Forex News
Societe Generale strategists note USD/INR remains below 95 in Asia after a 1.9% rally last week, supported by Reserve Bank of India (RBI) measures for Oil importers and speculation curbs. They highlight reported US Dollar (USD) selling by state-run banks and warns RBI’s direct supply to Oil companies could be constrained. FX reserves have dropped sharply and Indian Rupee (INR) shorts in the Reuters poll are at multi‑month highs.
RBI tools, reserves and positioning
"The INR stays below 95 in Asia, after rallying nearly 1.9% last week thanks to the RBI measures (window for oil importers and curbs on speculation)."
"State-run banks were reportedly selling small amounts of dollar to nudge the pair below 95.0."
"Traders believe the RBI may turn more conscious of intervention size going forward as direct supply to oil companies could exhaust about $400m per day."
"FX reserves have come down by around $60bn in the last five weeks from the peak of $785.7bn."
"In the latest Asia bi-weekly Reuters FX poll, INR short positions rose to the highest level since early June."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Brown Brothers Harriman’s Elias Haddad expects UK September Consumer Price Index (CPI) and August labour data to be pivotal for Bank of England (BoE) pricing, with markets already discounting a 25 bps hike to 4.00% in November and 100 bps over twelve months. Haddad argues the BoE may not need to tighten as much, citing spare capacity, near-neutral rates, and likely fiscal tightening, which weighs on the British Pound (GBP).
UK inflation and wages in focus
"UK September CPI (Wednesday). Headline CPI is expected at 3.4% y/y (BoE projection: 3.0%) vs. 3.1% in August, core CPI is seen at 2.8% y/y vs. 2.6% in August, and services CPI is projected at 3.6% (BoE projection: 3.6%) vs. 3.4% in August."
"Ahead of that, the UK August labor market data is due Tuesday. The policy-relevant private sector regular pay growth is seen at 3.0% y/y vs. 2.9% in July, matching the BoE’s Q3 forecast and supporting Governor Andrew Bailey’s comments last week that there is little evidence yet of inflation becoming embedded in wage-setting."
"The swaps curve price in 90% odds of a 25bps hike to 4.00% on November 5 and 100bps of tightening in the next twelve months. In our view, the BoE may not need to tighten as much as markets anticipate, which is a drag on GBP. The UK economy is operating below capacity, the policy rate is near the top of the BoE’s estimated 2% to 4% neutral range, and fiscal policy will likely turn more restrictive following the October 28 UK budget."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Canada’s inflation picked up pace in September, with the headline Consumer Price Index (CPI) rising 3.1% from a year earlier, missing market expectations and up from the 3.0% increase recorded in August. On a monthly basis, prices rose by 0.1%.
Meanwhile, the Bank of Canada’s (BoC) core measure, which excludes more volatile components such as food and energy, rose 2.2% over the past year and increased by 0.1% compared with the previous month.
Looking at the BoC’s underlying key inflation gauges, Common CPI came in at 2.4% (from 2.6%), Trimmed CPI at 1.8% (from 1.9%), and Median CPI at 1.9% (from 2.0%). Together, they show an apparent impasse in price pressures in the last month.
According to the press release, "The Consumer Price Index (CPI) rose 3.1% year over year in September, following a 3.0% increase in August. The acceleration was led by higher prices for gasoline in September (+27.8%) compared with August (+22.8%). Excluding gasoline, the CPI rose 2.2%, after increasing 2.4% in August… Moderating the acceleration in the all-items CPI in September were smaller year-over-year price increases for travel tours and groceries compared with the previous month.”
Market reaction
The Canadian Dollar (CAD) builds on recent gains and motivates USD/CAD to hit fresh four-week lows below the 1.4100 yardstick on Monday, further extending last week’s leg lower.
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 Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.23% | 0.08% | 0.21% | -0.26% | -0.49% | -0.24% | 0.22% | |
| EUR | -0.23% | -0.16% | 0.02% | -0.48% | -0.73% | -0.47% | -0.01% | |
| GBP | -0.08% | 0.16% | 0.15% | -0.34% | -0.59% | -0.35% | 0.15% | |
| JPY | -0.21% | -0.02% | -0.15% | -0.44% | -0.78% | -0.43% | 0.04% | |
| CAD | 0.26% | 0.48% | 0.34% | 0.44% | -0.22% | 0.02% | 0.49% | |
| AUD | 0.49% | 0.73% | 0.59% | 0.78% | 0.22% | 0.26% | 0.74% | |
| NZD | 0.24% | 0.47% | 0.35% | 0.43% | -0.02% | -0.26% | 0.47% | |
| CHF | -0.22% | 0.00% | -0.15% | -0.04% | -0.49% | -0.74% | -0.47% |
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).
