Forex News
- GBP/USD falls as French fiscal turmoil strengthens US Dollar demand.
- US services cool, but rising prices keep inflation concerns alive.
- Hawkish BoE signals limit Sterling losses ahead of Mann speech.
The Pound Sterling (GBP) dives more than 0.19% against the US Dollar (USD) at the beginning of the week, despite a dip in US services sector activity and elevated US Treasury yields. The GBP/USD trades at 1.3218 at the time of writing.
Sterling weakens as Eurozone stress outweighs softer US services momentum
Sentiment remains upbeat, with US equities edging higher, while the buck gains traction as the Euro (EUR) tumbles amid the fiscal crisis in France, widening spreads between OATs and German Bunds.
US data showed that September’s ISM Services PMI slowed from 55.4 to 54.9, below estimates of 55, while input costs continued to rise, above forecasts. Prices paid rose from 72.6 to 74, exceeding the 73.3 forecast, while new orders cooled and the employment sub-component increased.
In the meantime, tensions in the Middle East remain high as Yemeni forces clash with the Houthis as they aim to reclaim Bab al-Mandab. Recently, Yemeni Forces claimed that they’ve taken control of Al-Makah with air support, following an exchange of fire with Houthi militias.
This pushed Oil prices lower, with West Texas Intermediate (WTI), the US crude benchmark, losing almost 1%, down to $90.35. Notably, the US Dollar's positive correlation with WTI pushed the Greenback lower after the US Dollar Index (DXY) touched daily highs of 102.53.
The DXY, which measures the performance of the American currency versus six others, is at 102.25, up 0.32%.
In the UK, the S&P Global Services PMI exceeded estimates, rising to 52.1 from 51.7, but remained below August’s 52.5 print, indicating a moderate deceleration. Meanwhile, expectations that PM Andy Burnham plans to close ties with the European Union (EU), capped the drop of Sterling.
Additionally, remarks by Bank of England Governor Andrew Bailey and Deputy Governor Dave Ramsden increased the likelihood of further BoE tightening.
In the meantime, the UK economic docket is light, with traders eyeing speeches by BoE’s Catherine Mann. In the US, traders are eyeing the release of the FOMC's last meeting minutes on Wednesday.
GBP/USD Price Forecast: Technical Outlook
In the daily chart, GBP/USD trades at 1.3213, keeping a bearish near-term tone as spot holds well below the cluster of simple moving averages around 1.3451 and the former upward trend-line supports, now turned resistance, at 1.3556 and 1.3754. The downward trend-line barriers at 1.3306 and 1.3429 reinforce the notion of a capped market, while the Relative Strength Index (14) near 34 remains just above oversold territory, suggesting persistent selling pressure but with downside momentum losing some intensity.
With no clearly defined nearby support levels below 1.3213 in the presented dataset, focus stays on the topside where initial resistance emerges at the broken trend-line level around 1.3306, followed by the descending trend-line at 1.3429 and the triple simple moving average band near 1.3451. Above that, the reclaimed former support lines at 1.3556 and 1.3754 form a broader resistance zone that would need to be overcome to ease the current bearish bias and open the way for a more sustained recovery.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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 Euro.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.48% | 0.22% | 0.13% | 0.04% | -0.26% | 0.55% | 0.38% | |
| EUR | -0.48% | -0.22% | -0.32% | -0.42% | -0.56% | 0.00% | -0.06% | |
| GBP | -0.22% | 0.22% | -0.10% | -0.19% | -0.34% | 0.21% | 0.16% | |
| JPY | -0.13% | 0.32% | 0.10% | -0.11% | -0.31% | 0.32% | 0.25% | |
| CAD | -0.04% | 0.42% | 0.19% | 0.11% | -0.19% | 0.40% | 0.33% | |
| AUD | 0.26% | 0.56% | 0.34% | 0.31% | 0.19% | 0.57% | 0.52% | |
| NZD | -0.55% | -0.00% | -0.21% | -0.32% | -0.40% | -0.57% | -0.07% | |
| CHF | -0.38% | 0.06% | -0.16% | -0.25% | -0.33% | -0.52% | 0.07% |
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).
- EUR/CHF trades on the back foot as France’s fiscal troubles weigh on the Euro.
- The cross trades below the 50-day SMA, while the 100-day SMA near 0.9297 offers initial support.
