Forex News

• NZD/USD rises amid easing Treasury yields and lower crude oil prices weighing on the US Dollar.
• Markets price in a Fed pause this month following dovish remarks from New York Fed President John Williams.
• The New Zealand Dollar stays strong after China's annual CPI rose 0.9% in September, missing forecasts.

NZD/USD gains ground for the second successive day, trading around 0.5620 during European hours on Wednesday. The pair remains stronger as the US Dollar (USD) holds losses, weighed down by easing US Treasury yields and lower oil prices. The yield on the 10-year Treasury note fell for the second consecutive day to 5.194%, while the 30-year yield dropped for a fourth straight session to 5.548%, following both yields hitting multi-decade highs over the past two weeks.

Meanwhile, crude oil prices eased after US President Donald Trump announced that Taiwan will purchase 30% of gas from the Alaska LNG pipeline and invest roughly $4.4 billion, building on South Korea’s $50 billion pledge. Trump reiterated that oil prices will fall soon and predicted the Iran war will end quickly. However, traders remain cautious as escalating hostilities between Saudi Arabia and Iran-backed Houthi rebels continue to fuel fears of Middle East supply disruptions.

The Greenback faced additional pressure following dovish remarks from New York Federal Reserve President John Williams. Speaking on Tuesday, Williams noted that while one more rate hike may be appropriate this year, he foresees no further rate increases in 2027. Consequently, the CME FedWatch Tool shows markets pricing in over a 78% probability that the Fed will hold interest rates steady this month, alongside a 90% chance of a rate hike in December.

Market focus now shifts to the US September CPI inflation report scheduled for release later in the North American session, which could provide clearer guidance on the Fed's policy trajectory. Headline U.S. CPI is expected to rise 3.6% year-over-year in September, up from 3.4% in August, while Core CPI—which excludes volatile food and energy costs—is projected to edge up to 2.5% from 2.4% in the previous month.

The New Zealand Dollar (NZD) remains stronger following the release of Consumer Price Index (CPI) inflation data from China, New Zealand’s major trading partner. China's annual CPI climbed 0.9% in September, up slightly from 0.8% in August, though coming in just below the market consensus of 1.0%. On a month-over-month basis, Chinese CPI rose 0.2% in September compared to a 0.4% increase previously, trailing the expected 0.3% growth. Meanwhile, China’s Producer Price Index (PPI) surged 5.0% year-over-year in September, accelerating from August's 3.8% increase and beating market expectations of 4.5%.

Technical Analysis: NZD/USD rises above nine-day EMA

In the daily chart, NZD/USD trades at 0.5620, maintaining a bearish near-term tone as spot holds under the 50-day Exponential Moving Average (EMA). Price trades just above the nine-day EMA, hinting at minor short-term stabilization, while the 14-day Relative Strength Index (RSI) at 37.9 remains below the midline and suggests that downside momentum is softening rather than reversing.

On the topside, initial resistance appears at the 50-day EMA near 0.5731, with a more significant barrier at the horizontal level around 0.6100. On the downside, immediate support is provided by the nine-day EMA at 0.5617; a daily close below this short-term average would reopen the path for further losses, keeping the pair entrenched in its broader bearish structure.

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

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann report that GBP/USD has bounced firmly to 1.3255, invalidating their prior downside-bias call. Short-term momentum allows for further gains, but they doubt a clean break of major resistance at 1.3280 without stronger upside signals. Over the coming weeks, they expect Pound-Dollar to stay range-bound between 1.3170 and 1.3280, with another resistance level at 1.3310 if the upper band is breached.

Pound holds firm within defined range

"24-HOUR VIEW: While we indicated yesterday that GBP “could trade with a downside bias,” we held the view that “any decline is likely part of a lower range of 1.3190/1.3235.” Our view was incorrect, and we also underestimated the volatility as GBP rose sharply from 1.3205 to 1.3259. GBP closed on a firm note at 1.3255 (+0.34%). The advance has scope to extend, but with no significant increase in upward momentum, GBP may not break the major resistance at 1.3280. To sustain the momentum, GBP must hold above 1.3230, with minor support at 1.3245."

"1-3 WEEKS VIEW: On Monday (12 Oct, spot at 1.3235), we highlighted that GBP “is expected to trade in a range between 1.3170 and 1.3280.” Although short-term upward momentum has improved somewhat, we will continue to hold the same view for now. Looking ahead, should GBP break above 1.3280, it would likely encounter another firm resistance at 1.3310."

