Forex News
- GBP/USD closed 0.53% higher, the best close in three months.
- UK core inflation held at 2.6% against a 2.5% consensus.
- Retail sales and August PMIs both forecast lower on Friday.
GBP/USD closed Wednesday 0.53% higher just above 1.3600, its best close in three months, and the United Kingdom inflation report that opened the session had almost nothing to do with it. Sterling spent the London morning up barely twenty pips on the day. The entire advance arrived after midday, when a Treasury notice in New York pulled the floor out from under the Dollar.
An energy cap is not a hike case
Annual Consumer Price Index (CPI) inflation rose to 2.9% in July from 2.6%, matching consensus and marking the first increase in the headline rate since March. Core held at 2.6% against a 2.5% forecast, the only line on the page that beat. Services inflation, the series the Bank of England (BoE) actually watches, slowed to 3.4% from 3.6%.
The composition kills the hawkish reading. The move came out of a 13.5% increase in the regulated household energy cap that took effect in July, with domestic gas prices up 14.7% on the month, against transport inflation falling to 3.6% from 5.7% on cheaper diesel and food easing to 1.3%. That is an administered price working through an index rather than domestic demand pushing on it, and a committee that already held 6-3 in July has been handed no new reason to move on September 17.
None of it was a surprise to the people setting the rate. The July projection already had inflation peaking near 3.2% in the final quarter of the year on exactly this energy passthrough, which means Wednesday's rise was forecast, absorbed and priced long before it printed. Tuesday's labour market report had gone the other way and pressured Sterling, so the pair arrived into Wednesday carrying a domestic negative and left it carrying a foreign positive.
The move was made in Washington
The Treasury said on Wednesday it would at least double the size of its liquidity support buyback operations in longer-dated bonds, taking each operation from 2 billion Dollars to at least 4 billion from September 9. Long yields fell hard, the thirty-year giving back close to ten basis points from a print above 5.33% the previous day, and the Dollar was sold against every major counterpart into the American afternoon.
Sterling was not among the leaders of that move. The Swiss Franc gained close to 1.8% against the Dollar on the session and the New Zealand Dollar roughly 1%, which is what a broad unwind looks like when the seller is indifferent to what it buys instead. A three-month high built on another country's fiscal housekeeping is a Dollar position wearing a Sterling label, and it cleared the moving average band near 1.3400 that capped this pair through June and July with no domestic catalyst in it anywhere.
The mechanism is worth naming because it decides how durable the level is. An issuer announcing that it will buy back more of its own long-dated paper reduces yields by supplying a bid rather than by improving the inflation outlook, and currency markets treat those two routes to the same yield very differently. Gold ran toward $4,500 an ounce on the same news, which is not the behaviour of a market that thinks American inflation risk just fell.
Every British number left this week is forecast lower
GfK consumer confidence for August lands Thursday at 23:01 GMT with a consensus of -18 against a -17 prior. Friday opens at 06:00 GMT with July retail sales, forecast at -0.5% on the month against a 1% prior, -0.5% excluding fuel from 1.1%, and 2.2% annually against 4.2%. The annual line roughly halving is the number that matters, because it converts one soft month into a direction.
The preliminary August S&P Global Purchasing Managers Index (PMI) series follows at 08:30 GMT, composite at 51.5 from 52.2, services 51.8 from 52.1 and manufacturing 51.5 from 51.9. Every domestic release left on the week is forecast beneath its prior, which leaves the Pound at its best level since May going into a calendar consensus already expects to disappoint. The Dollar leg is the only thing holding this trade together, and it is the only leg worth watching.
Pound Sterling levels
Resistance: The session high short of 1.3650 is the first barrier, then the early-May peak just above 1.3650, with 1.3700 the level that turns this into a trend break rather than a Dollar accident.
Support: The 1.3600 handle now has to hold as the floor of the breakout, then 1.3550, with the 50-day Exponential Moving Average (EMA) near 1.3450 and the 200-day near 1.3400 far beneath. Daily Stochastic Relative Strength Index (Stoch RSI) near 90 sits deep in overbought territory and argues for consolidation before any extension.