- A bearish MACD crossover and RSI near 36 point to growing selling pressure.
EUR/CHF holds modest losses on Monday as growing fiscal concerns in France weigh on the Euro (EUR). However, the cross has reversed most of its intraday decline as buying interest in the Swiss Franc (CHF) remains limited due to Switzerland’s wide interest-rate gap with other major economies and the Swiss National Bank’s (SNB) readiness to counter excessive Franc strength. At the time of writing, EUR/CHF trades around 0.9318 after hitting an intraday low of 0.9272.
Euro pressured as France fiscal strains complicate ECB backstop
Strategists at Brown Brothers Harriman note that the Euro is lagging its peers, with “EUR is underperforming all major currencies, with EUR/USD dropping briefly to an intra-day low at 1.1161, its lowest level since May 2025.” They highlight that “France’s budget crisis is spilling into other Eurozone sovereign bond markets, widening yield spreads to Germany,” amplifying concerns around fiscal risk across the bloc.
BBH points out that the ECB’s Transmission Protection Instrument “provides a backstop against disorderly spread widening, but activation is contingent on EU member state pursuing ‘sound and sustainable fiscal and macroeconomic policies.’” In their view, “France's deteriorating finances complicate the case for intervention, although broader contagion would increase pressure on the ECB to act.”
At the same time, BBH notes that ECB Chief Economist Philip Lane has underlined that the “increase in long-term interest rates constitutes a material tightening of financial conditions for the euro area.” Taken together, they argue this leaves the Euro “facing downside pressure from both rising fiscal risk and a potentially shallower ECB hiking cycle.”
Technical analysis
The daily chart shows EUR/CHF under renewed selling pressure after a sharp rejection from the 0.9480 area. The cross has fallen below the 50-day Simple Moving Average (SMA) at 0.9387, weakening the near-term picture. However, it remains above the 100-day SMA at 0.9297 and the 200-day SMA at 0.9239, keeping the broader structure relatively supported.
Momentum indicators lean bearish. The Relative Strength Index (RSI) has dropped to around 36, reflecting growing selling pressure but remaining above oversold territory. The Moving Average Convergence Divergence (MACD) line has crossed below the signal line, while the histogram has moved deeper into negative territory.
On the downside, the 100-day SMA near 0.9297 offers initial support, followed by Monday’s low around 0.9272. A clear break below this area could expose the 200-day SMA at 0.9239. On the topside, the 50-day SMA at 0.9387 acts as immediate resistance, followed by 0.9430. A sustained move above this level could open the door to the 0.9500 psychological mark.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.45% | 0.23% | 0.11% | 0.02% | -0.30% | 0.50% | 0.34% | |
| EUR | -0.45% | -0.17% | -0.30% | -0.37% | -0.56% | -0.01% | -0.07% | |
| GBP | -0.23% | 0.17% | -0.13% | -0.21% | -0.38% | 0.15% | 0.11% | |
| JPY | -0.11% | 0.30% | 0.13% | -0.10% | -0.32% | 0.29% | 0.23% | |
| CAD | -0.02% | 0.37% | 0.21% | 0.10% | -0.21% | 0.37% | 0.31% | |
| AUD | 0.30% | 0.56% | 0.38% | 0.32% | 0.21% | 0.55% | 0.50% | |
| NZD | -0.50% | 0.01% | -0.15% | -0.29% | -0.37% | -0.55% | -0.06% | |
| CHF | -0.34% | 0.07% | -0.11% | -0.23% | -0.31% | -0.50% | 0.06% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
- AUD/USD gains 0.34% on Monday and trades around 0.6970.
- US services activity slows slightly in September but remains firmly in expansion territory.
- The US Dollar remains supported by elevated Treasury yields and Euro weakness.
AUD/USD advances on Monday, trading around 0.6970 at the time of writing, up 0.34% on the day. The pair manages to gain ground despite persistent strength in the US Dollar (USD), which remains supported by elevated Treasury yields and weakness in the Euro (EUR).
In the United States (US), the latest activity data confirm the resilience of the services sector, although the figures provide mixed signals. The Institute for Supply Management (ISM) Services Purchasing Managers Index (PMI) eased to 54.9 in September from 55.4 in August, slightly below the market consensus of 55. However, the indicator remained comfortably above the 50 threshold separating expansion from contraction.
