Forex News
- EUR/GBP edges higher as the British Pound remains under pressure on UK fiscal concerns and a less hawkish BoE outlook.
- Technically, the cross remains trapped between the 50-day and 100-day SMAs, keeping the near-term bias broadly neutral.
- Momentum indicators show that neither buyers nor sellers are in clear control.
EUR/GBP edges higher on Tuesday as the British Pound (GBP) remains under pressure across the board, weighed by concerns over the UK’s deteriorating fiscal outlook and the Bank of England’s (BoE) reluctance to raise interest rates while several major central banks have moved toward tighter policy. The cross, however, remains confined to a narrow range, trapped between the 50-day and 100-day Simple Moving Averages (SMAs), keeping the technical bias broadly neutral. At the time of writing, EUR/GBP trades around 0.8580.
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.02% | 0.07% | -0.11% | 0.02% | 0.08% | -0.33% | -0.24% | |
| EUR | -0.02% | 0.04% | -0.11% | 0.05% | 0.06% | -0.35% | -0.26% | |
| GBP | -0.07% | -0.04% | -0.19% | -0.04% | 0.00% | -0.41% | -0.30% | |
| JPY | 0.11% | 0.11% | 0.19% | 0.14% | 0.20% | -0.22% | -0.10% | |
| CAD | -0.02% | -0.05% | 0.04% | -0.14% | 0.07% | -0.34% | -0.24% | |
| AUD | -0.08% | -0.06% | -0.00% | -0.20% | -0.07% | -0.41% | -0.31% | |
| NZD | 0.33% | 0.35% | 0.41% | 0.22% | 0.34% | 0.41% | 0.11% | |
| CHF | 0.24% | 0.26% | 0.30% | 0.10% | 0.24% | 0.31% | -0.11% |
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 British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
Pound stays heavy as tighter UK fiscal stance threatens dovish BoE repricing
Strategists at Brown Brothers Harriman note that the UK’s fiscal backdrop is turning more restrictive. They point out that “the UK government borrowed £18.3bn in August, up £2.9bn from August 2025 and £3.5 billion above the Office for Budget Responsibility forecast,” a dynamic that has sharply eroded fiscal space. BBH adds that “higher borrowing costs are estimated to have halved the government’s fiscal headroom to around £12bn,” leaving Chancellor John Healey under mounting pressure “to raise taxes and cut spending to deliver his promised ‘buffer against uncertainty’ in the October 28 Autumn Budget.”
In BBH’s view, the “bottom line” is that “a tighter UK fiscal squeeze suggests the BoE may not need to raise the policy rate as much as markets expect (100bps in the next twelve months to 4.75%).” As a result, they warn that “GBP is vulnerable to a dovish BoE repricing.”
Technical analysis
On the daily chart, EUR/GBP keeps a capped tone as it holds beneath the 100-day simple moving average (SMA) at 0.8593 and the 200-day SMA clustered with the 78.6% Fibonacci retracement at 0.8641. The pair is marginally above the 50-day SMA at 0.8559 and the 50.0% retracement at 0.8578, but these nearby supports have yet to trigger a decisive rebound.
The Relative Strength Index (14) around 53 hints at mildly positive momentum, while the Moving Average Convergence Divergence (MACD) is fractionally below zero with a flat profile, and a low Average Directional Index (ADX) near 14 together suggest a weak, directionless market still biased lower while price remains under the key medium-term averages.
On the topside, initial resistance comes at the 100-day SMA around 0.8593, followed by the 61.8% Fibonacci retracement at 0.8604, before a more significant barrier emerges at the dense 0.8641 zone where the 200-day SMA and 78.6% retracement converge; beyond that, the cycle high at the 100.0% level of 0.8689 marks a broader upside cap.
On the downside, immediate support is seen just under the market at the 50.0% retracement near 0.8578, with the 50-day SMA at 0.8559 and the 38.2% retracement at 0.8551 forming a secondary demand band; a deeper slide would expose the 23.6% level at 0.8519 and the structural anchor around 0.8466.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
BoE FAQs
The Bank of England (BoE) decides monetary policy for the United Kingdom. Its primary goal is to achieve ‘price stability’, or a steady inflation rate of 2%. Its tool for achieving this is via the adjustment of base lending rates. The BoE sets the rate at which it lends to commercial banks and banks lend to each other, determining the level of interest rates in the economy overall. This also impacts the value of the Pound Sterling (GBP).
