Forex News
OCBC strategist Christopher Wong writes that USD/JPY climbed after the FOMC as front-end US yields rose and the US Dollar (USD) strengthened. He says markets expect a 25bp BoJ hike to 1.25%, with focus on Governor Ueda’s guidance on further normalisation. Wong sees elevated US yields keeping USD/JPY supported, but warns the pair could turn lower on firmer BoJ tightening signals or softer US data.
Pair supported but vulnerable to BoJ
"USD/JPY moved higher after the FOMC as front-end UST yields rose and the USD strengthened. Attention now turns to tomorrow’s BoJ meeting, where a 25bp hike to 1.25% is widely expected."
"With the hike itself largely anticipated, the bigger question is how Governor Ueda frames the path beyond September, particularly whether the BoJ signals a faster pace of normalisation amid still-elevated inflation."
"For now, elevated UST yields may keep USD/JPY supported, but the pair could turn lower again if the BoJ delivers a firmer signal on further tightening or if softer US data start to unwind some of the Fed repricing."
"Pair was last at 156.30 levels. Daily momentum shows tentative signs of turning mild bullish while rise in RSI moderated. Some consolidation likely after the recent play-out of bullish divergence on MACD. Resistance at 156.70 (38.2% fibo retracement of 2026 low to high), 157 (21 DMA). Support at 155 (23.6% fibo), 153 levels."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- WTI Crude eases below $97.00 and approaches one-week lows at the $96.00 area.
- News that Saudi Arabia has found an alternative route to export Oil to Asia has eased concerns about supply disruptions.
- The uncertain situation in the Middle East is keeping Crude prices stuck near the $100 level.
Crude prices are trading lower for the second consecutive day on Thursday, with the US benchmark West Texas Intermediate (WTI) Oil trading just below $97, down from the four-month highs above $102.00 hit earlier this week and drawing closer to the bottom of the weekly trading range around $96.00.
News reporting that Saudi Arabia has found an alternative route through Oman to export crude to Asian countries has eased some concerns about supply disruptions caused by recent attacks on the Aast-West pipeline, which was used to transport Saudi Oil to the Yanbu port in the Red Sea, an alternative route to the blocked Strait of Hormuz.
Apart from that, Saudi authorities announced on Wednesday a plan to restore the critical pipeline, seeking to return to 40% of its capacity within days and projecting to be fully operational within six weeks.
In the US, data released earlier this week revealed a shorter-than-expected withdrawal of commercial Oil stocks in the week of September 11, which contributed to easing concerns about supply. Data released by the US Energy Information Administration on Wednesday showed that Crude inventories declined by 640K barrels last week, less than half the 1.6 million drop expected, while gasoline and distillate stocks increased from the previous week.
Meanwhile, conflict between the US and Iran remains surrounded by a high level of uncertainty. US President Donald Trump keeps saying that the US is “hopefully towards the end” of the war and claims that Iran is pushing for direct talks. Tehran authorities, however, deny it. This uncertainty is keeping Crude prices from retreating further from the key $100 level.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
- AUD/USD attracts some buyers on Thursday as retreating US bond yields prompt USD profit-taking.
- The Fed’s hawkish outlook and geopolitical risks could limit deeper USD losses, capping spot prices.
- The mixed technical setup warrants some caution before positioning for a further appreciating move.
The AUD/USD pair gains some positive traction on Thursday, snapping a three-day losing streak to the 0.7075 area, or a nearly one-month low, touched the previous day. Spot prices stick to intraday gains through the first half of the European session and currently trade just above the 0.7100 mark, up 0.30% for the day.
US Federal Reserve (Fed) Chair Kevin Warsh’s focus on inflation helps calm the recent selloff in the fixed-income market. This, in turn, triggers a modest pullback in US bond yields, which prompts some US Dollar (USD) profit-taking. Apart from this, bets that the Reserve Bank of Australia (RBA) will raise interest rates later this month offer support to the AUD/USD pair.
However, the Fed's hawkish outlook, signaling one more rate hike this year, along with inflation risks stemming from higher oil prices, could act as a tailwind for US bond yields. Furthermore, escalating tensions in the Middle East keep the geopolitical risk premium in play, which should limit deeper losses for the safe-haven buck and cap the upside for the AUD/USD pair.