The details show inflationary pressures picking up, with the Prices Paid Index rising to 74 from 72.6 previously. The Employment Index improved slightly to 50.1 from 47.8, while the New Orders Index declined to 59.8 from 60.9 in August.
Meanwhile, the final S&P Global Services PMI was revised slightly higher to 58.8 in September from the preliminary estimate of 58.7. Overall, the figures suggest that US economic activity retained solid momentum, even as the ISM survey pointed to some loss of steam.
The data were therefore not enough to derail the Greenback's advance. The US Dollar Index (DXY), which measures the value of the US Dollar against a basket of six major currencies, rises above 102.50 on Monday, reaching its highest level in 18 months. A significant part of the DXY's advance, however, stems from weakness in the Euro, which accounts for 57.6% of the index. The single currency comes under pressure amid concerns over French debt, as the spread between French and German 10-year government bond yields reaches around 150 basis points, its widest level since 2011.
US Treasury yields also remain elevated, providing additional support to the Greenback. The benchmark 10-year US Treasury yield holds around 5.30%, close to its recent peak of 5.34%, the highest level since 2002.
AUD/USD technical analysis
In the one-hour chart, AUD/USD trades at 0.6968, holding a mildly bullish near-term bias as it sits above the 100-period simple moving average (SMA) at 0.6953 and the nearby horizontal support at 0.6955. The pair is, however, still capped by a dense band of overhead levels starting with the 200-period SMA at 0.6988, while the Relative Strength Index (14) around 60 suggests constructive but not overextended momentum.
On the topside, initial resistance emerges at 0.6980 ahead of the 200-period SMA at 0.6988, with further bullish clearance needed toward 0.7005 and then 0.7045 before the 0.7075–0.7105 band and 0.7140 come into view. On the downside, immediate support is seen at 0.6955 and the 100-period SMA at 0.6953, while deeper floors align at 0.6907 and 0.6883, where a break would undermine the current constructive tone and shift focus back to a broader corrective phase.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Brown Brothers Harriman’s (BBH) Elias Haddad reports the Euro (EUR) is underperforming major currencies, with EUR/USD briefly hitting 1.1161, its lowest since May 2025. Elias Haddad flags France’s budget crisis spilling into wider Eurozone bond markets and complicating potential European Central Bank (ECB) Transmission Protection Instrument activation, leaving the Euro pressured by rising fiscal risk and expectations of a shallower ECB hiking cycle.
France risk and ECB constraints
"EUR is underperforming all major currencies, with EUR/USD dropping briefly to an intra-day low at 1.1161, its lowest level since May 2025. France’s budget crisis is spilling into other Eurozone sovereign bond markets, widening yield spreads to Germany."
"The ECB’s Transmission Protection Instrument (TPI) provides a backstop against disorderly spread widening, but activation is contingent on EU member state pursuing “sound and sustainable fiscal and macroeconomic policies.” France deteriorating finances complicate the case for intervention, although broader contagion would increase pressure on the ECB to act."
"Meanwhile, ECB Chief Economist Philip Lane highlighted the “increase in long-term interest rates constitutes a material tightening of financial conditions for the euro area.” That leaves EUR facing downside pressure from both rising fiscal risk and a potentially shallower ECB hiking cycle."
"Immediate support levels for EUR/USD are offered at 1.1200 (August-September 2024 double top) and 1.1111 (50% retracement of 2025-2026 uptrend)."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- DXY tops 102.50, its highest since April 2025, as French bonds slide.
- The Euro, 57.6% of the index, falls to its lowest since May 2025.
- The US ISM services index eases to 54.9, just under the 55 forecast.
France's government owes close to 120% of what its economy produces in a year. The gap between what France and Germany pay to borrow for 10 years reached about 1.5 percentage points on Friday, the widest since 2011. European Central Bank (ECB) President Lagarde had told a French newspaper two days earlier that this isn't 2011.
The Euro makes up 57.6% of the Dollar Index, and its fall to the lowest since May 2025 accounted for about three-quarters of the index's climb to Monday's high.
The Institute for Supply Management (ISM) services index came in at 54.9 against a 55 forecast. Most of the index's slide after the release came from the Euro rising back above 1.1200, not from lower US yields, which edged higher.