Bias: Bullish while 1.3550 holds, objectives the early-May peak just above 1.3650 then 1.3700, invalidation on a daily close back beneath 1.3550.
GBP/USD daily chart
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- NZD/USD climbs toward its highest since early June, holding north of the 0.5930 mark.
- A sharp drop in US Treasury yields after the Treasury's buyback plan has broadly weakened the US Dollar, lifting the Kiwi.
- The Reserve Bank of New Zealand's (RBNZ) hawkish lean adds support, with the July FOMC minutes read as backward-looking.
The New Zealand Dollar (NZD) rallies against the US Dollar (USD), pushing north of the 0.5930 mark. The move is driven by broad weakness in the Greenback rather than anything out of New Zealand.
The trigger was the United States (US) Treasury Department. It said it will at least double its buyback operations for longer-dated coupon securities in the 10-year to 20-year and 20-year to 30-year sectors, lifting each operation from $2 billion to at least $4 billion between September 9 and November 4. The plan aims to support liquidity and cap the recent climb in long-end yields. It worked quickly, with the US 10-year yield falling back toward 4.65% after trading above 4.70% earlier in the day.
The July Federal Open Market Committee (FOMC) minutes, released on Wednesday, did little to change the picture. The record showed policymakers still regard inflation as elevated and confirmed three officials voted for a hike, but traders treated it as backward-looking given the softer inflation and weak jobs data since the meeting. A September hold remains the base case, keeping the Dollar on the back foot.
Attention now turns to New Zealand's July trade balance on Thursday, though the bigger driver for NZD/USD remains the US side, with the path of yields and the Dollar setting the tone into the end of the week.
Short-term technical analysis:
On the 4-hour chart, NZD/USD trades at 0.5932. The pair retains a constructive near-term bias as it holds above both the 20-period Simple Moving Average (SMA) at 0.5896 and the 100-period SMA at 0.5868, suggesting underlying demand on dips. Momentum is firm, with the Relative Strength Index (RSI) hovering near 68, hinting at strong bullish pressure without yet crossing into extreme overbought territory.
On the topside, immediate resistance is seen at 0.5935, followed by a nearby cap at 0.5939; a sustained break above this cluster would open the way toward 0.5965. On the downside, initial support emerges at 0.5929, ahead of a secondary floor at 0.5922, with the 20-period SMA at 0.5896 and the 100-period SMA at 0.5868 reinforcing a broader bullish structure on any deeper pullback.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
- DXY closed 0.86% lower, the weakest close since mid-May.
- Long-end buyback operations at least doubled to 4 billion Dollars.
- Hawkish July minutes landed at 18:00 GMT and moved nothing.
The Dollar Index closed Wednesday 0.86% lower just beneath 98.80, its weakest close since mid-May, and it closed on the session low. The document that did the damage was not a central bank document. A Treasury notice on the government bond buyback programme, released in the middle of the London afternoon, took the currency apart against every major counterpart on the board and left the index almost a full point under its 200-day Exponential Moving Average (EMA).
The debt manager wrote the session
The Treasury said it would increase, by at least double, the size of its liquidity support buyback operations in longer-dated nominal coupons, taking each operation from 2 billion Dollars to at least 4 billion across the 10-to-20-year and 20-to-30-year sectors. The change runs from September 9 through November 4, with anything beyond that left to the November refunding. It arrived barely two weeks after the quarterly buyback schedule had been published, and it arrived in front of a 16 billion Dollar auction of 20-year paper.
Long yields did what an announced buyer makes them do. The thirty-year had printed above 5.33% on August 18, its highest since June 2007, and it gave back close to ten basis points inside the afternoon, with the ten-year easing toward 4.65%. Long yields falling on disinflation leave a currency roughly where they found it. Long yields falling because the issuer had to show up as a bidder are something else entirely, and the foreign exchange market priced the difference within minutes.
The selling was indiscriminate, which is the tell worth keeping. The Swiss Franc took close to 1.8% out of the Dollar on the session, the New Zealand Dollar roughly 1%, and the Mexican Peso ran to a two-year high. Gold climbed toward $4,500 an ounce with Silver alongside it. A currency losing ground to a funding currency, a high-yielder and a metal inside the same afternoon is not repricing a rate spread. It is repricing the issuer.