When inflation is above the Bank of England’s target it responds by raising interest rates, making it more expensive for people and businesses to access credit. This is positive for the Pound Sterling because higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls below target, it is a sign economic growth is slowing, and the BoE will consider lowering interest rates to cheapen credit in the hope businesses will borrow to invest in growth-generating projects – a negative for the Pound Sterling.
In extreme situations, the Bank of England can enact a policy called Quantitative Easing (QE). QE is the process by which the BoE substantially increases the flow of credit in a stuck financial system. QE is a last resort policy when lowering interest rates will not achieve the necessary result. The process of QE involves the BoE printing money to buy assets – usually government or AAA-rated corporate bonds – from banks and other financial institutions. QE usually results in a weaker Pound Sterling.
Quantitative tightening (QT) is the reverse of QE, enacted when the economy is strengthening and inflation starts rising. Whilst in QE the Bank of England (BoE) purchases government and corporate bonds from financial institutions to encourage them to lend; in QT, the BoE stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive for the Pound Sterling.
- USD/CHF extends its decline below 0.8200 nearly 1% below last week's highs.
- Hopes of fresh US-Iran negotiations have pushed Oil prices to two-week lows, boosting risk appetite.
- The SNB announced on Tuesday that they are ready to intervene in FX markets "if the need should arise."
The Swiss Franc (CHF) extended its recovery against the US Dollar (USD) on Tuesday, favoured by lower Oil prices amid hopes of a new round of US-Iran negotiations, which has prompted the Swiss National Bank (SNB) to launch an intervention warning. The USD/CHF pair has declined below 0.8200 during the European session, hitting session lows, nearly 1% below last week’s highs near 0.8270.
A higher appetite for risk is weighing on the safe-haven US Dollar on Tuesday, following news that Iran has proposed a plan to reopen the Strait of Hormuz within seven days after the US lifts its blockade on Iran’s ports, as reported by Kyodo News citing a senior Iranian government official.
This news has put additional pressure on Oil prices, pushing Brent Oil to its lowest levels in more than two weeks, at $94.20 earlier in the day, more than 10% below last week’s highs.
SNB launches an intervention threat
Against this background, the SNB warned on Tuesday that “the Middle East Conflict means that we remain prepared to intervene in the foreign market should the need arise.” The bank has not given further detail, but this move would be aimed at stemming a fast CHF appreciation, which would undermine its efforts to lift inflation.
The Swiss central bank meets on Thursday, and is widely expected to leave its benchmark interest rate at the current 0% level. SNB president Martin Schlegel observed earlier this month that inflationary pressures have increased somewhat recently, but that price pressures remain within the stability range, which practically dicar¡ds any monetary tightening, at least until well into 2027.
The US Dollar is witnessing a moderate weakness on Tuesday. The USD Index (DXY), which measures the value of the Greenback against a basket of six majors, has pulled back from nearly two-month highs at 100.67 but remains above the key 100.00 level so far.
Hopes that the meeting between US President Donald Trump and Iran's President Masoud Pezeshkian at the UN summit night will lead to a fresh round of peace talks have boosted risk appetite, encouraging investors to trim US Dollar longs and bet on riskier-considered assets. That said, the hawkish repricing of the Federal Reserve's (Fed) near-term monetary policy is keeping US Dollar downside limited so far.
SNB FAQs
The Swiss National Bank (SNB) is the country’s central bank. As an independent central bank, its mandate is to ensure price stability in the medium and long term. To ensure price stability, the SNB aims to maintain appropriate monetary conditions, which are determined by the interest rate level and exchange rates. For the SNB, price stability means a rise in the Swiss Consumer Price Index (CPI) of less than 2% per year.
The Swiss National Bank (SNB) Governing Board decides the appropriate level of its policy rate according to its price stability objective. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame excessive 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.