On the charts
Monday's rise came mostly in two bursts, through the October 1 high near 102.20 to a peak just above 102.50. The index has since given back about half of that gain in two drops, and both have held above 102.00. The rebound between the drops stalled short of 102.40, and the ISM release near that high produced a dip that was gone within four bars.
The pullback from the peak is less than a tenth of the run from the September 9 low near 98.60, after three straight weekly gains. Momentum gauges remained pinned near maximum readings since late September.
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.
- Gold trades flat as a stronger US Dollar and elevated Treasury yields cap the upside.
- Persistent inflation risks keep the broader Fed policy outlook tilted towards further tightening.
- Buyers need to reclaim $4,200 to regain near-term bullish momentum.
Gold (XAU/USD) (XAU/USD) lacks clear directional momentum on Monday. A stronger US Dollar and elevated US Treasury yields cap the upside, while easing Federal Reserve (Fed) interest-rate hike bets cushion the downside. At the time of writing, XAU/USD trades around $4,142, little changed on the day.
The latest US business surveys offered little fresh direction for Gold. The S&P Global Services Purchasing Managers’ Index (PMI) was revised marginally higher to 58.8 in September from the preliminary reading of 58.7, while the Composite PMI held at 58.4. In contrast, the ISM Services PMI slipped to 54.9 from 55.4, narrowly missing the 55.0 forecast.
The data followed Friday’s weaker-than-expected employment report, which showed that Nonfarm Payrolls (NFP) increased by only 29K in September, well below the 90K forecast. Employment gains for the previous two months were revised down by a combined 60K, while the Unemployment Rate edged up to 4.2%. Annual wage growth slowed to 3.0%.
Earlier, August’s Personal Consumption Expenditures (PCE) inflation report also fell short of expectations, while previous readings were revised lower. Together, the softer employment and inflation figures have weakened the case for another Fed rate hike at the October 27-28 meeting.
According to the CME FedWatch Tool, traders now price in only around a 20% chance of a rate hike in October, down from nearly 70% last week. However, the broader policy outlook remains tilted towards further tightening as policymakers remain concerned about inflation running above the 2% target, while Middle East tensions keep energy-driven inflation risks alive. This caps Gold’s upside while keeping the US Dollar and Treasury yields supported.
Economists at Deutsche Bank argue that “although the headline payroll number was disappointing, the wider labour-market picture remains relatively resilient, particularly alongside recent ADP and jobless-claims readings,” and on that basis “our economists continue to expect two further 25bp Fed hikes over the next couple of quarters.” They add that “since the meeting, Fed communication has broadly reinforced the quarterly pace of rate hikes implied by the September SEP,” leaving their view of the Fed’s trajectory broadly unchanged despite the softer payroll print.
The US Dollar also draws support from a sharp decline in the Euro (EUR) amid growing political and fiscal concerns in France. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 102.20 after touching an intraday high of 102.53, its highest level since April 2025.
Meanwhile, the benchmark 10-year US Treasury yield holds near 5.30%, after touching 5.34% last week, its highest level since 2002. A stronger US Dollar makes Gold more expensive for overseas buyers, while elevated yields increase the opportunity cost of holding the non-yielding metal.
Looking ahead, traders await the September Federal Open Market Committee (FOMC) meeting minutes on Wednesday and Initial Jobless Claims on Thursday. The preliminary University of Michigan Consumer Sentiment Index and inflation expectations will be released on Friday.
Technical analysis: Buyers struggle to reclaim $4,200
The 4-hour chart shows XAU/USD consolidating below its major moving averages, keeping the near-term bias tilted to the downside. Buyers are struggling to sustain gains above the $4,200 psychological mark, which closely aligns with the 50-period Simple Moving Average (SMA) at $4,198 and acts as the first resistance.
A sustained break above this area could expose the 100-period SMA at $4,265, followed by the 200-period SMA near $4,374. A decisive move above these moving averages would be needed to strengthen the bullish outlook. The Relative Strength Index (RSI) hovers near 46, reflecting neutral-to-soft momentum, while the Moving Average Convergence Divergence (MACD) remains slightly above zero, pointing to a modest recovery attempt.
On the downside, the $4,100 psychological mark offers immediate support. A clear break below this level could intensify selling pressure and expose the $4,000-$3,950 support zone.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
- USD/CAD retreats from its highest level since April 2025 as the Loonie attracts fresh buying.
