Forex News

• Gold briefly tumbles below $4,400 after the NFP release before staging a recovery.
• US Nonfarm Payrolls rose by 162K in August, well above the 56K market forecast.
• The $4,500 mark acts as immediate resistance, followed by the 200-day SMA near $4,534.

Gold (XAU/USD) remains under pressure on Friday after stronger-than-expected United States (US) Nonfarm Payrolls (NFP) data revive expectations of a Federal Reserve (Fed) rate hike. The metal tumbled to an intraday low near $4,365 and was down more than 2% at one stage before recovering as the US Dollar (USD) and Treasury yields lost momentum. At the time of writing, XAU/USD trades around $4,435, down 0.85% on the day.

The US economy added 162K jobs in August, well above market expectations for a 56K increase. July’s figure was revised higher to a gain of 21K from the previously reported 23K decline, while June payrolls were revised to 31K from 20K. The Unemployment Rate held steady at 4.1%, as expected.

The US Dollar and Treasury yields jumped following the employment report but have since struggled to extend their gains, helping Gold recover from its intraday low. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 99.17 after rising as high as 99.36.

Meanwhile, the benchmark 10-year Treasury yield eases to around 4.77% after retesting 4.81%, its highest level since October 2023, touched earlier this week.

The strong payroll gains allow the Fed to focus more closely on the inflation side of its mandate, putting next week’s US Consumer Price Index (CPI) and Producer Price Index (PPI) data firmly in focus. The upbeat employment report reverses some of the dovish repricing triggered by less-hawkish comments from Fed Governor Christopher Waller on Thursday.

Waller said he is “finally seeing some signs of disinflation,” adding that the “current rate setting could get us back to 2% inflation.” He also said the “rate decision in September hinges on August inflation” and that “if August inflation data comes in hot, I would consider a rate hike.”

According to the CME FedWatch Tool, markets now price in around a 60% chance of a 25-basis-point rate hike at the September 15-16 meeting, up from 50% before the NFP release.

Analysts at OCBC remain “constructive” on Gold, but caution that the near-term path is likely to stay “highly sensitive to Fed repricing.” They highlight that “next week’s CPI and PPI should be more decisive in determining whether the recent disinflation trend is sufficient to keep the Fed on hold.” OCBC experts also note that “geopolitical tensions remain supportive at the margin,” but warn that “higher oil prices are a two-sided risk if they feed back into inflation expectations and yields.”

Technical analysis: Buyers eye 200-day SMA

XAU/USD holds just above the 50.0% Fibonacci retracement at $4,371 but is still capped beneath the 200-day Simple Moving Average (SMA) at $4,534. This configuration suggests a corrective tone within a broader downbeat backdrop, with the 100-day SMA at $4,353 offering nearby trend support. The Relative Strength Index (RSI) on the daily chart is at 49, sitting near neutral, while the Moving Average Convergence Divergence (MACD) remains negative and below its signal line, hinting that upside attempts could fade under the weight of overhead resistance.

On the topside, initial resistance is seen at the 38.2% Fibonacci retracement at roughly $4,448, ahead of a dense cap formed by the 200-day SMA around $4,534 and the 23.6% retracement near $4,544. On the downside, immediate support emerges at the 50.0% retracement at $4,371, with further cushions at the 61.8% level around $4,293 and the 78.6% retracement near $4,183. A break below these steps would expose the prior swing floor around the 100.0% retracement at $4,042.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

• USD/CHF gives back part of its NFP-driven jump but remains positive on the day.
• Stronger-than-expected US Nonfarm Payrolls lift expectations of a Federal Reserve rate hike in September.
• Subdued Swiss inflation gives the Swiss National Bank room to keep its policy rate at 0%.

USD/CHF trades higher on Friday as stronger-than-expected United States (US) Nonfarm Payrolls (NFP) data trigger fresh volatility. The pair jumped to 0.8126 following the release before giving back part of its advance. At the time of writing, USD/CHF trades around 0.8102, up nearly 0.34% on the day.

US Nonfarm Payrolls (NFP) rose by 162K in August, comfortably beating expectations for a 56K increase. July’s reading was revised sharply higher to a gain of 21K from the previously reported 23K decline, while June payrolls were revised to 31K from 20K. The Unemployment Rate held steady at 4.1%, as expected.

The US Dollar and Treasury yields jumped in the immediate aftermath of the report, although both have since lost momentum. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 99.15 after rising as high as 99.39 following the data.

Even so, the strong employment figures have lifted expectations of a Federal Reserve (Fed) rate hike at the September 15-16 meeting. According to the CME FedWatch Tool, markets now see around a 60% chance of a 25-basis-point increase, up from roughly 50% before the NFP release.

US President Donald Trump welcomed the data in a Truth Social post, calling it a “great jobs number,” while renewing his call for lower borrowing costs. Trump said that “a strong country means a lower interest rate,” adding, “LOWER THE RATE OR I’LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT.” He also said the “Fed Board, with its great new leader, must get smart.”

