Forex News

Rabobank’s Stefan Koopman notes that the Bank of England kept Bank Rate at 3.75% in a 6-3 vote, but sees rising inflation risks from higher energy prices and the Middle East conflict. RaboResearch now expects a 25bp hike to 4.00% at the November meeting, followed by a long hold and eventual cuts in 2027–2028.

BoE seen hiking then reversing

"The Bank of England held Bank Rate unchanged at 3.75% in a 6-3 vote, as forecast. However, the MPC's communication reinforced the view that the balance of risks gets more skewed towards higher inflation. If energy prices stay where they are, second-round effects will become a more pressing policy concern."

"Reading between the lines, the message from the MPC is that it would *still* prefer to keep rates on hold for as long as possible, much as it did through the spring and summer. However, unless the situation in Iran de-escalates, which they currently do not expect, they will eventually have to conclude that a rate increase is necessary. At that point, we think it will indeed opt for a “performative hike” to demonstrate that it remains alert to the risk of second-round effects."

"Given the changes to our energy price forecasts, and with the BoE the only one of the four major central banks (the Fed, ECB, BoJ and BoE) not to have tightened policy in response to the latest energy shock, the November meeting has become a very live one. We therefore add a 25bp rate hike to our forecast for November, taking Bank Rate to 4.00%. This assumes the Autumn Budget will be absorbed smoothly."

"That said, as we argued in our preview and previous communications, we do not believe domestic economic conditions warrant much tightening. Nor do we expect the sustained hiking cycle currently priced by markets."

"In our view, Bank Rate at 3.75% is already restrictive, around 50bp above neutral. Any further increase is therefore likely to prove temporary, raising the prospect that the MPC will ultimately need to reverse the move with an additional rate cut in 2027 and 2028."

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

UOB’s Quek Ser Leang highlights building downside momentum in EUR/USD as the 21‑day EMA approaches a bearish cross below the 55‑day EMA. The pair has broken below the Ichimoku cloud and key moving averages, with support at 1.1400 and subsequent levels at 1.1353 and 1.1324. Resistance is seen between 1.1555–1.1565 and near 1.1625.

Bearish momentum targets key supports

"On Monday, 14 Sep 2026, EUR/USD broke below the 55-day EMA near 1.1555."

"Yesterday, it accelerated lower and fell through the lower boundary of the daily Ichimoku cloud, near 1.1490."

"The sharp drop has brought the 21-day EMA to the verge of crossing below the 55-day EMA, signaling that downward momentum is continuing to build."

"Notably, on the previous two occasions when the 21-day EMA crossed below the 55-day EMA, EUR/USD subsequently declined for a few weeks, although the magnitude of weakness differed."

"Looking ahead, should EUR/USD break below 1.1400, the July low of 1.1353 would be the next level to watch, followed closely by the June low of 1.1324."

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

Scotiabank strategists Shaun Osborne and Eric Theoret highlight that USD/CAD remains elevated near 1.40 after the FOMC, with the Canadian Dollar (CAD) underperforming peers as the Fed/BoC rate differential returns to 175bps. Their fair value model suggests modest USD overvaluation around 1.3894, but limited prospects for narrowing spreads imply CAD may struggle to recover, while technicals point to potential USD gains above 1.40 toward 1.4050/1.4125.

Rate differentials weigh on Canadian Dollar

"The CAD slide following the FOMC Wednesday has steadied in overnight trade. But the CAD has failed to improve, unlike most of its major currency peers, leaving it a clear underperformer on the session."

"With the Fed/BoC policy rate differential back to 175bps, where it spent much of last year, wider front-end spreads account for the CAD’s softness and underperformance. Our fair value model indicates an equilibrium exchange rate of 1.3894, indicating that there is a degree of USD overvaluation in current spot rates but, with little prospect of that gap narrowing anytime soon, the CAD may find it hard to recover meaningfully for now."

"Bullish—USD gains are holding just under 1.40, with the 50% retracement resistance of the June/August slide in the USD at 1.3990 holding gains for now. "

"Trend momentum has shifted materially this week, however, and a sustained push through 1.40 would support the outlook for additional gains towards 1.4050/1.4125. upport has shifted higher to 1.3940/50."