- The US Dollar struggles to extend its rally following mixed US business activity figures.
- Attention turns to Canada’s labour market report on Friday.
USD/CAD reverses its earlier gains on Monday as the Canadian Dollar (CAD) outperforms its major peers, while the US Dollar (USD) consolidates after mixed US business activity data. At the time of writing, the pair trades around 1.4250, easing from an intraday high of 1.4293, its highest level since April 2025.
The final S&P Global Services Purchasing Managers’ Index (PMI) was revised slightly higher to 58.8 in September from the preliminary reading of 58.7, while the Composite PMI was confirmed at 58.4. In contrast, the ISM Services PMI slipped to 54.9 from 55.4, narrowly missing the market forecast of 55.
The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 102.20 after touching 102.53 earlier in the day, a fresh year-to-date high. The Greenback draws support from a sharp decline in the Euro (EUR) amid growing concerns over France’s public finances and political uncertainty in Spain.
Elevated US Treasury yields also support the US Dollar, even as traders scale back expectations of another Federal Reserve (Fed) interest-rate hike this month following last week’s weaker-than-expected US employment report. Markets still expect the Fed to raise borrowing costs later this year as inflation remains above the central bank’s 2% target and energy-related price pressures persist.
The benchmark 10-year US Treasury yield holds near 5.32%, close to last week’s peak of 5.34%, its highest level since 2002. However, the rise in yields is not solely driven by the monetary policy outlook. Growing concerns over the US debt burden and broader fiscal position are also pushing borrowing costs higher.
Against this backdrop, the US Dollar may struggle to extend its recent gains, although expectations of further Fed tightening could keep the downside limited in the near term.
On the Canadian side, the intraday strength appears to reflect technical buying and profit-taking after the Loonie’s prolonged weakness rather than a clear improvement in its fundamental outlook. The yield gap remains firmly in favour of the US Dollar, with the Canadian 10-year government bond yield near 3.99%, compared with around 5.32% for the equivalent US Treasury note.
Analysts at Brown Brothers Harriman note that attention will be on Canada’s September labor force survey due Friday, with the economy expected to add “just +5.0k jobs after losing -41.7k jobs in August.” They point out that the “unemployment rate is seen rising 0.1ppt to 6.5% on an unchanged participation rate of 65.0%, pointing to weak labor demand.”
Against this setting, BBH argues that “BOC rate hike pricing (100bps in the next twelve months) looks too aggressive and leaves CAD vulnerable to a dovish repricing.” They stress that “Canada's core inflation is near the banks’ 2% target and indicators point to continued excess supply in the economy,” suggesting limited justification for such an aggressive tightening path and, in turn, a potentially fragile Canadian Dollar if market expectations are scaled back.
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 New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.41% | 0.19% | 0.11% | -0.02% | -0.31% | 0.46% | 0.31% | |
| EUR | -0.41% | -0.19% | -0.27% | -0.41% | -0.55% | -0.03% | -0.05% | |
| GBP | -0.19% | 0.19% | -0.08% | -0.22% | -0.35% | 0.15% | 0.13% | |
| JPY | -0.11% | 0.27% | 0.08% | -0.14% | -0.34% | 0.24% | 0.21% | |
| CAD | 0.02% | 0.41% | 0.22% | 0.14% | -0.19% | 0.36% | 0.33% | |
| AUD | 0.31% | 0.55% | 0.35% | 0.34% | 0.19% | 0.52% | 0.50% | |
| NZD | -0.46% | 0.03% | -0.15% | -0.24% | -0.36% | -0.52% | -0.03% | |
| CHF | -0.31% | 0.05% | -0.13% | -0.21% | -0.33% | -0.50% | 0.03% |
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).
Commerzbank’s Moses Lim notes that USD/KRW declined on Friday and over the week as robust South Korean exports and supportive policy actions bolstered the Korean Won. Elevated but easing inflation allows the Bank of Korea to stay hawkish while likely holding rates in October. Reduced government bond issuance and exporter Dollar selling further underpin domestic markets and the currency.
Won benefits from exports and bonds
"September CPI matched expectations and eased to 2.9% yoy from 3.1% in August. The moderation was largely driven by government relief measures such as petroleum price caps and a KRW193bn subsidy programme to contain food prices during the Chuseok holiday period. Core inflation also slowed, moderating to 2.8% from 3.4% previously as August's favourable base effects faded. Despite the decline, headline inflation remained above the Bank of Korea's (BoK) 2% target for a seventh consecutive month, suggesting underlying price pressures remain elevated."