The minutes nobody traded
The record of the July 28-29 Federal Open Market Committee (FOMC) meeting arrived at 18:00 GMT and described a committee considerably more hawkish than its own vote tally. Several policymakers favoured an immediate increase against the three who actually dissented, many judged that tightening would probably become necessary if inflation failed to decline, and a few argued that moving early would spare the committee larger moves later.
The language matters more than the arithmetic here, because the account of the June meeting credited only a few participants with a hike case. The ladder has climbed a rung while the vote has not moved at all, and two regional presidents without a vote in July have since said they would have backed an increase. The hawkish bloc is wider than the vote count showed, and it is still widening.
For all of that, the currency market treated the release as a non-event. The index was already sitting at its lows when the document landed and it stayed there. Futures had already trimmed September increase odds to roughly a third from around two-thirds in the days after the meeting, and nothing in the record put them back. A committee that switched off forward guidance on purpose now competes for attention with a debt manager who has not.
The week's real tests come after the minutes
Thursday's American calendar opens at 12:30 GMT with initial jobless claims against a 210K consensus and a 209K prior, alongside the Philadelphia Fed manufacturing survey for August, where a consensus of 25 sits against a 41.4 prior. That is a forecast collapse of more than sixteen points in a regional survey, and a print anywhere near it will do more to September pricing than a three-week-old account of a meeting. A regional Fed president speaks at 15:10 GMT.
Friday brings the preliminary August S&P Global Purchasing Managers Index (PMI) series at 13:45 GMT, manufacturing at a 53.8 consensus from 53.9 and services at 54 from 54.6, with the composite prior at 54.5. Both are forecast to soften without breaking, which is the shape that keeps a September hold alive without arming a cut. Beyond that sits the Jackson Hole symposium at the end of the month, the next scheduled chance for the Federal Reserve to take the narrative back off the Treasury.
Dollar Index levels
Resistance: The 99.00 handle is the first line back, with the 200-day EMA near 99.75 above it and the 50-day EMA just above the 100.00 handle capping the recovery case. Nothing short of a reclaim of 99.75 repairs the daily structure.
Support: The session low in the 98.75 area is the immediate shelf, then 98.50 and the 98.00 handle, with the early-May base near 97.60 the only structural level beneath that. Daily Stochastic Relative Strength Index (Stoch RSI) near 16 is already inside oversold territory, which caps how far a first push can run before it pauses.
Bias: Bearish. Rallies into 99.00 and the 200-day EMA near 99.75 are for selling, objectives 98.50 then the 98.00 handle, invalidation on a daily close back above 99.75.
DXY daily chart
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact 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 when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
- XAG/USD surges over 5%, reclaiming the $66.50 range top.
- Bullish RSI points higher, keeping buyers in near-term control.
- Break above $67 exposes the 100-day SMA and $71.88.
Silver (XAG/USD) price reversed course on Wednesday and soared over 5% as US Treasury yields edged lower, following the US Treasury stepping in to cap long-end US bond yields, which had reached levels last seen in 2007. At the time of writing, the XAG/USD pair trades at $66.68 after bouncing off daily lows of $62.19.
XAG/USD Price Forecast: Technical Outlook
In the short term, the trend is upward, but it has entered a phase of consolidation between $62.00 and $66.50. If buyers reclaim the top of the range, this clears the path to challenge higher prices.
Momentum remains bullish, as indicated by the Relative Strength Index (RSI), with the index aiming higher toward overbought territory. Hence, Silver’s path of least resistance is upside.
XAG/USD's first resistance is the day's high at $66.74, ahead of $67.00. Above is the 100-day Simple Moving Average (SMA) at 68.57, followed by the 200-day SMA at $71.88
XAG/USD Price Chart – Daily
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.
- EUR/USD jumps as Treasury buyback plan drags US yields lower.
- Fed Minutes show policymakers ready to tighten if inflation stalls.
- ECB hike bets firm as Eurozone inflation edges higher.