Yes. The Swiss National Bank (SNB) has regularly intervened in the foreign exchange market in order to avoid the Swiss Franc (CHF) appreciating too much against other currencies. A strong CHF hurts the competitiveness of the country’s powerful export sector. Between 2011 and 2015, the SNB implemented a peg to the Euro to limit the CHF advance against it. The bank intervenes in the market using its hefty foreign exchange reserves, usually by buying foreign currencies such as the US Dollar or the Euro. During episodes of high inflation, particularly due to energy, the SNB refrains from intervening markets as a strong CHF makes energy imports cheaper, cushioning the price shock for Swiss households and businesses.
The SNB meets once a quarter – in March, June, September and December – to conduct its monetary policy assessment. Each of these assessments results in a monetary policy decision and the publication of a medium-term inflation forecast.
OCBC strategists Sim Moh Siong and Christopher Wong highlight that the US Dollar (USD) stayed resilient despite improved risk appetite, supported by hawkish Federal Reserve (Fed) commentary that limited the drop in US front-end yields. They remain comfortable with a modestly stronger USD outlook through year-end, citing ongoing Fed tightening risks and continued challenges for European currencies, even as equities rally on tech strength and easing geopolitical concerns.
Fed hawkishness underpins resilient Dollar
"The USD traded mixed rather than weaker despite fading safe-haven demand. Risk sentiment improved on the back of a tech-led rally, optimism around US-China talks, and lower oil prices as hopes for US-Iran diplomacy and improving traffic through the Strait of Hormuz eased supply concerns."
"Falling energy prices helped reduce near-term inflation worries and pushed global yields lower overnight. However, while European yields declined across the curve, hawkish Fedspeak limited the drop in frontend US yields and provided support for the USD."
"Chicago Fed President Goolsbee argued that persistent supply shocks can no longer be simply looked through, while St. Louis Fed President Musalem suggested further policy tightening may still be necessary. Attention now turns to New York Fed President Williams. As a key voice among Fed doves, his comments will be closely watched, particularly after he joined last week's rate hike decision."
"We remain comfortable with a modestly stronger USD outlook through year-end given ongoing hawkish Fed risks. However, a more meaningful USD rally would likely require clearer evidence of demand-driven inflation rather than inflation stemming primarily from supply-side pressures."
"Our constructive USD view also reflects continued challenges for the euro. European currencies remain weighed down by fiscal concerns, particularly in France, elevated energy costs, and limited exposure to AI-driven investment. At the same time, the CNY continues its gradual appreciation against the USD, while prospects for the JPY could improve if Japan's policy backdrop becomes more supportive."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- The Indian Rupee trades sharply higher against the US Dollar due to a significant decline in oil prices.
- Investors keenly await meetings between global leaders at the United Nations General Assembly.
- The US Dollar outperformed on strong hawkish Fed expectations.
The Indian Rupee (INR) rises significantly against the US Dollar (USD) on Tuesday. The USD/INR pair declines to near 95.60 as oil prices fall sharply after remarks from a senior Iranian official that Iran is willing to open the Strait of Hormuz – a vital passage to almost 20% of global energy supply –within seven days if the United States (US) takes initial steps toward easing military pressure, Kyodo News reported.
Iran shared Hormuz reopening proposal on September 16
The report from Kyodo News showed a senior Iranian official said, "Iran's proposal was delivered to the US via mediators on September 16." The same added, "Details of an agreement to end hostilities with us can be discussed in New York via mediators."
This development came ahead of a meeting between leaders from the US and Gulf nations on the sidelines of the United Nations (UN) General Assembly, where they are expected to discuss ways to boost the energy supply through the Middle East.
US President Donald Trump is also expected to meet Iranian President Masoud Pezeshkian to talk about ongoing conflicts.
The development has resulted in a sharp decline in oil prices. As of writing, the MCX Crude Oil contract expiring on October 19 is down over 2% to near Rs. 8,652 after giving back its earlier gains.
Lower oil prices bode well for currencies from economies such as India, which rely heavily on oil imports to meet their energy needs.