"On trade, September exports surprised on the upside, rising 83.5% yoy (Bloomberg consensus: 62.5%) vs 68.7% in August. The outperformance came despite fewer working days, with calendar-adjusted exports accelerating to 104.8% vs 72.5% previously. Semiconductor exports remained the main growth engine, surging 262% vs 209% previously. Higher export prices likely continued to provide support."
"In FX, USD/KRW fell 0.9% to 1,348 last Friday, bringing its weekly decline to 0.8%. There were reports of increased dollar selling from major domestic exporters as firms repatriated overseas earnings to finance domestic capital expenditure. Additionally, a softer USD on Friday provided additional support to KRW. "
"On monetary policy, elevated inflation and strong export growth momentum should allow BoK to maintain its hawkish stance. However, given its back-to-back 25bp hikes in July and August, BoK will likely stay on hold at 3.0% in October to assess the cumulative impact of prior rate hikes."
"Separately, the Ministry of Finance and Economy announced plans to issue KRW12tn of bonds in October, KRW5tn less than initially planned. The reduction will be financed through higher-than-expected tax revenues generated by the electronics upcycle. Finance Minister Lee Hyoung-il also signalled that the government is willing to scale back bond issuance or conduct emergency buybacks to stabilise the bond market."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Christopher Wong at OCBC expects the Indonesian Rupiah (IDR) to see some near-term relief from softer United States (US) payrolls and a wider trade surplus, with policymakers emphasizing IDR stability. However, elevated long-end US Treasury yields and high Brent prices keep the external backdrop challenging, suggesting only modest USD/IDR pullback unless US yields and Oil move clearly lower.
Recovery needs yields and Oil lower
"IDR may find some near-term relief in the open following softer US payrolls last Fri, while Indonesia’s wider-than-expected August trade surplus provides an additional buffer. However, the improvement in the trade balance was partly due to weaker-than-expected imports and may not yet signal a sustained improvement in the external position."
"Domestically, policymakers continue to signal a focus on IDR stability. BI stressed that the shift towards greater use of derivatives does not represent a reduction in the intensity of its FX stabilisation efforts, while the Ministry of Finance highlighted coordination with BI and the importance of maintaining SBN attractiveness."
"Near term, there may be room for some IDR recovery, particularly given relatively bearish positioning, but a more sustained move would likely require a clearer moderation in US yields and oil prices."
"USD/IDR last closed at 17875. Mild bullish momentum shows signs of moderation while RSI fell. Room for retracement. Support at 17820/40 levels (50, 100 DMAs, 23.6% fibo retracement of 2026 low to high), 17760 (21 DMA). Resistance at 17950, 18000 levels."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
United Overseas Bank (UOB) strategist Quek Ser Leang notes USD/SGD slipped to 1.2781 on Friday, with the SGD NEER staying well above its midpoint. For the intraday session, he expects the pair to hold within 1.2768–1.2832, aligning with technical levels at 1.2775/1.2815. On a 1–3 week and 1–3 month horizon, he still sees scope for a recovery toward 1.2835 while 1.2765 acts as strong support.
Dollar-Singapore seen capped near 1.2835
"24-HOUR VIEW: The following are excerpts from our update last Friday: “USD is likely to trade with an upside bias, but the major resistance at 1.2835 could be out of reach for now. We noted that “there is another resistance level at 1.2820”. The subsequent price movements did not unfold as expected. USD rose to 1.2818, but during the NY session, it briefly fell to 1.2772 before recovering to close 0.10% lower at 1.2790. There has been no shift in either downward or upward momentum. Today, USD is likely to range-trade between 1.2775 and 1.2815."
"1-3 WEEKS VIEW: Last Friday (02 Oct, spot at 1.2800), we revised our USD view from neutral to positive. We indicated that “upward momentum is building again, and USD is likely to rise toward 1.2835.” We added, “a break below the ‘strong support’ level, now at 1.2765, would indicate that USD could continue to range-trade.” USD subsequently rose to 1.2818 before staging a relatively sharp decline to 1.2772. The buildup in momentum has eased somewhat, but we will continue to hold the same view as long as 1.2765 remains intact."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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