The US Dollar’s inability to sustain its initial gains reflects lingering uncertainty over the Fed’s monetary policy path. Although the robust jobs report strengthens the case for a September rate hike, recent data have also pointed to moderating inflation. With policymakers remaining committed to restoring price stability, next week’s August Consumer Price Index (CPI) and Producer Price Index (PPI) reports will be crucial in determining whether the Fed raises rates at its upcoming meeting.

On the Swiss side, inflation remains subdued, allowing the Swiss National Bank (SNB) to keep its policy rate at 0%. August inflation exceeded expectations, rising 0.4% MoM following July’s 0.1% decline, while the annual rate accelerated to 0.8% from 0.4%.

According to BBH, “the SNB has plenty of room to keep rates at 0.00% for some time, given that inflation remains well within the bank’s price stability mandate of less than 2% per annum,” a backdrop that they suggest may limit sustained upside for the Franc over the coming quarters.

Royal Bank of Canada (RBC) economist Claire Fan notes Canada’s labour market lost 42,000 jobs in August, partly reversing earlier gains and leaving modest year-to-date job growth. She emphasizes structural factors like demographics and weaker immigration as key drags. Despite this, she highlights improving unemployment, stronger hours worked, and expects solid domestic demand to support further labour market improvement into 2027.

Structural drags but improving indicators

"Headline job growth is notoriously volatile, and we continue to continue to point to structural changes, including rising retirement from aging demographics and slowing population growth from weak immigration as bigger drivers behind dismal job growth in Canada this year."

"As employment is impacted by those structural changes, we have been relying more on the unemployment rate as a better gauge of cyclical conditions."

"In August, the unemployment rate held onto improvements in the prior months."

"This is in line with our own analysis, that continues to expect U.S. tariffs will have pronounced, but targeted effect on Canada’s labour market –we estimated 0.4% of jobs are directly involved in producing the goods that are on the new Section 338 tariff lists."

"Near-term labour market impacts will be watched closely but we continue to expect solid domestic demand, as was seen in GDP data in Q2 will support further labour market improvement into 2027."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Commerzbank’s Dr. Christoph Balz notes that the U.S. labor market surprised to the upside in August, with Nonfarm Payrolls and private sector jobs both rising strongly while the unemployment rate held at 4.1%. Wage growth continued to slow. The bank stresses that the Federal Reserve, led by Chairman Warsh and Governor Waller, will now focus on August consumer price data for the September 15–16 policy decision, where Commerzbank still expects no rate change.

Jobs strength shifts focus to inflation

"In the U.S., the number of jobs rose by 162,000 in August. The unemployment rate remained at 4.1%, indicating that the economy continues to be at full employment. Overall, the report exceeded expectations."

"From the Federal Reserve’s perspective, however, consumer prices are likely to be more important in determining whether interest rates will be raised on September 16. August’s inflation figures will be released next Friday."

"In August, employment rose by a surprisingly strong 162,000 (consensus estimate: 55,000; Commerzbank forecast: 50,000). In addition, the figures for previous months were revised upward by a total of 55,000. For example, the number of jobs in July did not fall by 23,000 as initially reported, but rose by 21,000."

"Overall, the labor market is thus in solid shape. The trend in employment growth, measured by the six-month average, is pointing upward again. The unemployment rate is roughly at the level generally associated with full employment in the U.S."

"We continue to expect interest rates to remain unchanged, but the risk that the Fed will raise rates after all has certainly increased."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Nomura’s Global Markets Research team, led by Andrzej Szczepaniak, George Buckley and Josie Anderson, expects the ECB to raise the depo rate by 25bp to 2.50% at the 10 September meeting and then pause. The analysts see risks skewed toward further tightening if Brent stays elevated, but anticipate Lagarde will sound dovish versus market pricing and avoid pre‑committing to additional hikes.

September hike seen then extended pause

"We forecast the ECB will raise rates by 25bp at its 10 September meeting, lifting the depo rate to 2.50%. We believe that rising price pressures, owing to the ongoing US-Iran war, and the euro area’s economic resilience, suggest a September rate hike is a done deal. Importantly, we expect the September rate hike to be robust under all scenarios, including the milder one, as was the June rate hike."

"After the September meeting, we expect no more rate hikes. That said, risks are clearly skewed toward further hikes. A lot depends on the longevity and severity of the Iran war, and whether the price of Brent crude oil stays around $95/bbl, rises higher or falls back down to pre-war levels as happened when the Islamabad Memorandum was in force."

"If the re-escalation drags on to end-September or end-October, and remains in the range $80-100/bbl, we would expect the ECB to hike additionally in December. That said, if the price of Brent crude oil rose to above $100/bbl and remained there until end-September or mid-October, the ECB may bring forward its December 2026 hike to October (the October meeting is 29 October)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• Donald Trump calls for sharply lower interest rates despite stronger-than-expected US job creation.
• The US President threatens to reduce trade with countries running trade surpluses with the United States.
• Trump argues that the United States' economic and financial strength warrants some of the lowest borrowing costs in the world.