Additionally, a report from Reuters showing that Saudi Arabia has restarted operations at its East-West Pipeline and could resume exports from the Red Sea port of Yanbu later on Tuesday has also weighed on oil prices.
Firm hawkish Fed expectations need to be validated by US data
A string of market experts has explicitly said that the recent strength in the US Dollar is backed by Federal Reserve’s (Fed) interest rate hike expectations. Last week, the Fed raised interest rates by 25 basis points (bps) to 3.75%-4.00% and signaled at least one more hike within this year.
Experts believe that firm hawkish Fed expectations need validation by upcoming US economic data.
Analysts at HSBC note that the USD “strengthened following the decision.” They highlight that “the median 2026 ‘dot’ implies one additional hike before year-end,” with “a significant minority of participants still anticipating a further rate rise in 2027.” HSBC argues that “this path is more hawkish than a ‘one-and-done’ outcome but remains below current market pricing,” meaning they “do not expect a major repricing of rate expectations or the USD.” Instead, the bank expects that “the market’s attention is likely to focus on whether incoming data validate the final projected increase this year,” suggesting any further US Dollar gains will hinge on how the data track against the Fed’s projected path.
USD/INR Technical Analysis
On the daily chart, USD/INR trades at 95.60, holding a mildly bullish near-term bias as spot remains above the 20-day Exponential Moving Average (EMA) at 95.51. The pair has reclaimed short-term trend support after last week’s dip toward the mid-94s, and price action now consolidates just above the EMA, suggesting underlying demand rather than aggressive buying.
The Relative Strength Index (RSI) at 52 sits slightly above the neutral 50 line, hinting at modest positive momentum without stretching into overbought territory.
On the downside, immediate support is defined by the 20-day EMA at 95.51, followed by 95.00. Looking up, the last week's high near 96.00 is the key hurdle for the pair.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Indian Rupee FAQs
The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee.
The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference.
Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee.
Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.
Societe Generale analysts describe EUR/HUF as consolidating above the 360 area after an interim low near 348 in June. The pair is capped by the 200-day moving average at 370/371, with a breakout above this zone needed to confirm a larger up-move. A break below the recent 359 pivot low would raise the risk of a deeper decline in the cross.
Key levels define next HUF move
"EUR/HUF carved out an interim low near 348 in June. A rebound has since materialized; however, the pair has so far struggled to overcome the 200-DMA at 370/371."
"A breakout above this zone will be crucial to confirm the onset of a larger up move. The recent pivot low at 359 is an important support. In case this gives way, there could be a risk of a deeper decline."
"In CEEMEA, we expect the MNB to leave the policy rate unchanged at 5.50% today following three 25bp cuts. Higher energy prices, the stronger dollar, Fed and ECB tightening have turned the screw on financial conditions and diminished the room for manoeuvre in Hungary."
"The more important development could be a potential reduction in the inflation target from 3.0% to 2.5%, underlining Hungary's longer-term commitment to Eurozone convergence."
"Our base case is for policy easing to resume in December and continue gradually through 2027, lowering the policy rate to 4.50% next year. EUR/HUF is consolidating above the 360 area."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note that USD/JPY remains supported after testing the 157.30 area, with short-term price action expected to stay within a 156.90–157.80 range. Looking ahead 1–3 weeks, they see room for further USD strength, but highlight that overbought conditions could limit gains near the 158.40 resistance level. The bullish outlook remains intact as long as USD holds above the key support level at 156.20.
Dollar strength tempered by key resistance
"24-HOUR VIEW: Yesterday, USD rose to a high of 157.52 before closing at 157.36 (+0.32%). Despite the advance, there has been no significant increase in upward momentum. However, there is a chance for USD to rise further today, even though any advance is likely to stay within a 156.90/157.80 range."
"1-3 WEEKS VIEW: In our most recent narrative from last Thursday (17 Sep, spot at 156.05), we highlighted that “upward momentum is building, but it is not that strong,” and USD “could edge higher to 157.30.” USD soared to a high of 158.05. Further USD strength seems likely, but given the overbought conditions, any advance is expected to face firm resistance at 158.40. To keep the momentum going, USD must hold above the ‘strong support’ level at 156.20."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- Japanese Yen bounces back against the US Dollar as oil prices correct sharply.