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

• Gold hovers around $4,150 as USD extends its retracement slide from an 18-month high.
• Energy-driven inflation risks lift Fed rate hike bets, cap the upside for the non-yielding bullion.
• Traders also seem hesitant ahead of the latest US inflation figures and Fed Chair Warsh’s speech.

Gold (XAU/USD) trades with a negative bias for the third straight day, touching a fresh weekly low during the first half of Wednesday’s European session. The commodity, however, remains confined in a two-week-old range as traders await the latest US inflation figures before positioning for a firm near-term direction. The US Consumer Price Index (CPI) is due for release later today, followed by the Producer Price Index (PPI) on Thursday. Moreover, US Federal Reserve (Fed) Chair Kevin Warsh's speech at the annual IMF and World Bank meetings in Bangkok on Friday will be scrutinized for cues about the future policy path. The outlook, in turn, will play a key role in driving the US Dollar (USD) and provide some meaningful impetus to the non-yielding yellow metal.

In the meantime, the CME Group's FedWatch Tool indicates that traders are assigning a nearly 90% chance that the US central bank will raise borrowing costs again at its December policy meeting. The bets were lifted by the recent hawkish comments from influential FOMC members, signaling openness to additional interest rate hikes before the end of the year amid persistent price pressures. Moreover, worries about energy-driven inflation risks underpin prospects for further Fed tightening, which might continue to act as a headwind for gold. In fact, crude oil prices rose to a nearly two-week top amid supply concerns due to escalating conflicts in the Middle East.

Fighting between the Iran-allied Houthis and Saudi Arabia has intensified over the past week in retaliation for the kingdom's support of ‌Yemeni government forces. Moreover, Houthi energy terminals and fuel reserves in Yemen were reportedly struck by a Saudi-led coalition. Meanwhile, tensions between the US and Iran also continued to simmer amid the standoff over the Strait of Hormuz. In fact, US Central Command rejected claims by the commander of Iran’s Islamic Revolutionary Guard Corps Navy that the strategic waterway is under Iran’s control and that any approaching US Navy warships would be sunk. This keeps the geopolitical risk premium firmly in play.

The USD, however, struggles to attract any meaningful buyers, trading below its highest level since April 2025, which should offer some support to gold. Nevertheless, the aforementioned bearish fundamental backdrop suggests that the path of least resistance for the XAU/USD pair remains to the downside. That said, a sustained breakout through a short-term trading range held over the past two weeks or so could shift the near-term bias in favor of bullish traders.

XAU/USD 4-hour chart

Technical Analysis

Barring last week's knee-jerk fall to a two-month low, the range-bound price action might be categorized as a bearish consolidation phase against the backdrop of a decline from the August swing high. The Gold price, however, holds just above the 78.6% Fibonacci retracement at $4,115, suggesting a tentative floor. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator stays in negative territory with a slightly contracting bearish histogram that hints at fading downside pressure. The Relative Strength Index (RSI) around 50 points to neutral momentum, reinforcing the idea of consolidation within a broader corrective phase rather than a fresh bullish leg.

Hence, any subsequent move up might continue to face stiff resistance at the 100-period Simple Moving Average (SMA) on the 4-hour chart, at $4,193. This is followed by the top boundary of the trading range, near the $4,215-$4,220 region, and the 61.8% Fibo. retracement at $4,238, with further barriers seen at $4,325, corresponding to the 50.0% retracement level. Above these, the 38.2% retracement at $4,412 and the 23.6% retracement at $4,519 mark progressively stronger supply zones. On the downside, immediate support is seen at the 78.6% retracement at $4,115, ahead of the prior cycle low area at $3,957.83. A sustained break below $4,115 would likely open the door for a deeper slide toward that lower structural base.

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

Deutsche Bank strategists highlight that the S&P 500 was marginally lower as semiconductor weakness weighed on equities. Chip and data‑center names extended their recent declines, with the Philly semiconductor index posting a fifth consecutive drop. Jim Reid’s team stresses that semiconductors represent over a sixth of the S&P 500, amplifying sector‑specific moves into the broader index.