This section below was published as a preview of the Canadian inflation report at 12:00 GMT.
- Canadian inflation is expected to rise in September.
- The underlying inflation gauges are also expected to gather some steam.
- The Canadian Dollar has been trading in a choppy fashion vs. the US Dollar.
Canada’s September Consumer Price Index (CPI) figures will be the focus of attention on Monday. Indeed, Statistics Canada data will provide markets with an update on price pressures ahead of the Bank of Canada’s (BoC) October 28 gathering, when officials are expected to keep the interest rate steady at 2.25%, broadly in line with analyst consensus.
This time, economists expect the headline CPI to pick some upside traction at 3.2% YoY and to rise by 0.2% on a monthly basis, up from the 0.1% contraction recorded in August. The BoC’s core measure (which strips food and energy costs) is forecast to rise by 0.2% inter-month, while remaining steady at 2.4% from a year earlier.
In the current context of heightened geopolitical volatility, crude Oil dynamics are likely to keep inflationary pressures anything but abated, while the lack of progress on the tariffs front is expected to also add to the sentiment.
Still around data, the BoC’s preferred gauges of underlying inflation, CPI-Common, Trimmed Mean, and Median, cooled somewhat in August to 2.6%, 1.9%, and 2%, respectively.
What can we expect from Canada’s inflation rate?
Inflation remained steady in August, although market participants mostly pencil in a pick-up in inflationary pressure due to the persistent tensions in the Middle East and the accompanying uptrend in crude Oil prices.
The BoC delivered a cautiously hawkish hold on September 2, leaving rates unchanged as economic slack and lingering trade uncertainty continue to argue for patience. Still, policymakers appear increasingly uneasy about the inflation outlook. Governor Tiff Macklem’s warning that several rate hikes could be needed suggests renewed tightening is firmly back on the table, particularly if Oil prices remain elevated or inflationary pressures begin to spread beyond energy.
So far, market participants expect nearly 23 basis points of tightening by year-end, which is roughly a quarter percentage point.
When is the Canada CPI data due, and how could it affect USD/CAD?
Markets will fully focus on Monday at 12:30 GMT, when Statistics Canada publishes September’s inflation prints. If inflation falls in line with the latest results from its US peer, bets on further rate hikes should likely increase, providing fresh legs for the Canadian Dollar (CAD).
Pablo Piovano, Senior Analyst at FXStreet, notes that USD/CAD has been navigating a downward path since hitting yearly tops near the 1.4300 yardstick earlier in the month.
Piovano points out that the pair remains well above its critical 200-day SMA in the 1.3880 zone, suggesting that further gains are possible in the near term.
If bulls regain control, the next key level is expected at the 2026 top at 1.4299 (October 9 and 14), before the March 2025 peak at 1.4542 (March 4). Further up emerges the 2025 ceiling at 1.4792 (February 3), Piovano adds.
“On the opposite direction, the resurgence of the bearish trend could prompt the pair to revisit its provisional support levels at the 100-day and 55-day SMAs at 1.4035 and 1.4000, respectively. South from here awaits the critical 200-day SMA," he adds.
“Momentum keeps favouring further gains,” he notes, signalling that the Relative Strength Index (RSI) hovers around the 54 level, while the Average Directional Index (ADX) beyond 37 suggests a solid trend.
Bank of Canada FAQs
The Bank of Canada (BoC), based in Ottawa, is the institution that sets interest rates and manages monetary policy for Canada. It does so at eight scheduled meetings a year and ad hoc emergency meetings that are held as required. The BoC primary mandate is to maintain price stability, which means keeping inflation at between 1-3%. Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Canadian Dollar (CAD) and vice versa. Other tools used include quantitative easing and tightening.
