Forex News
- USD/JPY flattens at around 156.00 at the start of the week.
- The JPY outperformed last week after hawkish remarks from BoJ’s Takata.
- Investors keenly await the US CPI data for August.
The Japanese Yen (JPY) trades flat against the US Dollar (USD) at around 156.00 at the start of the week, but is close to its four-month low of 155.23. The pair is broadly firm due to JPY’s last week's outperformance, which came on the back of hawkish commentary from Bank of Japan’s (BoJ) board member Hajime Takata.
Yen surge raises questions over BoJ intervention and rate path
Analysts at MUFG highlight that there were “significant moves in the FX market, with the Japanese yen in particular strengthening sharply from the 160 level on 2 Sep all the way down to as low as 155.30 overnight, a 5 big figure move.” They note that it came more broadly on the policy backdrop, flagging that “BoJ Board Member Takata – one of BOJ’s most hawkish members – gave a speech earlier this week leaving the door open for an outsized interest rate increase as well as back-to-back hikes,” reinforcing market speculation that the BoJ could countenance a more aggressive tightening path if conditions warrant.
MUFG also flagged a weak US Dollar as another trigger for significant weakness in the US Dollar, and ruled out the possibility of BoJ’s intervention. “It is not entirely clear whether the moves in USD/JPY were driven by FX intervention,” although “BoJ current account data for Wednesday do not suggest the moves were driven by intervention,” pointing instead to broader Dollar weakness and regional FX gains as key drivers, MUFG said.
Meanwhile, investors await the United States (US) Consumer Price Index (CPI) data for August, which will be published on Friday. The US inflation data is expected to have a significant impact on the Federal Reserve’s (Fed) interest rate expectations.
USD/JPY Technical Analysis
In the daily chart, USD/JPY trades at 155.95, keeping a bearish near-term bias as spot holds well below the 100-day Simple Moving Average (SMA) at 159.92. The distance to this SMA suggests the broader uptrend framework remains above price, with sellers in control for now.
The Relative Strength Index (RSI) at about 32 hovers just above oversold territory, hinting that downside momentum is stretched but not yet signaling a confirmed reversal.
On the topside, the 100-day SMA at 159.92 is the first meaningful resistance that bulls would need to reclaim to ease the current downside pressure and reopen a path toward higher levels. Looking down, the four-month low at 155.25 is the key support zone; below that, the pair could face a fresh downside leg.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Bank of Japan FAQs
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
- South Korea's KOSPI jumped over 4% past 6,950, driven by chipmakers like Samsung Electronics and SK Hynix.
- Japan's Nikkei 225 climbed 1.85% above 66,200 as tech shares gained despite Bank of Japan rate hike fears.
- Chinese markets split as the Shanghai Composite fell 0.24% while the Shenzhen Component jumped over 2%.
Asian stocks were mixed with a positive bias on Monday, driven by optimism that a new OpenAI model will spur demand for memory chips. This momentum followed Friday's rally among US semiconductor and memory stocks as broader sentiment toward the sector improved.
South Korea’s benchmark KOSPI climbed over 4% to top 6,950, surging for a third consecutive day with gains in Samsung Electronics, SK Hynix, SK Square, and Hyundai Motor. The rally was backed by robust economic fundamentals, as South Korea’s exports reached a record $709.4 billion year-to-date, surpassing its 2025 total, led by a 169.6% jump in semiconductor exports from January to August.
Japan’s Nikkei 225 jumped 1.85% above 66,200, while the Topix rose 0.48% past 4,100, extending gains for a second day behind tech heavyweights like Kioxia Holdings and SoftBank Group. However, sentiment remains cautious as traders price in a potential September rate hike by the Bank of Japan to combat sticky inflation and currency weakness.
Chinese markets presented a split picture as the Shanghai Composite dipped 0.24% toward 3,920, while the Shenzhen Component jumped over 2% above 13,800. To bolster credit growth and shore up balance sheets, China announced a CNY 300 billion ($45 billion) injection into its largest financial institutions, marking its biggest sector recapitalization in nearly two decades. Meanwhile, Hong Kong’s Hang Seng Index fell roughly 1% to near 25,400, dragged down by financial, technology, and energy shares.
However, broader markets remained cautious after strong US jobs data reinforced expectations of a Federal Reserve rate hike this month. August Nonfarm Payrolls rose by 162,000, significantly outperforming the 56,000 forecast. Meanwhile, the unemployment rate held steady at 4.1%, and annual wage growth slowed less than anticipated to 3.1%. Following these figures, traders rapidly priced in tighter monetary policy, with the CME FedWatch tool indicating a 58.3% probability of a 25-basis-point Fed rate increase in September.
Traders also adopt caution as rising crude oil prices have stoked fears of rekindled inflationary pressures following a geopolitical escalation between the US and Iran over the weekend. The conflict intensified after the US targeted three Iranian tankers in response to missile attacks on its warships, leading Tehran to establish a new restricted zone around the Strait of Hormuz.