Semiconductor slump pressures index

"As all that was going on, it wasn’t the best day for equities either, as AI concerns meant there was a fresh drag from chip stocks and data centers. While chips are just one sector, semiconductors and semiconductor equipment make up over a sixth of the S&P 500, so what happens there can easily drive the overall index."

"And that was clear once again yesterday, as the Philly semiconductor index (-0.23%) posted a 5th consecutive decline for the first time since July. So that exerted a drag on the overall S&P 500, which was just worse than unchanged (-0.02%) on the day, whilst Europe’s STOXX 600 also fell -0.10%."

"Asian equity markets are mostly trading higher this morning as semiconductor stocks rebound from the recent selloff, though rising oil prices are capping gains. Across the region, South Korea’s KOSPI (+1.13%) is leading advances, supported by a recovery in chipmakers. Japan’s Nikkei (+0.89%) is also posting solid gains, while Hong Kong’s Hang Seng (+0.16%) is modestly higher."

"In contrast, Australia’s S&P/ASX 200 (-0.66%) is under pressure, and China’s CSI 300 (-0.31%) is lagging regional peers. Meanwhile, the Shanghai Composite (+0.01%) is hovering around flat levels. S&P 500 (+0.22%), Nasdaq 100 (+0.24%) and Stoxx (+0.34%) futures are higher. "

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

• The Australian Dollar trades higher against its major currency peers.
• RBA minutes of the September meeting showed that officials are prepared for more hikes if needed.
• Investors await the US CPI data for September releasing at 12:30 GMT.

The Australian Dollar (AUD) outperforms its major currency peers on Wednesday, trading 0.3% higher at around 0.7010 against the US Dollar (USD) during the European session. The Australian currency trades higher as Reserve Bank of Australia (RBA) minutes of the September meeting showed that the central bank doesn’t hesitate to hike interest rates further this year.

Aussie support underpinned as RBA minutes flag scope for further hikes and housing risks

Analysts at MUFG note that the key release overnight was the publication of the September RBA meeting minutes, when policymakers “raised the policy rate by 0.25 point to 4.60%.” The minutes “reinforced the message from the policy meeting that the RBA is prepared to hike rates further if required even though they have already lifted the policy rate by 100bps this year.”

At the same time, MUFG points out that “RBA officials displayed concern that the Australian Dollar could weaken going forward if overseas central banks played catch up by increasingly moving to raise rates which could add to upside risks in Australia.” The minutes also underline domestic vulnerabilities, with the RBA “wary of the risk that falling house prices could have a larger effect on household spending than assumed which could strength the case for keeping rates on hold in Australia.”

This week, the major trigger for the Australian Dollar will be the employment data on Thursday. The data is expected to show that the economy created 20K fresh jobs in September, lower than 39.5K in August. The Unemployment Rate is seen remaining steady at 4.6%.

Meanwhile, weakness in the US Dollar ahead of the United States (US) Consumer Price Index (CPI) data for September has also strengthened the Aussie pair.

According to estimates, the US headline inflation accelerated to 3.6% Year-on-Year (YoY) from 3.4% in August. The core CPI – which excludes volatile food and energy items – arrives at 2.5% YoY, higher than the previous reading of 2.4%.

AUD/USD Technical Analysis

In the daily chart, AUD/USD trades at 0.7007. The pair has extended its recovery to near the 20-day Exponential Moving Average (EMA) at 0.7011. The pair has slipped back under this short-term trend gauge, suggesting rallies remain capped despite the Relative Strength Index (RSI) recovering toward a neutral 46 zone, which hints at moderating but still fragile downside momentum rather than a sustained bullish turn.

On the topside, immediate resistance is located at the 20-day EMA around 0.7011, where any recovery is likely to face initial supply and define the barrier that bulls must reclaim to alleviate the current pressure. On the downsie, the October 13 low at 0.6987 is the key support level. Below 0.6987, the October 1 low at 0.6904 would act as major support zone.

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

• Bank Indonesia’s continuous FX interventions across spot and NDF markets actively restrict upside gains for the USD/IDR pair.
• New York Fed President John Williams signals no rate hikes for 2027.
• Traders await crucial September CPI reports to gauge due later in the day.

USD/IDR holds ground after posting modest losses the previous day, trading around 17,930 during European hours on Wednesday. The upside for the pair remains limited as the Indonesian Rupiah (IDR) may gain support from Bank Indonesia's (BI) ongoing interventions across the spot, domestic non-deliverable forward (DNDF), and offshore NDF markets.

