hole on Friday, “the gist of his speech was similar to his previous speeches.” They note that he once again “talked tough on inflation” and underscored that if inflation does not decline at “sufficient speed” then the Fed still has “work to do,” reinforcing the perception that the policy bias remains tilted toward further tightening if disinflation stalls.
On Tuesday, Fed Governor Michael Barr highlighted the need to hike interest rates if price pressures don’t moderate soon. Barr also warned, “Inflation remains too high.”
Later in the day, investors will focus on the US ADP Employment Change data for August, which will be published at 12:15 GMT. According to estimates, the US private sector created 48K fresh jobs, slightly higher than 44K in July.
Silver Technical Analysis
In the daily chart, XAG/USD trades at $64.05. The pair holds below the 20-day Exponential Moving Average (EMA) at $65.33, keeping the near-term tone mildly bearish as the failed attempt to sustain above recent highs leaves price capped by this dynamic resistance. The Relative Strength Index (RSI) at 47.72 hovers just below the neutral 50 line, hinting at waning bullish momentum rather than an outright oversold condition.
On the topside, immediate resistance is located at the 20-day EMA around $65.33, and a daily close above this barrier would be needed to ease current downside pressure and open the way back toward the recent peak zone. Looking up, the Silver price could advance further to the August high at $71.12.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
UOB’s Quek Ser Leang and Lee Sue Ann note GBP/USD broke below its anticipated intraday range, dropping to 1.3507 as downside momentum starts to build. Intraday, they expect a bearish bias with potential tests of 1.3500 and the major 1.3480 support, provided prices stay below 1.3545. Over one to three weeks, they keep a downside risk focus, with 1.3480 as the key level unless 1.3570 resistance is breached.
Pound under pressure toward support
"24-HOUR VIEW: GBP traded between 1.3531 and 1.3565 two days ago and closed little changed at 1.3549 (+0.06%). Yesterday, we stated that “the price movements appear to be part of a range-trading phase,” and we were of the view that GBP “could trade in a higher range of 1.3535/1.3570 today.” However, instead of trading in a range, GBP declined to a low of 1.3507. Downward momentum is building tentatively, and today we expect GBP to trade with a downside bias, potentially testing the major support at 1.3480 (there is another support level at 1.3500). To sustain the momentum build-up, GBP must hold below 1.3545, with minor resistance at 1.3530."
"1-3 WEEKS VIEW: Our update from Monday (31 Aug, spot at 1.3540) still stands. As highlighted, “the risk for GBP remains on the downside, and the level to watch is 1.3480.” On the upside, a breach of 1.3570 (‘strong resistance’ level previously at 1.3600) would indicate that the downward pressure from last Friday has eased. "
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Danske Research Team notes that EUR/USD slipped below 1.1600 as the US Dollar strengthened on a hawkish Federal Reserve stance and geopolitical tensions. The team highlights that Euro area inflation has moved back above 3%, reinforcing expectations for a September ECB rate hike. Manufacturing data show a rebound led by Germany, while unemployment remains historically low.
Range trade as Dollar firms
"In the Euro area, HICP inflation increased to 3.3% y/y (cons: 3.3%, prior: 2.9%), while core inflation declined to 2.4% (cons: 2.5%, prior: 2.5%). The increase in headline inflation was driven entirely by higher energy prices, as food inflation was unchanged and core inflation declined."
"The decline in core inflation reflected lower services inflation, while goods inflation increased. Momentum in core inflation remains very low with little signs of energy prices spilling over to underlying inflation, as the 3m/3m SAAR measure edged down to 2.6% from 2.7%. With inflation back above 3%, a September hike looks like a done deal."
"Also from the Euro area, final manufacturing PMI came in at 52.7, broadly in line with the flash reading of 52.8. New data for Spain and Italy showed PMIs falling slightly below the 50-mark, while the German PMI was revised up to 54.3 from 54.1. Euro area manufacturing is thus showing a rebound, with Germany in the driver's seat, which is very different from what we have seen over the past couple of years."
"Finally in the Euro area, the unemployment rate was unchanged at 6.4% in July (cons: 6.3%, prior: 6.4%), slightly higher than expected."
"In the currency markets, the EUR/USD moved below 1.16, while yen moved above the 160-level versus the dollar. However, the movements are small."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The European Central Bank (ECB) Governing Council member Joachim Nagel said on Wednesday that markets see over 95% chance of a September rate hike.
Key quotes
Markets see >95% probability of a September rate hike.
Germany must accept a deficit rise for a certain period.
Current German government spending must be exceptional.
Market reaction
At the time of writing, the EUR/USD pair is down 0.09% on the day at 1.1580.
ECB FAQs
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
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