- Iran says that the Hormuz could reopen within seven days if the US takes initiative to ease military pressure.
- The BoJ is expected to deliver more interest rate hikes this year.
The Japanese Yen (JPY) claws back its early losses and turns slightly positive against the US Dollar (USD) during the European trading session on Thursday, with the USD/JPY pair dropping 0.2% to near 157.00.
The Japanese currency bounces back as oil prices correct sharply on hopes of diplomacy between the United States (US) and Iran. During the day, a senior Iranian Official said, “Iran's proposal was delivered to the US via mediators on September 16, Kyodo News. The proposal says that Iran could reopen the Strait of Hormuz, a critical chokepoint to almost 20% of global energy supply, within seven days if the United States (US) takes initial steps toward easing military pressure.
Additionally, the hopes of an improvement in the energy supply through the Middle East have also weakened oil prices. Saudi Arabia is preparing to resume crude oil exports from the Red Sea port of Yanbu as early as Tuesday, and will also restart the East-West oil pipeline.
Lower oil prices bode well for currencies from economies, such as Japan, which rely heavily on oil imports to meet their energy needs.
On the monetary policy front, the Bank of Japan (BoJ) is expected to deliver more interest rate hikes this year. The Japanese central bank has already raised policy rates twice this year.
Analysts at MUFG argue that the BoJ’s latest policy move marks the start of a “new phase” for monetary policy, one they see as “consistent with a rate hike every three months.” They note that this more regular tightening rhythm is emerging even as external factors such as higher US yields and elevated energy prices continue to exert downward pressure on the Yen.
Meanwhile, the sharp fall in oil prices has weighed on the US Dollar, diminishing its safe-haven appeal. The US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, retreats from the 52-day high of 100.67 posted earlier in the day.
USD/JPY Technical Analysis
In the daily chart, USD/JPY trades at 156.96. The pair holds above the 20-period exponential moving average (EMA) at 156.63, suggesting a tentative bullish near-term bias as price stabilizes after the recent slide from the 160.00 region. The Relative Strength Index (RSI) at 49.57 sits near the neutral line, hinting at balanced momentum and leaving room for either an extension higher or further consolidation around current levels.
On the downside, immediate support is seen at the 20-day EMA at 156.63, with the current session’s low near 156.96 acting as a pivot zone for intraday participants. A sustained bounce from this area would keep the constructive tone in place, while a decisive break below the EMA would expose deeper retracement toward prior lows on the chart.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator
BoJ Interest Rate Decision
The Bank of Japan (BoJ) announces its interest rate decision after each of the Bank’s eight scheduled annual meetings. Generally, if the BoJ is hawkish about the inflationary outlook of the economy and raises interest rates it is bullish for the Japanese Yen (JPY). Likewise, if the BoJ has a dovish view on the Japanese economy and keeps interest rates unchanged, or cuts them, it is usually bearish for JPY.
Read more.Last release: Fri Sep 18, 2026 02:54
Frequency: Irregular
Actual: 1.25%
Consensus: 1.25%
Previous: 1%
Source: Bank of Japan
- USD/CAD pulls back from 1.4050, but is lacking follow-through below 1.4030.
- Risk appetite amid Hormuz reopening hopes weighs on the USD, but the Oil fall is acting as a headwind for Loonie's rallies.
- The technical picture remains little changed with USD's bullish structure intact.
The Canadian Dollar (CAD) trades practically flat against the US Dollar (USD) on Tuesday as the risk appetite triggered by Tehran’s proposal to reopen the Strait of Hormuz has offset the decline in Crude prices. The USD/CAD pair is changing hands at 1.4035 at the time of writing, as the reversal from one-and-a-half-month highs, at 1.4050, struggles to find acceptance below 1.4030.
Iran has offered to reopen the Strait of Hormuz, a waterway that carried about 20% of the world’s global Oil supply before the conflict, in a period of seven days after the US lifts its blockade on Iran’s ports, according to a report by Kyodo News released earlier on Tuesday, citing a senior Iranian government official.