In extreme situations, the Bank of Canada can enact a policy tool called Quantitative Easing. QE is the process by which the BoC prints Canadian Dollars for the purpose of buying assets – usually government or corporate bonds – from financial institutions. QE usually results in a weaker CAD. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The Bank of Canada used the measure during the Great Financial Crisis of 2009-11 when credit froze after banks lost faith in each other’s ability to repay debts.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the Bank of Canada purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the BoC stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Canadian Dollar.
Economic Indicator
Consumer Price Index (YoY)
The Consumer Price Index (CPI), released by Statistics Canada on a monthly basis, represents changes in prices for Canadian consumers by comparing the cost of a fixed basket of goods and services. The YoY reading compares prices in the reference month to the same month a year earlier. Generally, a high reading is seen as bullish for the Canadian Dollar (CAD), while a low reading is seen as bearish.
Read more.Next release: Mon Oct 19, 2026 12:30
Frequency: Monthly
Consensus: -
Previous: 3%
Source: Statistics Canada
- Silver holds modest gains as the US Dollar and Treasury yields stabilise following last week's decline.
- The technical outlook remains bearish as XAG/USD trades within a descending channel below key daily SMAs.
- The $55 level provides key support, while $60 acts as immediate resistance.
Silver (XAG/USD) kicks off the week on a bullish note but struggles to extend its gains as the US Dollar (USD) and US Treasury yields pause their decline following last week’s correction from recent highs. Expectations that the Federal Reserve (Fed) could deliver another interest rate hike before year-end also contain the upside for the non-yielding metal. At the time of writing, XAG/USD trades around $57.65, up nearly 1.15% on the day.
The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 101.95 after falling to 101.58 last week. Meanwhile, the benchmark 10-year US Treasury yield stands near 5.09%, recovering from Thursday’s low of 5.03%.
Technical analysis
From a technical perspective, Silver maintains a bearish structure within a descending parallel channel, forming a series of lower highs and lower lows since peaking near $71 in late August. The metal also trades below its key daily Simple Moving Averages (SMAs).
Momentum indicators remain bearish. The Relative Strength Index (RSI) near 39 and a negative Moving Average Convergence Divergence (MACD) reading reinforce prevailing downside pressure within a strengthening trend backdrop indicated by the Average Directional Index (ADX) above 26.
On the downside, the $55 psychological mark provides strong initial support, as buyers previously stepped in around this level. This area also aligns with the lower boundary of the descending channel. A decisive break below $55 could expose the $50 psychological level.
On the topside, initial resistance appears at the $60 psychological mark, followed by the 100-day SMA at $62.88 and the 50-day SMA at $63.80. Further gains could open the door toward the $68-$70 resistance zone, while the 200-day SMA near $72.08 remains the main longer-term barrier.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
ING’s Francesco Pesole notes that recent AI-driven equity volatility has triggered a sharp drop in front-end US rates, but he does not see this as the start of a major Dollar downtrend. He argues the Dollar may lag other G10 currencies if tech-led stock instability persists, yet still sees scope for DXY to revisit 101.0 in coming weeks.
AI-driven rates repricing tempers Dollar
"Markets appear to have a clear reaction function in mind: stock market turmoil is enough to drastically reduce Federal Reserve tightening plans, even with inflation running hot. The reasoning is probably linked to the market wealth effect that many believe has underpinned US economic resilience. This is enough to suggest the dollar will not be the safe-haven of choice and may actually lag many other G10 currencies if stock market instability originates in tech/AI."
"Still, contagion to broader US and world equity indices has so far been contained, while the Nasdaq drop has only erased the last 30 days of gains. AI-related sentiment will remain an input for FX this week, but could easily fade if tech stocks find some stability. From a macro perspective, despite the repricing lower in US rates, we do not feel this marks the start of a major USD downtrend."
"A December Fed hike remains a likely outcome; policymakers do not appear to be in a position to send a dovish message at the October meeting, and still-elevated energy prices argue against a material recovery in global bond markets."
"A return to 101.0 in DXY remains possible over the coming weeks, but we do not see much more downside beyond that for now."
"For now, we are not observing any obvious FX impact from souring US-Ukraine (and Europe) relationships. Markets are probably quite cautious about pricing in an imminent end to the Russia-Ukraine conflict or any longer-term implications for Europe. Things could change in the case of meaningful developments this week."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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