In a post on Truth Social, United States (US) President Donald Trump welcomed the creation of 162K jobs in August, a figure he described as significantly above expectations.

Despite the strength of the labor market, the US President renewed his calls for a significantly more accommodative monetary policy from the Federal Reserve (Fed). Trump argued that the United States’ stronger creditworthiness should translate into lower interest rates and said the country should have the lowest rates in the world.

Trump also stepped up the pressure by directly linking interest rates to his trade policy. “Lower the rate or I’ll stop trading with countries with which we have a deficit,” he said, threatening to reduce trade with partners running surpluses with the United States.

The US President presented this approach as an alternative to tariffs and called on the Fed Board, now led by what he described as its “great new leader,” to lower borrowing costs. The latest intervention adds to political pressure on the US central bank as investors assess the future path of interest rates in light of the latest employment data.

TD Securities strategists note that Canada’s softer August labour report, including weaker employment momentum and slower wage growth, is unlikely to materially change the Bank of Canada’s (BoC) assessment of the labour market. However, the combination of a downside surprise in Canadian jobs and a stronger-than-expected US payrolls report has weighed on the Canadian Dollar (CAD). They expect USD/CAD to remain anchored around 1.39 in the near term and see CAD underperforming its peers as its relative appeal fades.

Softer jobs, slower wages

"Even with the softer headline print, this report is unlikely to shift the Bank of Canada's perception of Canadian labour markets, as it did note that demand for labour remains subdued despite recent improvements in Wednesday's policy statement."

"Today's report leaves the 6m trend at 23k, which is an acceleration from 16k in July and remains well above the 13.5k trend for labour supply over the same period, while 3m rates of employment/labour supply edged lower from July."

"However, this does ebb some of the recent momentum, and the deceleration in wage growth should help to address some of the Bank's concerns around upside risks to inflation."

"The genuine upside surprise in US payrolls and downside surprise in Canada was enough to overwhelm the temporary support from the BoC's hawkish tilt."

"We continue to see USD/CAD anchored around 1.39 near term."

"With greater uncertainty around the policy paths of other central banks than the BoC, CAD's relative appeal can start to fade with carry trades remaining the flavor of the season."

"We expect CAD to underperform its peers going forward."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• The US Dollar strengthens after US job creation significantly exceeds market expectations.
• Canada loses 41.7K jobs in August, sharply missing expectations for a 15K increase.
• USD/CAD gains nearly 80 pips following the simultaneous releases, rising 0.39% on the day.

USD/CAD accelerates sharply higher on Friday, trading around 1.3850 at the time of writing, up 0.39% on the day. The pair gains nearly 80 pips following the simultaneous release of employment reports from the United States (US) and Canada, which provide a double boost to the US Dollar (USD) against the Canadian Dollar (CAD).

US Nonfarm Payrolls (NFP) increased by 162K in August, according to data released by the Bureau of Labor Statistics (BLS) on Friday. The reading significantly exceeded market expectations for a 56K increase and followed a revised 21K gain in July.

Revisions to previous months also strengthen the US employment report. June's payroll gain was revised higher to 31K from 20K, while July's figure was upgraded to a 21K increase from a previously reported 23K decline. Overall, employment gains in June and July combined were 55K higher than previously reported.

Other components of the US employment report were more moderate. The Unemployment Rate remained unchanged at 4.1%, in line with expectations, while the Labor Force Participation Rate increased to 61.6% from 61.4%. Meanwhile, annual Average Hourly Earnings growth slowed to 3.1% in August from 3.2% in July.

Nevertheless, the significant upside surprise in payroll growth supports the Greenback. The US Dollar benefits from signs that the labor market remains more resilient than expected.

In contrast, Canada's employment report offers little support to the Loonie. The Canadian economy lost 41.7K jobs in August after creating 75.1K jobs in July, while markets had expected another 15K increase. The Unemployment Rate remained unchanged at 6.4%, as anticipated.

Annual Average Hourly Wages growth in Canada also slowed sharply to 2% in August from 3% in the previous month. The combination of job losses and slower wage growth therefore weighs on the Canadian Dollar and amplifies the USD/CAD rally following the releases.

USD/CAD technical analysis

In the one-hour chart, USD/CAD trades at 1.3852, keeping a capped near-term tone as the pair hovers around the 100-period simple moving average (SMA) at the same level while remaining below the 200-period SMA at 1.3860. The dense band of resistance just overhead, reinforced by horizontal barriers at 1.3872 and 1.3890, suggests rallies are vulnerable to selling pressure even as the Relative Strength Index (14) holds in bullish territory around 67, hinting at stretched but not yet extreme upside momentum.

On the topside, immediate resistance is the 100-period SMA pivot at 1.3852, followed by the 200-period SMA at 1.3860 and then the horizontal caps at 1.3872 and 1.3890. On the downside, initial support is seen at 1.3825, with a deeper floor at 1.3765, where a break would expose a more pronounced corrective phase despite the current momentum backdrop.

(The technical analysis of this story was written with the help of an AI tool. Know more.)