The Euro (EUR) gains over 0.85% against the US Dollar (USD) during the North American session on Wednesday, even though the latest Federal Reserve (Fed) minutes had a hawkish tone, with some participants, along with the three dissenters, suggesting that raising rates could be necessary if the disinflation process stalls. The EUR/USD trades at 1.1673, near two-and-a-half-month highs.
EUR/USD climbs as lower US yields offset hawkish Fed minutes
The Federal Reserve unveiled its July meeting minutes, in which the dissenters acknowledged that inflation appears broad-based and supported a more “restrictive policy.” The minutes revealed that policymakers are worried about inflation, with many participants assessing “that policy tightening would likely be necessary if inflation did not decline.”
The FOMC minutes showed no discussion of easing policy. The new Fed Chair, Kevin Warsh, asked the Committee whether it would be better for the US central bank to host only six monetary policy meetings, which would allow two months of full data. Meanwhile, the 2026 schedule will remain unchanged.
The US Treasury buyback of long-end bonds suggests that the Treasury is worried about elevated yields. Sources cited by Bloomberg said, “The measures are essentially a method of yield curve control designed to suppress long-term rates that are deemed too elevated and at risk of derailing the economic expansion.”
The Eurozone Harmonized Index of Consumer Prices (HICP) in July rose to 2.9% from 2.8% in June, matching preliminary forecasts. Underlying inflation rose to 2.5%, up from 2.4% in June.
The data further cement the case for higher interest rates in Europe. The European Central Bank (ECB), led by Christine Lagarde, is expected to increase rates by 25 basis points at the September 10 meeting. The money market had priced in an 88% chance of a rate hike, according to Prime Terminal data.
Ahead, the US economic docket will feature Initial Jobless Claims, a speech by St. Louis Fed President Alberto Musalem and S&P Global Flash PMIs. In Europe, traders will eye Germany’s Producer Price Index (PPI), the Trade Balance and speeches by ECB members,
EUR/USD Price Forecast: Technical outlook
In the daily chart, EUR/USD trades at 1.1678. The pair holds a bullish near-term bias as price advances above the cluster of longer-term support defined by the triple simple moving average set around 1.1470 and the reclaimed trend-line break near 1.1459, suggesting underlying demand on dips. Momentum is stretched, with the 14-period Relative Strength Index at 72.8, placing the market in overbought territory and hinting that upside progress could slow despite the constructive trend backdrop.
On the topside, the next significant hurdle is the horizontal resistance line at 1.1849, which caps the immediate upside and would need to give way to extend the current rally. On the downside, initial support is seen at the 1.1678 area, followed by the former trend-line barrier at 1.1459 and the triple simple moving average cluster around 1.1470, where buyers are likely to re-emerge on a deeper corrective pullback.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the 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.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
Here is what you need to know on Thursday, August 20:
The US Dollar Index (DXY) sold off broadly on Wednesday, sinking below the 99.00s region and holding well under 100.00. The slide followed the United States (US) Treasury's plan to at least double the size of its liquidity support buyback operations for longer-dated coupon securities, effective September 9.
The July Federal Open Market Committee (FOMC) Minutes did little to arrest the decline. The record showed policymakers still regard inflation as elevated and confirmed three officials voted for a rate hike. But traders treated the document as backward-looking, given the softer inflation and weak jobs data released since the meeting.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.86% | -0.55% | -0.85% | -0.62% | -0.52% | -1.02% | -1.80% | |
| EUR | 0.86% | 0.30% | -0.02% | 0.25% | 0.34% | -0.17% | -0.95% | |
| GBP | 0.55% | -0.30% | -0.28% | -0.05% | 0.06% | -0.47% | -1.26% | |
| JPY | 0.85% | 0.02% | 0.28% | 0.24% | 0.32% | -0.16% | -0.98% | |
| CAD | 0.62% | -0.25% | 0.05% | -0.24% | 0.08% | -0.42% | -1.21% | |
| AUD | 0.52% | -0.34% | -0.06% | -0.32% | -0.08% | -0.51% | -1.28% | |
| NZD | 1.02% | 0.17% | 0.47% | 0.16% | 0.42% | 0.51% | -0.81% | |
| CHF | 1.80% | 0.95% | 1.26% | 0.98% | 1.21% | 1.28% | 0.81% |
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).