From a technical perspective, spot prices climb back above the 38.2% Fibonacci retracement level of the June-September upswing after showing some resilience below the 100-day Simple Moving Average (SMA). This suggests that buyers retain control, albeit momentum indicators hint that upside pressure is losing intensity rather than signaling a decisive reversal.
In fact, the daily Relative Strength Index (RSI) at 45.6 has slipped back toward neutral, and the Moving Average Convergence Divergence (MACD) has turned negative with a contracting profile. Hence, any further move up might confront immediate resistance at the 23.6% Fibo. at 0.7150, with a break above this barrier exposing the recent swing high zone at 0.7238.
On the downside, initial support aligns at the 38.2% Fibo. retracement at 0.7095, followed by a deeper structural floor at the 50.0% retracement near 0.7051 and the 61.8% retracement at 0.7007. Below these levels, broader corrective risks would open the way for deeper losses toward the 78.6% retracement at 0.6945 and the cycle low around 0.6865.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
AUD/USD daily chart
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 Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.06% | -0.02% | -0.31% | -0.00% | -0.35% | -0.35% | -0.11% | |
| EUR | 0.06% | 0.04% | -0.23% | 0.06% | -0.31% | -0.26% | -0.03% | |
| GBP | 0.02% | -0.04% | -0.27% | 0.03% | -0.34% | -0.30% | -0.05% | |
| JPY | 0.31% | 0.23% | 0.27% | 0.26% | -0.04% | -0.06% | 0.19% | |
| CAD | 0.00% | -0.06% | -0.03% | -0.26% | -0.33% | -0.32% | -0.06% | |
| AUD | 0.35% | 0.31% | 0.34% | 0.04% | 0.33% | 0.04% | 0.25% | |
| NZD | 0.35% | 0.26% | 0.30% | 0.06% | 0.32% | -0.04% | 0.28% | |
| CHF | 0.11% | 0.03% | 0.05% | -0.19% | 0.06% | -0.25% | -0.28% |
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).
MUFG’s Derek Halpenny highlights that focus shifts to the Bank of England (BoE), where MUFG expects a hold today but sees rising odds of a November rate hike. Surging natural gas prices and an expected OFGEM cap increase are set to push United Kingdom (UK) Consumer Price Index (CPI) above 4.0%, while August CPI already exceeded BoE forecasts. A hawkish hold could support the Pound, though MUFG doubts significant upside before the UK budget.
BoE hold seen, November hike risk
"Attention now will quickly shift to the BoE monetary policy announcement today at 12 noon (BST). We have written a preview (here) posing the very valid question – how long can the BoE hold out before hiking? We believe the BoE will hold out today but the key takeaways from today will point to the increased prospect of a rate hike in November."
"It is likely to prove increasingly difficult to ignore the developments in energy markets and in particular in natural gas prices with the front future price now up nearly 100% since the start of July. That will translate into a hefty OFGEM utility price cap increase in January that will see annual CPI hit over 4.0%. YoY CPI for August was confirmed at 3.1% yesterday which was above the 2.8% expected by the BoE."
"We expect the BoE to hold today but we would also add that we hold that view with a little less conviction than implied by financial market pricing. Just 2bps of hikes are priced for today and when you consider the last meeting was a 6-3 vote and it would no surprise to see a 5-4 vote today, the market appears a little complacent to a surprise, pre-emptive hike."
"A hawkish hold that tees up a November hike should put some modest upward pressure on front-end yields as back-to-back hikes get better priced (currently 39bps by Dec). That will help support the pound although we remain sceptical of upside scope of any notable magnitude ahead of the UK budget on 28th October."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- Japanese Yen gains ground ahead of an expected 25-basis-point BoJ rate hike on Friday.
- Japanese officials emphasize economic stability, budget control, and achieving a sustainable 2% inflation target.
- US Dollar weakens despite the Federal Reserve raising rates by 25 basis points to curb persistent inflation.
USD/JPY depreciates after three days of gains, trading around 155.80 during the European session on Thursday. The pair loses ground as the Japanese Yen (JPY) advances on market expectations of a 25-basis-point interest rate hike by the Bank of Japan (BoJ) on Friday.