Asian stocks FAQs
Asia contributes around 70% of global economic growth and hosts several key stock market indices. Among the region’s developed economies, the Japanese Nikkei – which represents 225 companies on the Tokyo stock exchange – and the South Korean Kospi stand out. China has three important indices: the Hong Kong Hang Seng, the Shanghai Composite and the Shenzhen Composite. As a big emerging economy, Indian equities are also catching the attention of investors, who increasingly invest in companies in the Sensex and Nifty indices.
Asia’s main economies are different, and each has specific sectors to pay attention to. Technology companies dominate in indices in Japan, South Korea, and increasingly, China. Financial services are leading stock markets such as Hong Kong or Singapore, considered key hubs for the sector. Manufacturing is also big in China and Japan, with a strong focus on automobile production or electronics. The growing middle class in countries like China and India is also giving more and more prominence to companies focused on retail and e-commerce.
Many different factors drive Asian stock market indices, but the main factor behind their performance is the aggregate results of the component companies revealed in their quarterly and annual earnings reports. The economic fundamentals of each country, as well as their central bank decisions or their government’s fiscal policies, are also important factors. More broadly, political stability, technological progress or the rule of law can also impact equity markets. The performance of US equity indices is also a factor as, more often than not, Asian markets take the lead from Wall Street stocks overnight. Finally, the broader risk sentiment in markets also plays a role as equities are considered a risky investment compared to other investment options such as fixed-income securities.
Investing in equities is risky by itself, but investing in Asian stocks comes along with region-specific risks to be taken into account. Asian countries have a wide range of political systems, from full democracies to dictatorships, so their political stability, transparency, rule of law or corporate governance requirements may diverge considerably. Geopolitical events such as trade disputes or territorial conflicts can lead to volatility in stock markets, as can natural disasters. Moreover, currency fluctuations can also have an impact on the valuation of Asian stock markets. This is particularly true in export-oriented economies, which tend to suffer from a stronger currency and benefit from a weaker one as their products become cheaper abroad.
- WTI attracts fresh buyers on Monday as US-Iran tensions keep the geopolitical risk premium in play.
- Confrontations in the Strait of Hormuz fuel supply concerns and also lend support to the commodity.
- The technical setup favors bullish traders and backs the case for a further near-term appreciation.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – kicks off the new week on a positive note amid escalating US-Iran confrontations in the Strait of Hormuz and climbs back above mid-$90.00s during the Asian session. The commodity is now trading within striking distance of its highest level since July 24, touched last Thursday, and seems poised to appreciate further.
In the latest developments surrounding the Middle East crisis, US forces struck three Iranian oil tankers on Saturday, while Iran's Islamic Revolutionary Guard Corps said it had targeted six vessels in retaliation. The tit-for-tat attacks have added to concerns over the security of shipping through the strategic waterway and intensified fears of a prolonged disruption to supplies from the region. This, in turn, validates the near-term positive outlook for crude oil prices.
From a technical perspective, WTI maintains a bullish bias above the 100-day Simple Moving Average (SMA) at roughly $85.21 and the 50% Fibonacci retracement of the April-July decline. Moreover, momentum indicators align with this upward stance, with the Relative Strength Index (14) hovering near 64 and the Moving Average Convergence Divergence (MACD) histogram expanding in positive territory, suggesting buyers retain control in the near term.
On the topside, immediate resistance emerges at the 61.8% Fibo. retracement near $91.73, with further barriers seen at the 78.6% level around $98.48 and then the recent swing high zone near $107.07. On the downside, initial support is reinforced by the 50% retracement at $86.99 and the 100-day SMA, ahead of a deeper Fibonacci floor near $82.26. As long as oil prices hold above this support band, pullbacks are likely to be viewed as corrective within the prevailing uptrend.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
WTI daily chart
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.
- USD/CAD flatlines around 1.3835 in Monday’s early European session.
- Stronger-than-expected US August NFP boosts the chance the Fed will hike rates this month.
- Canada lost 41,700 jobs in August; Unemployment Rate held steady.
The USD/CAD pair trades on a flat note near 1.3835 during the early European session on Monday. The pair steadies as stronger-than-expected US jobs data offsets rising crude oil prices. US markets will be closed on Monday for Labour Day.
The US Nonfarm Payrolls (NFP) added 162,000 jobs in August, beating expectations, while the Unemployment Rate held steady during the same period, the US Bureau of Labor Statistics (BLS) showed on Friday.
Market expectations for a Federal Reserve (Fed) rate hike at the September policy meeting have surged dramatically following the US jobs data. Fed funds futures are now pricing in roughly a 60% probability of a hike, according to the CME FedWatch tool.
On the other hand, Canada's economy lost 41,700 jobs in August, Statistics Canada revealed. Meanwhile, the Unemployment Rate in Canada remained unchanged at 6.4%.