Moreover, the US Dollar (USD) struggles following dovish remarks from New York Federal Reserve President John Williams. Speaking on Tuesday, Williams noted that while he maintains his view that one more rate hike may be appropriate this year, he does not foresee additional rate increases in 2027. In response, the CME FedWatch Tool suggests markets are currently pricing in roughly a 77% probability that the Fed will leave interest rates unchanged this month, alongside an 88% chance of a rate hike in December.

Market focus now shifts to the US September CPI inflation data scheduled for release later in the North American session, which could offer clearer direction on the Federal Reserve’s monetary policy path. Headline U.S. CPI is expected to show a year-over-year rise of 3.6% in September, up from 3.4% in August. Meanwhile, Core CPI—which excludes volatile items—is projected to tick up to 2.5% year-over-year from 2.4% in the previous month.

Fed’s Collins keeps a hawkish tilt as inflation risks stay in focus

Fed’s Collins’ speech scores 7.1/10 on the FXS Speechtracker, modestly above the 6.7/10 historical average, signaling a slightly stronger hawkish tone relative to the historical average. Emphasis on an “elevated risk of high inflation,” expectations for inflation to remain above 2% amid high energy prices, and support for the September rate hike underscore a data-dependent but clearly inflation-focused stance, even as the job market is described as broadly balanced and resilient. References to ongoing growth, job market stability, and data-center build-out pressures on inflation reinforce a narrative of an economy robust enough to withstand tighter policy, which is typically supportive of the Dollar.

The FXS Fed Sentiment Index fell by 2.23 points to 131.63, indicating a modest pullback in perceived hawkishness despite remaining firmly above the neutral 100 threshold. This configuration suggests that while the overall Fed tone stays in hawkish territory, the incremental shift in sentiment is slightly less aggressive than prior readings, aligning with Collins’ data-dependent framing rather than signaling a clear pivot toward dovishness.

• EUR/USD holds just above 1.1200 after bouncing from 17-month lows near 1.1150 earlier this week.
• The Euro recovery is more due to US Dollar weakness ahead of the release of US inflation data than to EUR strength.
• High Oil prices and ongoing concerns about France's fiscal stability are acting as headwinds for Euro rallies.

The Euro (EUR) is showing a frail recovery against the US Dollar (USD) on Tuesday, due more to the Greenback’s weakness ahead of the release of the US inflation data than to any noticeable Euro strength. The EUR/USD pair hovers just above 1.1200, after bouncing from 17-month lows near 1.1150 earlier in the week, although it maintains its broader bearish structure intact.

The US Dollar is trimming recent gains against its main rivals on Wednesday, as investors brace for the release of September’s US Consumer Price Index (CPI) figures. Consumer inflation is expected to have accelerated to a 3.6% year-over-year (Y-o-Y) growth from 3.4% in August, with core inflation showing a more moderate uptick to 2.5% from 2.4% in the previous month.

Fed tightening expectations are the main driver for the US Dollar

Apart from that, the Federal Reserve’s (Fed) Vice Chair of Supervision, Michelle Bowman, is due to speak at the IMF Annual Summit in Bangkok and might provide further clues about the central bank’s monetary policy. On Tuesday, the influential New York Fed President, John Williams, played down market speculation about further interest rate hikes in 2027, putting additional pressure on the US Dollar.

The common currency, on the other hand, faces serious headwinds, namely the high Oil prices and the ongoing concerns about France, which so far are capping any recovery attempt. European Central Bank (ECB) President Christine Lagarde urged the French government to consolidate its fiscal policy and discarded any intervention in bond markets to alleviate pressure on French debt.

Eurozone data released on Wednesday added to evidence of the inflationary impact of high energy prices, keeping pressure on the ECB to tighten its monetary policy further. German Wholesale Price Index accelerated to 1.9% in September from 0.9% in August, against expectations of a moderate slowdown to 0.7%. In Spain, the Harmonised Index of Consumer Prices (HICP) has grown at a 0.6% pace in September and 5% year-on-year, unchanged from the previous month. The impact of these releases on the Euro has been marginal.