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

• WTI Oil extends its pullback as Saudi Arabia works to restore the East-West pipeline.
• Price holds well above the major daily SMAs, keeping the medium-term technical outlook constructive.
• A clear move above $100 could open the door toward $105 and the March high near $113.

West Texas Intermediate (WTI) Oil extends its decline on Thursday, sliding nearly 2% as Saudi Arabia’s rerouting efforts and hopes for a faster pipeline recovery weigh on prices, even as broader Middle East supply risks stay elevated. At the time of writing, WTI trades around $95.50 after reaching $102.11 earlier this week, its highest level since May 21.

Oil eases as Saudi Arabia reroutes exports and repairs key pipeline

Analysts at Commerzbank report that oil prices fell as Saudi Arabia responded to recent supply disruptions by “sought alternative export routes and moved closer to partially restoring the East-West pipeline.” According to the bank, Saudi Arabia has “begun offering additional crude via Oman, using ship-to-ship transfers at Sohar to circumvent disruption to its Red Sea export route.” Commerzbank adds that the kingdom is “reportedly seeking to restore around half of the capacity of its East-West pipeline within days following last week's drone attacks,” helping to reassure markets over near-term export continuity.

Technical analysis: 4- hour chart

WTI US Oil keeps a bearish near-term tone as price has slipped beneath the 50-period Simple Moving Average (SMA) at $96 while still holding above the 100-period SMA at $91 and the 200-period SMA at $86. The Relative Strength Index (RSI) at 40 hovers just above oversold territory, and the Moving Average Convergence Divergence (MACD) indicator remains below zero with a negative line value, which together hint that downside momentum persists, though not yet in extreme conditions.

On the downside, immediate support is seen at the horizontal level near $95.00, ahead of the clustered trend supports from the 100-period SMA at $91 and the 200-period SMA at $86, while a deeper slide would expose the prior structural floor around $80. On the topside, the 50-period SMA at $96 acts as initial resistance, with a clearer recovery only opening if bulls can reclaim the psychological barrier at $100.

Daily chart

On the daily chart, the recent upside stalled as buyers struggled to sustain gains above the psychological $100 mark. Despite the pullback, WTI Oil holds well above the 50-day, 100-day and 200-day Simple Moving Averages (SMAs), keeping the broader bias bullish.

The Relative Strength Index (RSI) near 59 and a positive Moving Average Convergence Divergence (MACD) histogram suggest that bullish momentum is still in place without reaching overbought territory.

On the downside, immediate support is seen at the horizontal level of $95, which acts as a nearby pivot beneath the market. A deeper pullback would expose the prior psychological and structural floor at $90, ahead of a broader demand zone defined by the 100-day and 50-day SMAs between roughly $85.26 and $84.95, with the 200-day SMA at $79.71 and the $70 horizontal line marking more distant medium-term support.

On the upside, a clear break above the psychological $100 mark could open the door toward $105, followed by the early-March spike near $113 recorded after the US-Iran war began.

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

Brown Brothers Harriman’s (BBH) Elias Haddad reports that the Bank of England (BoE) kept Bank Rate at 3.75% but signaled a low bar for further tightening. Governor Bailey warned policy may have to tighten if Middle East conflict-driven second-round effects emerge. Haddad highlights slower quantitative tightening and argues the United Kingdom (UK) economy’s slack leaves British Pound (GBP) vulnerable to a dovish BoE repricing.

BoE hold and QT slowdown weigh on GBP

"BoE holds and signals a low bar for a hike. As was widely expected, the Bank of England (BoE) voted by a majority of 6-3 to keep the policy rate at 3.75% for a sixth straight meeting. Once again, Megan Greene, Catherine L Mann and Huw Pill backed a 25bps hike."

"BoE noted “there has been little evidence so far of material second-round effects in price and wage-setting.” Indeed, easing UK wage growth and services inflation gave the BOE room to stand pat"

"However, Governor Andrew Bailey warned that “if the conflict in the Middle East persists for an extended period, as appears to be the case, and the risk of second-round effects emerging increases, it is likely that policy may have to tighten.”"