EUR/USD extended its advance beyond 1.1675, reaching its highest level since late May as the Dollar broadly retreated.
GBP/USD climbed past the 1.3600 mark to a three-month peak, with firm United Kingdom (UK) inflation adding to the pressure on the Greenback.
USD/JPY faded toward the 158.00 region as US yields fell and the Dollar lost ground.
AUD/USD pushed up toward the mid-0.7100s, holding its gains ahead of Thursday's Australian employment report.
Gold soared toward $4,500 per troy ounce with Silver also sharply higher, both lifted by tumbling yields.
West Texas Intermediate (WTI) Oil held steady near $84.00 per barrel.
The People's Bank of China (PBoC) announces its interest rate decision, with no change expected. The standout release is Australia's July employment report, where analysts look for a modest 15K rise in jobs and the Unemployment Rate to hold at 4.4%, a key input for the Reserve Bank of Australia (RBA). Germany publishes its Producer Price Index (PPI) for July, followed by the Bundesbank monthly report.
In the US session, the focus falls on the weekly Initial Jobless Claims and the Philadelphia Fed Manufacturing Survey for August, which is expected to cool sharply from the prior reading. The Fed's Alberto Musalem also speaks, offering a fresh read on the policy debate after the minutes.
Late in the day, the UK releases GfK Consumer Confidence for August before attention turns back to Japan's inflation figures and the Asian open.
- Silver (XAG/USD) jumps near $65.80, riding a broad precious-metals rally.
- The US Treasury's plan to double long-dated debt buybacks has knocked the US Dollar and long-end Treasury yields lower.
- July FOMC Minutes shows officials still see inflation as elevated.
Silver (XAG/USD) trades sharply higher on Wednesday, changing hands near $65.80. The metal is riding a broad rally across precious metals with Gold (XAU/USD) soaring toward $4,500.
The trigger was the United States (US) Department of the Treasury, which said it will increase, by at least double, the size of its liquidity support buyback operations for longer-dated coupon securities, effective September 9. The plan aims to rein in the recent surge in long-end yields, and it did just that.
The other set-piece of the session was the release of the July Federal Open Market Committee (FOMC) Minutes. The record showed policymakers still regard inflation as elevated, with the labor market stable and the economy expanding. It also confirmed the divergence at the meeting, where three officials, regional Fed Presidents Lorie Logan, Beth Hammack and Neel Kashkari, voted for a rate hike.
Even so, the Minutes did little to shift the mood. Traders treated them as backward-looking, since the debate they captured took place before softer July inflation data and a weak jobs report that showed a 23K fall in payrolls. Markets now price in only a 34% chance of a September rate hike, down from around 60% three weeks ago, with a hold the clear base case. That softer rate path keeps the backdrop friendly for metals.
Short-term technical analysis:
On the 4-hour chart, XAG/USD trades at $65.77, maintaining a bullish near-term bias as it holds above both the 20-period Simple Moving Average (SMA) at $64.84 and the 100-period SMA at $62.16. The configuration of these underlying averages suggests the uptrend remains supported, while the Relative Strength Index (RSI) near 58 stays in positive territory without reaching overbought conditions, hinting that bullish momentum is constructive but not stretched.
On the topside, immediate resistance appears at the horizontal barrier at $65.92, where a break would open the way for a continuation of the advance. On the downside, initial support is seen at $65.29, ahead of the 20-period SMA at $64.84, with deeper demand zones at $63.83 and $63.54, followed by the 100-period SMA near $62.16, which reinforces the broader bullish structure as long as it holds.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
- USD/CHF breaks below the 50-day SMA after Treasury buyback shock.
- RSI drop signals sellers are gaining near-term momentum.
- Break below 0.7975 exposes 0.7932 and 0.7900 next.
The USD/CHF pair tumbles nearly 2% on Wednesday as a US Treasury buyback announcement sends the Greenback into a tailspin, while US Treasury yields also dive. The pair trades at 0.7979 after reaching a high of 0.8128.