Japanese officials offered cautious remarks on Thursday, with Economy Minister Minoru Kiuchi stating that the government aims to balance economic strength with fiscal sustainability, though he declined to comment directly on interest rates. Finance Minister Satsuki Katayama noted that officials will review budget requests and manage debt issuance to maintain market credibility, while expressing the expectation that the central bank will steer policy appropriately to achieve a stable 2% inflation target.
Meanwhile, the USD/JPY pair faces downward pressure as the US Dollar (USD) holds losses despite the potential for further Federal Reserve policy tightening. The Fed recently raised the federal funds rate by 25 basis points to a target range of 3.75% to 4.00%, marking its first rate increase in three years and aligning with market expectations. Policymakers also signaled that another hike remains possible before the end of the year.
Explaining the move, Fed Chair Kevin Warsh stated that the decision was driven by inflation remaining too high for too long, describing the action as a sober and responsible step to curb price pressures while keeping future increases on the table. Following these comments, money markets priced in roughly a 51% probability of another Fed rate hike at the October meeting, according to the CME FedWatch tool.
Fed dots signal cautious path for rates and core inflation
Analysts at MUFG caution against over-interpreting the latest Fed projections, arguing that “we possibly shouldn’t read too much into the median dot levels and those levels could and very likely will change as developments unfold moving forward.” They highlight that the “4.125% median dot for 2026 and 2027 points to another hike and then no cuts until 2028,” when the median dot “drops by just 25bps and then by another 25bps in 2029 to 3.625%.” MUFG characterises this as “a very cautious removal of the two hikes pencilled in for this year” and notes that it “certainly implies a faster reduction in core CPI will require more than just one additional hike.”
Technical Analysis: USD/JPY remains above 155.50 near nine-day EMA
In the daily chart, USD/JPY trades at 155.80, keeping a bearish near-term bias as spot holds below the 50-day Exponential Moving Average (EMA). Price is, however, stabilizing above the nine-day EMA, hinting at some short-term consolidation rather than an immediate breakdown. The 14-day Relative Strength Index (RSI) at 43.69 stays in neutral territory, suggesting downside pressure persists but without oversold conditions, while the FXS Fed Sentiment Index around 151.79 provides a supportive backdrop that has yet to translate into a bullish reclaim of the longer-term trend.
On the topside, the 50-day EMA at 158.17 is the first meaningful resistance, and the broader bearish tone would likely remain intact while USD/JPY trades below this barrier. On the downside, initial support is seen at the nine-day EMA near 155.45, with the recent price pivot at 155.80 acting as a fragile floor; a sustained move beneath these levels would expose the sentiment anchor around 151.79 as the next support area, opening room for a deeper corrective leg.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
ING strategists Francesco Pesole and Frantisek Taborsky say the US Dollar (USD) now has a stronger floor after the Federal Reserve’s 25bp rate increase and hawkish guidance for another hike by year-end. They note US Dollar Index (DXY) has reached a two‑month high, with upside risks in the near term supported by higher Oil prices and disciplined Fed policy, although their baseline still sees Dollar stabilization and eventual softness into year‑end.
Fed hawkishness underpins near term strength
"Everything about yesterday’s FOMC meeting was hawkish. The widely expected 25bp hike was accompanied by a dot plot showing strong consensus for another hike this year. Out of 18, 12 members project one more increase and four project two more this year. Incidentally, growth and inflation projections were revised higher and unemployment lower. Chair Kevin Warsh didn’t give much away in the press conference, but reiterated a strong commitment to price stability and didn’t seem to indicate that policy is restrictive at current levels. In his own words, the Fed simply reduced a “dose of accommodation”."
"Despite hawkish pre-meeting bets, all of that still triggered a 10-12bp jump in the two-year USD swap rate. Market pricing for October is 13bp and for December 32bp."
"The dollar rallied across the board, with DXY up 0.6% and at a two-month high. We think risks are more balanced for USD now that the monetary policy boost has been absorbed, but they remain tilted to the upside in the near term. First, because such a hawkish message means – in our view – markets are given the freedom to fully price in October for the next move should data come in hot and/or oil prices rise further."
"Second, because the pledge of monetary discipline raises the bar for a return of the debasement trade. Third, because oil prices still make for a supportive external environment for the dollar."
"Our baseline call for the coming months remains one of stabilisation around current ranges first and a softer dollar then into year-end, but is heavily reliant on a de-escalation in the Gulf. As long as oil remains supported, it’s hard to argue against the bullish USD momentum."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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