"The BoE also announced plans to slow the pace of quantitative tightening (QT) with a predictable multiyear plan. Its gilt holdings will fall by an average of £46bn a year, through 2034, including £20bn of annual sales. That’s down from an £87.5bn average reduction and £32bn of sales over the past four years. The slower QT runoff pace supports gilts, but elevated energy prices remain the bigger driver. Unless energy prices ease in a sustainable way, gilt yields will stay under upward pressure. "

"The swaps curve implies about 100bps of BoE rate hikes in the next twelve months to 4.75%. In our view, the BoE may not need to tighten as much as markets expect. The UK economy is already operating below capacity, Bank Rate at 3.75% is near the top of the BoE’s estimated 2% to 4% neutral range, and fiscal policy will likely turn more restrictive. Bottom line: GBP is vulnerable to a dovish BoE repricing."

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

MUFG’s Halpenny expects the BoJ to deliver a 25bps hike to 1.25%, with communications outlining further rate increases and supporting efforts to strengthen the Japanese Yen. However, he warns Governor Ueda may sound cautious versus aggressive market pricing for 90bps of hikes. Any disappointment could lift USD/JPY, although recent retracement suggests BoJ tightening is increasingly driving FX direction.

BoJ tightening and Ueda caution risk

"Early tomorrow, ahead of the London open, the BoJ will announce its monetary policy decision with market pricing signalling a near 100% expectations of a 25bp rate hike to 1.25%. We certainly expect the general message from the communications to signal a clear plan to raise rates further which will go some way to endorsing the OIS rate curve priced for further hikes. It would also be consistent with the BoJ aligning itself to the coordinated efforts between Japan and the US to strengthen the yen."

"That said, there is a notable risk that Governor Ueda’s comments could fall short of what markets are expecting given 90bps of hikes are priced over the next 12mths. Governor Ueda has history on being cautious when global uncertainties rise and with rising energy prices comes rising global yields and the risk of a global equity market downturn. He will certainly give little credence to the reports that the BoJ could need to consider a larger 50bp hike, which were triggered by a speech by uber-hawk Hajime Takata on 2nd September."

"The 2-year US-JP swap spread is already signalling upside risks to USD/JPY based on co-movement over the last twelve months. It’s well known that in recent years that spread is not a particularly reliable indicator of FX moves but the co-movement is a lot more resilient since December last year – until the sharp drop in USD/JPY earlier this month. The US-JP 2-yr spread is 30bps higher so any disappointment in Ueda matching market pricing could see USD/JPY bounce more notably higher."

"That said, the retracement in USD/JPY today is notable and suggests from an FX perspective the expected faster pace of BoJ tightening is becoming a more important influence on FX direction."

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

Nomura’s European Economics team, led by Josie Anderson, George Buckley and Andrzej Szczepaniak, expects the Swiss National Bank to keep its policy rate at 0.00% at the September 2026 meeting. They highlight stronger GDP growth, a recent rise in inflation and CHF depreciation, and see a possible shift back to standard FX intervention language, with no rate hikes projected before 2028 at the earliest.

SNB seen on hold as CHF softens

"We expect the SNB to leave its policy rate unchanged at 0.00% at its September meeting. Inflation has accelerated, driven higher by energy prices, but core inflation remains low."

"As EUR/CHF is near its highest level since early 2025, we think Swiss policymakers could feel it is unnecessary to signal an increased willingness to intervene. On the other hand, with the Iran war re-escalating, the SNB may still want to show that it is alert to possible upward pressures on CHF, and keep the June guidance for now."

"In the latest data, inflation surprised to the upside, rising to 0.8% y-o-y in August from 0.4% in July, the fastest rate since September 2024. Much of the rise was driven by higher energy prices, as core inflation remained low at 0.4% y-o-y. We are forecasting inflation in Q3 to be in line with the SNB’s forecast of 0.7% q-o-q and then accelerate to 1.0% q-o-q in Q4."

"The SNB is therefore likely to revise up its estimate of GDP growth for the year, as even no growth in H2 would lead to a 1.8% expansion for the year as a whole, above the SNB’s June expectation of “around 1%”."

"Overall, our central forecast is for the SNB’s policy rate to remain at 0.00% until at least the end of 2027. If inflation sustainably rises to 1% or higher (i.e. around the middle of the SNB’s inflation target of 0-2%), we believe policymakers may discuss the need to raise rates in 2028."

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