USD/CHF Price Forecast: Technical Outlook
From a technical perspective, USD/CHF is upward-biased after it bottomed at 0.7604 in late January 2026. Since then, the pair has rallied towards a yearly high above 0.8200, before the US Treasury unveiled its bond buyback. This pushed USD/CHF below key support levels, including the 50-day Simple Moving Average (SMA) at 0.8084, and towards the 100-day SMA at 0.7975.
In the short term, momentum shifted bearish as the Relative Strength Index (RSI) fell from around 51 to 36.48. This suggests that sellers are gaining steam.
For a bearish continuation, USD/CHF must clear the 100-day SMA, followed by the 200-day SMA, at 0.7932. On further weakness, the next stop is 0.7900.
On the flip side, buyers must reclaim the 0.8000 level before challenging the March 31 high of 0.8042. Above lies the 50-day SMA at 0.8084, followed by the August 13 high of 0.8147.
USD/CHF Price Chart – Daily
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.
- Gold climbs as long-end US yields edge lower.
- Fed Minutes show three dissenters backing more restrictive policy.
- The US Dollar slide supports bullion ahead of claims, Musalem and PMIs.
Gold (XAU/USD) rallies during Wednesday’s session after the US Federal Reserve (Fed) released the minutes of its July meeting, in which the US central bank held rates unchanged but not unanimously, with three members dissenting and calling for a rate hike. The XAU/USD pair trades at $4,482, up over 3.50% at the time of writing.
XAU/USD rallies as lower yields offset hawkish Fed Minutes
The minutes stated that the dissenters “remarked that price pressures appeared broad-based and judged that the FOMC should adopt a more restrictive policy.” The document showed that of "many" participants “assessed that policy tightening would likely be necessary if inflation did not decline.” The FOMC’s minutes revealed that there were no discussions for a rate cut
US Treasury buybacks are behind bullion’s advance as US Treasury yields continued to dive further during the session. The US 30-year yield, which hit its highest level since 2007 on Tuesday, drops by over eight basis points to 5.20%. At the same time, the yield of the US 10-year benchmark note is down almost five basis points, down to 4.660%.
Sources cited by Bloomberg said that “This administration needs a win and maybe that comes in the form of artificially trying to keep long Treasury rates contained.”
Worth noting that US bond yields have risen sharply since July, sponsored by high energy prices as the Middle East conflict continues, which has increased inflation expectations in the US. Also, the Federal Reserve (Fed) has held interest rates unchanged at its last five meetings, amid cooling prices.
The non-yielding metal is also boosted by the Dollar's decline. The US Dollar Index (DXY), which measures the performance of the buck’s value against a basket of six peers, is down 0.80% at 98.85.
Ahead, the economic docket will feature Initial Jobless Claims, a speech by St. Louis Fed President Alberto Musalem and S&P Global Flash PMIs.
XAU/USD technical outlook: Gold hovers near $4,500 as bulls target the 200-day SMA
Gold seems to be gaining traction as it approaches the 200-day Simple Moving Average (SMA) at $4,510, a move triggered by news of the US Treasury bond buyback. Bulls are gaining momentum, as depicted by the Relative Strength Index (RSI), which favors further upside, and are aiming higher.
If bulls want to test higher prices, they must end Wednesday’s session above $4,500. In that outcome, the 200-day SMA would be the next resistance area, followed by $4,700 and the May 12 daily high at $4,735, surrounded by a cluster of six candles.
On the flip side, a false breakout above $4,500 could trigger a drop back below $4,400, followed by a test of the weekly low at $4,324. The next stop would be the last week’s low at $4,311, seen as the last line of defense, before aiming towards the 50-day SMA at $4,158.
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.
The Federal Open Market Committee (FOMC) published the Minutes of the July meeting on Wednesday. "The information available at the time of the meeting indicated that inflation remained elevated. Labor market conditions remained stable, and real gross domestic product (GDP) continued to expand," the document reads.