"The sharp 41,700 fall in employment in August and further slowdown in wage growth pushes back against the idea that the economy has decisively turned a corner," said Thomas Ryan, senior North American economist at Capital Economics.
Escalating geopolitical risk in the Middle East could boost crude oil prices and support the commodity-linked Canadian Dollar (CAD). Iran said that it had struck three oil tankers and multiple US-linked ships in the Strait of Hormuz in retaliation for US attacks on its vessels.
Canadian Dollar steadies as markets await US jobs data
Analysts at Scotiabank highlight that the immediate direction for the Canadian Dollar will hinge on the upcoming US labour market release, noting that “the US jobs numbers will largely dictate price action around the 8.30ET release.” They add that, “assuming data are broadly in line with expectations, the CAD may nudge a little firmer,” suggesting scope for a modest Canadian Dollar bid if the figures do not deliver a significant surprise.
Technical Analysis: USD/CAD remains bearish below the 100-day SMA
In the daily chart, USD/CAD keeps a mild bearish near-term bias as it holds under the 20-day Bollinger simple moving average and the upper band. Price action has retreated from recent highs toward the lower half of the recent volatility envelope, while the Relative Strength Index (14) around 43 stays below the neutral 50 line, suggesting sellers retain the upper hand despite only moderate downside momentum.
On the topside, initial resistance emerges at the 20-day Bollinger middle band around 1.3860, with the upper band near 1.3950 acting as the next cap if buyers attempt a recovery. On the downside, support is seen at the 100-day moving average near 1.3925 only in a broader context but, closer to current trading, the lower Bollinger band around 1.3760 represents the key floor; a daily close below that zone would open the door to a deeper pullback within the broader range.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
- GBP/USD remains depressed for the second straight day as USD preserves upbeat NFP-led gains.
- Escalating US-Iran tensions further benefit the safe-haven USD and exert pressure on spot prices.
- The mixed technical setup warrants caution for aggressive traders before placing directional bets.
The GBP/USD pair trades with a negative bias for the second straight day, though it lacks bearish conviction and trades around the 1.3500 psychological mark during the Asian session on Monday. Moreover, spot prices hold above Friday's swing low, warranting some caution for bearish traders.
The US Dollar (USD) draws support from rising bets for an interest rate hike by the US Federal Reserve (Fed) in September amid inflation risks stemming from higher energy prices. Adding to this, escalating US-Iran confrontations in the Strait of Hormuz act as a tailwind for the safe-haven buck and weigh on the GBP/USD pair. USD bulls, however, seem hesitant and opt to wait for US inflation figures, due later this week, for more cues about the Fed's policy path.
Traders will further confront the release of the monthly UK GDP report on Friday for a fresh impetus. In the meantime, relatively thin trading volumes due to the Labor Day holiday in the US hold back traders from placing aggressive bets and might continue to lend support to the GBP/USD pair. Hence, it will be prudent to wait for strong follow-through selling before positioning for an extension of the recent pullback from a six-month peak, touched in August.
From a technical perspective, the GBP/USD pair holds above the 50-day Simple Moving Average (SMA) at 1.3460 and the 38.2% Fibonacci retracement of the June-August rise. Meanwhile, the Relative Strength Index (RSI) at 48.7 hovers around neutral, and the Moving Average Convergence Divergence (MACD) line remains slightly negative. This hints that the upside momentum is modest even as the GBP/USD pair consolidates above these underlying supports.
On the downside, initial support emerges in the 1.3470–1.3460 band defined by the 38.2% retracement and the 50-day SMA, with further cushions at the 50.0% retracement near 1.3407 and deeper Fibonacci levels at 1.3345, 1.3255 and 1.3141. On the topside, the 23.6% Fibo. retracement at 1.3548 is the first resistance to clear, ahead of the cycle high anchor around 1.3673, a break of which would reopen a stronger bullish extension.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
GBP/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 New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.03% | 0.05% | -0.09% | 0.00% | 0.00% | 0.13% | 0.08% | |
| EUR | -0.03% | 0.02% | -0.15% | -0.06% | -0.03% | 0.08% | 0.05% | |
| GBP | -0.05% | -0.02% | -0.15% | -0.08% | -0.04% | 0.07% | 0.03% | |
| JPY | 0.09% | 0.15% | 0.15% | 0.12% | 0.13% | 0.25% | 0.23% | |
| CAD | -0.01% | 0.06% | 0.08% | -0.12% | -0.00% | 0.11% | 0.07% | |
| AUD | -0.01% | 0.03% | 0.04% | -0.13% | 0.00% | 0.12% | 0.06% | |
| NZD | -0.13% | -0.08% | -0.07% | -0.25% | -0.11% | -0.12% | -0.04% | |
| CHF | -0.08% | -0.05% | -0.03% | -0.23% | -0.07% | -0.06% | 0.04% |
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).
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