This news comes after US President Donald Trump affirmed that he is willing to meet Iranian President Masoud Pezeshkian at the UN General Assembly, which will start in New York on Tuesday.
The report has triggered fresh hopes of a negotiated end to the conflict, which is about to enter its seventh month, and has brought government debt surging across the world and the global economy to the brink of recession.
Technical Analysis: US Dollar's bullish trend remains intact
USD/CAD maintains its near-term constructive structure in place, with recent price action highlighting a potential Gartley pattern, aiming for the 1.4100 area or higher. Momentum indicators in the daily chart reinforce this view, as the Relative Strength Index (14) is high but below overbought territory, and the Moving Average Convergence Divergence (MACD) stands in positive territory, printing wide green bars in the histogram.
Immediate resistance is at the intra-day high of 1.4050, which is coincident with the 61.8% Fibonacci retracement of the June-August decline. Further up, the area between the August 5 high at 1.4080 and the 78.6% Fibonacci retracement, at 1.4135, looks like a plausible target for the current rally.
On the downside, initial support is seen at previous tops around 1.4000 (September 16, 17 and 18 highs) ahead of the September 2 high, at 1.3930.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Canadian Dollar Price Today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.02% | -0.01% | -0.25% | 0.00% | 0.04% | -0.45% | -0.33% | |
| EUR | 0.02% | 0.00% | -0.23% | 0.03% | 0.06% | -0.41% | -0.30% | |
| GBP | 0.00% | -0.01% | -0.27% | 0.00% | 0.06% | -0.41% | -0.31% | |
| JPY | 0.25% | 0.23% | 0.27% | 0.26% | 0.30% | -0.18% | -0.04% | |
| CAD | -0.00% | -0.03% | 0.00% | -0.26% | 0.04% | -0.42% | -0.30% | |
| AUD | -0.04% | -0.06% | -0.06% | -0.30% | -0.04% | -0.47% | -0.33% | |
| NZD | 0.45% | 0.41% | 0.41% | 0.18% | 0.42% | 0.47% | 0.13% | |
| CHF | 0.33% | 0.30% | 0.31% | 0.04% | 0.30% | 0.33% | -0.13% |
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 Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).
Commerzbank’s Volkmar Baur expects the South African Reserve Bank (SARB) to deliver a 25 basis point rate hike after surprising markets by holding rates in July. With growth cooling, inflation pressures persisting and fuel and food risks elevated, he argues SARB should not only raise rates but also sound hawkish, as a softer stance could weigh on the Rand.
Rate hike likely as inflation risks persist
"When the South African Reserve Bank last met for a monetary policy meeting on July 23, the market and most analysts firmly expected an interest rate hike. And for tomorrow, Wednesday, most analysts are again anticipating a 25-basis-point rate hike, which the market has already fully priced in."
"The signs are similar, but the circumstances are quite different. And the outcome is likely to be different as well. In July, the SARB left the key interest rate unchanged, contrary to expectations. On Wednesday, however, it is likely to raise rates."
"When the SARB met in late July, the Iran conflict had just flared up again. The hope at the time was that this episode, too, would pass quickly and that oil prices would fall again soon. Unfortunately, that has not been the case in recent months. Consequently, the SARB finds itself in a more difficult position this week."
"Growth has recently cooled more than expected due to the ongoing conflict, while inflationary pressures persist. Although the August inflation figures will not be released until Wednesday, the annual rate is likely to rise further."
"Gas prices alone are expected to account for about 0.8 percentage points of the annual rate, a figure that is likely to increase further in September depending on oil prices. A look at the core rate (expected to be 4.2%) shows, however, that it, too, remains too high. The central bank’s target is 3%, with a tolerance band of one percentage point above and below that level."
"Following its last meeting, the central bank stated that one risk scenario is that the oil price could rise above USD 100 per barrel again, which would require a response in the form of another interest rate hike. We would say that the SARB would likely be well advised not only to raise interest rates on Wednesday but also to adopt a hawkish tone. Otherwise, the ZAR could suffer again."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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