The document also showed that, despite most participants supporting keeping interest rates unchanged, several favored a hike. Many participants judged higher rates would likely be necessary if inflation fails to decline, while a few opted out for an immediate hike, saying it could avoid the need for further increases later.
Fed officials noted that price increases over the past year were broad-based across services and goods, while the Fed Staff Economic Outlook showed the inflation outlook was similar to one prepared for the June meeting, but the economic outlook was a touch weaker.
Participants generally expected solid real GDP growth to continue in the near term and pointed to a few factors likely to support continued expansion, including ongoing AI-related investment and household spending. Participants acknowledged that, while the economy had demonstrated resilience to date, uncertainty surrounding the economic outlook remained elevated, partly due to the conflict in the Middle East.
Other than that, various participants noted that their overall assessments of the economy were little changed given the short interval between the June and July meetings. Chairman Kevin Warsh observed that six scheduled meetings per year, held roughly every two months, would allow more information to accumulate between meetings than under current practice and provide policymakers and the staff more time to consider strategic monetary policy issues. Still, no decision was made, and the 2026 schedule remains unchanged.
Market reaction
The US Dollar remains under selling pressure following the announcement, weighed by an early announcement from the United States (US) Treasury Department that it will increase the size of government debt repurchases by at least double. The US Dollar Index (DXY) trades around the 98.90 level after the FOMC Minutes.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.80% | -0.49% | -0.74% | -0.61% | -0.45% | -0.94% | -1.66% | |
| EUR | 0.80% | 0.30% | 0.04% | 0.21% | 0.34% | -0.17% | -0.87% | |
| GBP | 0.49% | -0.30% | -0.24% | -0.10% | 0.06% | -0.46% | -1.18% | |
| JPY | 0.74% | -0.04% | 0.24% | 0.16% | 0.29% | -0.21% | -0.93% | |
| CAD | 0.61% | -0.21% | 0.10% | -0.16% | 0.14% | -0.37% | -1.09% | |
| AUD | 0.45% | -0.34% | -0.06% | -0.29% | -0.14% | -0.49% | -1.20% | |
| NZD | 0.94% | 0.17% | 0.46% | 0.21% | 0.37% | 0.49% | -0.71% | |
| CHF | 1.66% | 0.87% | 1.18% | 0.93% | 1.09% | 1.20% | 0.71% |
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 as a preview of the FOMC Minutes of the July meeting at 17:15 GMT.
- The Fed Minutes are expected to reveal the extent of support for higher interest rates after three dissenting votes in July.
- Softer inflation and labor market data since the meeting support the case for keeping rates unchanged in September.
- Markets currently see a 34% chance of a September rate hike, down from around 60% three weeks ago.
The United States (US) Federal Reserve (Fed) will release the Minutes of the July Federal Open Market Committee (FOMC) meeting on Wednesday. The document should allow investors to assess the extent of the hawkish bias within the central bank after a meeting marked by three dissenting votes in favor of a rate hike.
The Fed left the Fed Funds rate unchanged in the 3.5%-3.75% range in July, as widely expected. However, three officials, regional Fed Presidents Lorie Logan, Beth Hammack and Neel Kashkari, voted for a 25-basis-point (bps) rate increase, highlighting growing divergences within the Committee.
The monetary policy statement was broadly unchanged from June and provided no explicit guidance about future decisions. This limited communication is consistent with Fed Chair Kevin Warsh's preference for reducing forward guidance and preserving greater flexibility from one meeting to the next.
The Minutes will therefore be closely scrutinized to determine whether the hawkish bias extended beyond the three dissenters. Signs that other officials considered a rate increase before ultimately voting for a hold could keep the possibility of monetary tightening in September alive.
Fed hawks face a changing economic picture
Attention will focus particularly on the arguments made in favor of higher interest rates. At the July meeting, economic activity continued to expand at a solid pace, supported by strong productivity and investment, while inflation remained above the Fed's 2% target.
The more hawkish officials may have argued that supply shocks and the boom in Artificial Intelligence-related investment risk sustaining inflationary pressures. The relative stability of the labor market also provided an argument for the central bank to prioritize returning inflation to its target.