Commerzbank’s Volkmar Baur notes EUR/USD briefly dipped to 1.115 before recovering above 1.12 as French bond yields stabilized and sentiment improved following the IMF’s World Economic Outlook. He stresses that for EUR/USD today, US September CPI will overshadow structural issues, with elevated market expectations meaning a downside surprise could ease Federal Reserve pressure and support the Euro.

Euro focus shifts to US CPI

"During the night into Tuesday, EUR/USD temporarily fell as low as 1.115, but the exchange rate managed to recover somewhat over the course of yesterday’s session and is back above 1.12 this morning."

"For EUR/USD today, however, structural developments are likely to take a back seat to the concrete US inflation numbers for September."

"The market expects prices to rise sharply by 0.6% month-on-month, which would push the annual inflation rate up to 3.6%. Much of this is once again attributable to higher energy prices. However, the expected increase in core inflation from 2.4% to 2.5% also shows that the story does not end with diesel prices."

"The good news for the euro is that market expectations are already fairly elevated, with US headline inflation forecast at 0.6% month-on-month."

"A modest downside surprise could therefore take some pressure off the Fed and the bond market and, in turn, provide some support for the euro."

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

• DXY attracts sellers for the second straight day amid the recent pullback in US bond yields.
• Hawkish Fed expectations and geopolitical uncertainties limit losses for the safe-haven USD.
• The technical setup further warrants caution for bears as focus remains on the US CPI report.

The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, drifts lower for the second straight day on Wednesday, retreating further from its highest level since April 2025, touched on the first day of this week. The index, however, holds above the 102.00 mark through the early European session as traders keenly await the release of the US Consumer Price Index (CPI) report, due later today.

Apart from this, the US Producer Price Index (PPI) on Thursday and US Federal Reserve (Fed) Chair Kevin Warsh's speech on Friday will be looked to for more cues about the future policy outlook, which, in turn, will influence the near-term DXY price dynamics. Heading into the key data/event risks, the recent pullback in US bond yields prompts traders to lighten their bullish bets following a strong rally from the September monthly swing low.

However, the growing acceptance that the US central bank will raise borrowing costs again in December, along with geopolitical uncertainties stemming from escalating conflicts in the Middle East, helps limit the downside for the safe-haven US Dollar (USD). This makes it prudent to wait for strong follow-through selling before confirming that the DXY has topped out in the near-term and positioning for any meaningful corrective decline.

From a technical perspective, the index holds a bullish near-term bias above the 101.65-101.70 horizontal resistance breakpoint. Moreover, the Moving Average Convergence Divergence (MACD) indicator remains in positive ground with a modest reading of 0.02, suggesting that upward momentum is still present. Meanwhile, the Relative Strength Index (RSI) at 64.81 stays in positive territory but remains shy of extreme overbought conditions.

Hence, any further weakness below the 102.00 mark is more likely to attract fresh buyers near the 101.70-101.65 resistance-turned-support. A daily close back under it would hint at a deeper corrective phase as momentum indicators retreat from elevated levels and lose some intensity compared with prior sessions. Meanwhile, a sustained hold above this zone keeps buyers in control, warranting some caution for aggressive bearish traders.

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

DXY daily chart

MUFG’s Michael Wan explains that recent RBI FX measures have supported spot Indian Rupee, while temporarily disrupting derivatives liquidity. Offshore INR forward premiums fell sharply after restrictions on non-resident NDF access and higher hedge costs. These actions reduced speculative Dollar demand and helped INR rally, though at the expense of wider bid-ask spreads and less liquid onshore forwards.

FX measures tighten INR hedging

"The RBI’s latest FX measures have supported spot INR to the 95.2 level but added some costs to rupee derivatives liquidity."

"Reuters reported that USD/INR forward quotes were temporarily withdrawn amid uncertainty over whether the 20% cash-margin requirement covered interbank trades, although the RBI subsequently indicated that it did not."

"Until formal clarification is issued, cautious market-making could widen bid-ask spreads, raise hedging costs and shift activity offshore."

"We note that offshore INR forward premiums fell sharply across all tenors between 12 and 13 October. The broad-based move suggests that offshore demand for INR downside protection was rapidly unwound after the RBI restricted non-resident NDF access to genuine hedging, raised the cost of FX hedges and provided state oil companies with a dedicated dollar window."

"Together, these measures reduced speculative NDF demand and spot dollar buying, helping INR rally by around 1.5%, albeit at the cost of higher hedging expenses and less liquid onshore forward markets."

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