However, the macroeconomic backdrop has changed significantly since the meeting. July Consumer Price Index (CPI) and Producer Price Index (PPI) data showed moderating inflationary pressures. At the same time, the latest employment report signaled a more pronounced deterioration in the labor market, with an unexpected decline of 23K jobs in July and significant downward revisions to previous months.
These data have strengthened the case for patience. Wells Fargo economists expect the Minutes to show that most Committee members remain willing to wait for further progress on inflation, while arguing that the bar for future rate hikes remains relatively low if price pressures fail to ease further.
This shift also explains why investors might attach less importance than usual to Wednesday's document. The Minutes reflect a debate that took place before the latest employment and inflation data were released and could therefore portray a more hawkish stance than the Fed's current position.
Markets could consequently turn their attention quickly to the Jackson Hole Economic Symposium, where Kevin Warsh is expected to speak later this month. The Fed will also receive another round of inflation and employment data before its September meeting, leaving the interest rate outlook largely dependent on incoming economic data.
When will FOMC Minutes be released and how could they affect the US Dollar?
The FOMC will release the Minutes of its July 28-29 policy meeting on Wednesday at 18:00 GMT.
Expectations of higher interest rates have declined significantly since the July meeting. According to the CME FedWatch tool, markets now see a 34% chance of a 25 bps rate hike in September, down from around 60% three weeks ago, while keeping rates unchanged has become the clear base case.
Against this backdrop, the key question for the US Dollar (USD) will be whether the three dissenting votes reflect a broader hawkish current within the Committee.
If the Minutes show that several officials who voted to keep rates unchanged nevertheless believed that further monetary tightening could soon become necessary, expectations of a September hike could rebound. Such a scenario could support US Treasury yields and the US Dollar.
Conversely, if the document shows that most FOMC members view the current level of interest rates as sufficiently restrictive and prefer to wait for more data before considering another hike, expectations of a September hold could strengthen and weigh on the US Dollar.
The market reaction could nevertheless remain limited. The Minutes are backward-looking, and data released since the meeting have already altered the economic landscape. Investors may therefore focus more closely on upcoming US economic releases and Kevin Warsh's comments at Jackson Hole to reassess the monetary policy outlook ahead of the September meeting.
In the four-hour chart, the US Dollar Index (DXY) trades at 99.46, maintaining a bearish near-term tone as it holds below the 100-period simple moving average (SMA) at 100.03 and the 200-period SMA at 100.51. The downward resistance trendline, now coming in around 99.89, reinforces the topside cap, while the Relative Strength Index (RSI) near 38 hints at lingering downside pressure rather than a decisive oversold rebound.
On the topside, initial resistance is seen at the trendline area around 99.89, ahead of the 100-period SMA at 100.03. Further up, a horizontal barrier around 100.35 stands before the longer-term 200-period SMA near 100.51. On the downside, the next significant support is the horizontal floor at 98.90, where buyers could attempt to slow the current decline if selling extends.
(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.
Economic Indicator
Nonfarm Payrolls
The Nonfarm Payrolls release presents the number of new jobs created in the US during the previous month in all non-agricultural businesses; it is released by the US Bureau of Labor Statistics (BLS). The monthly changes in payrolls can be extremely volatile. The number is also subject to strong reviews, which can also trigger volatility in the Forex board. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish, although previous months' reviews and the Unemployment Rate are as relevant as the headline figure. The market's reaction, therefore, depends on how the market assesses all the data contained in the BLS report as a whole.
Read more.Last release: Fri Aug 07, 2026 12:30
Frequency: Monthly
Actual: -23K
Consensus: 80K
Previous: 57K
Source: US Bureau of Labor Statistics
America’s monthly jobs report is considered the most important economic indicator for forex traders. Released on the first Friday following the reported month, the change in the number of positions is closely correlated with the overall performance of the economy and is monitored by policymakers. Full employment is one of the Federal Reserve’s mandates and it considers developments in the labor market when setting its policies, thus impacting currencies. Despite several leading indicators shaping estimates, Nonfarm Payrolls tend to surprise markets and trigger substantial volatility. Actual figures beating the consensus tend to be USD bullish.
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