Forex News
- Australian Dollar rises to near 0.6980 against the US Dollar amid a pullback in US bond yields.
- Market experts see this correction in US bond yields as temporary.
- The Fed is almost certain to deliver one more interest rate hike this year.
The Australian Dollar (AUD) is up 0.3% at around 0.6980 against the US Dollar (USD) during the European trading session on Friday. However, the pair is struggling to extend gains beyond 0.6990.
The Australian currency has been an outperformer on Friday as market sentiment remains risk-on due to a pullback in United States (US) Treasury Yields.
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.03% | -0.02% | 0.27% | 0.09% | -0.27% | -0.11% | -0.13% | |
| EUR | -0.03% | -0.04% | 0.25% | 0.05% | -0.29% | -0.10% | -0.17% | |
| GBP | 0.02% | 0.04% | 0.29% | 0.12% | -0.24% | -0.06% | -0.07% | |
| JPY | -0.27% | -0.25% | -0.29% | -0.18% | -0.54% | -0.37% | -0.38% | |
| CAD | -0.09% | -0.05% | -0.12% | 0.18% | -0.38% | -0.20% | -0.20% | |
| AUD | 0.27% | 0.29% | 0.24% | 0.54% | 0.38% | 0.18% | 0.19% | |
| NZD | 0.11% | 0.10% | 0.06% | 0.37% | 0.20% | -0.18% | -0.00% | |
| CHF | 0.13% | 0.17% | 0.07% | 0.38% | 0.20% | -0.19% | 0.00% |
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 Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
As of writing, S&P 500 futures are up 0.33% to near 7,800, reflecting string market mood. 10-year US bond yields are 0.42% higher to near 5.26%, but have corrected after failing extend the rally beyond 5.36%.
What is capping AUD’s upside?
The antipodean struggles to gain further as market experts see US bond Yields resuming the broader trend, with geopolitical tensions remaining intact.
Strategists at ING said in a note that Treasuries took a breather, but they stress that they "don’t see signs of a broader correction brewing." They highlight the geopolitical backdrop, noting that while US President Donald Trump has indicated the US "won’t attack Iran before the 3 November midterms," the oil market "is reluctant to price out the geopolitical premium that has kept prices above $100/bbl despite improved Gulf supply."
Going forward, the major trigger for US bond yields will be the US Consumer Price Index (CPI) data for September, which will be released on Wednesday. The data is expected to drive Federal Reserve’s (Fed) interest rate expectations significantly.
Currently, market participants are confident that the Fed will deliver one more interest rate hike this year.
AUD/USD Technical Analysis
In the daily chart, AUD/USD trades at 0.6978, keeping a bearish near-term tone as spot holds beneath the 20-period exponential moving average (EMA) at 0.7019. The pair has slipped below this short-term trend gauge, suggesting that rebounds are likely to be capped while downside pressure persists, with the Relative Strength Index (RSI) near 39 hinting at weak but not oversold momentum.
On the topside, initial resistance is located at the 20-day EMA around 0.7019, and a sustained break above this barrier would be needed to ease the prevailing downside bias. With no nearby technical supports highlighted by the current dataset, price action remains vulnerable to further slippage as long as AUD/USD trades under the EMA, leaving the bears in control of the short-term outlook.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
- Gold hits session highs above $4,200 after bouncing from $4,066 lows earlier this week.
- Lower US Treasury yields are weighing on the US Dollar and providing support for precious metals.
- Hawkish comments by Fed officials are keeping US Dollar's dips limited so far.
Gold (XAU/USD) accelerates its recovery on Friday, favoured by a softer US Dollar, amid a moderate pullback in US yields. The XAU/USD pair has reached session highs just above $4,200 during the European session, from two-month lows at $4,066 on Wednesday, before easing to the $4,183 area at the time of writing.
US Treasury yields retreated on Thursday following the solid demand witnessed in a US 30-year Treasury bond auction. Investors’ willingness to buy US Government bonds despite the ballooning debt has calmed markets, flattening the US yield curve, and triggering a mild risk appetite that is hurting the safe-haven US Dollar.
Oil prices, however, remain at high levels, with the barrel of Brent crude still above the $100 level, pushing inflation higher, and urging central banks to tighten their borrowing costs. St. Louis Fed President Alberto Musalem endorsed this view earlier on Friday, affirming that “more monetary policy will be needed” to bring inflation to the 2% target, comments that are likely to limit US Dollar dips.
Technical Analysis: XAU/USD pierces the downtrend resistance from August's highs
XAU/USD trades at $4,187.01, holding an immediate bullish bias as it stands above the reclaimed downtrend resistance from August highs, although it is still testing the resistance area around $4,200, which has held bulls since late October.
Momentum supports the constructive tone, with the 4-hour Relative Strength Index (14) hovering near 60 and Moving Average Convergence Divergence (MACD) extending further into positive territory.
Gold bulls are likely to meet significant resistance between $4,190 and a support area, now turned resistance around $4, 240. A confirmation above this area would boost hopes of a deeper correction and bring the September 25 highs, at the $4,300 area, into play.
On the downside, first support is provided by the former trend-line break level around $4,170, before the mentioned two-month low, near $4,070. Further down, the $4,000 psychological area would come into focus.
(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.
United Overseas Bank (UOB) analysts Quek Ser Leang and Lee Sue Ann note that USD/CHF shows slightly increased downside momentum, with scope to test 0.8290 but limited odds of a sustained break lower. For the coming days, they maintain that USD/CHF has likely entered a range-trading phase between 0.8245 and 0.8365, while over the 1–3 month horizon they see the pair continuing to rebound but lacking strength to revisit the July peak.
Downside test within broader range
"24-HOUR VIEW: We stated yesterday that Wednesday’s “price action provides no fresh clues,” and we indicated that USD “could trade between 0.8310 and 0.8345.” USD then rose to 0.8346, dropped sharply to 0.8305 before settling at 0.8314 (-0.20%). The slight increase in downward momentum could lead to USD testing 0.8290. A continued decline below this level is unlikely. On the upside, resistance is at 0.8325, followed by 0.8345."
"1-3 WEEKS VIEW: In our most recent narrative from last Friday (02 Oct, spot at 0.8310), we highlighted that USD “has likely entered a range-trading phase between 0.8245 and 0.8365.” Although USD traded in a relatively quiet manner over the past couple of days, we will maintain our view for now."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
MUFG's Derek Halpenny highlights Europe's economic resilience following Germany's upward Gross Domestic Product (GDP) growth revisions but warns that potential European Union (EU) import restrictions and additional tariffs on Chinese goods could escalate trade tensions and weigh on the Euro (EUR). Meanwhile, continued Chinese Yuan (CNY) strength could put further downward pressure on EUR/CNY.
Euro steadies as China tensions grow
"Still, we continue to see evidence of economic resilience in Europe that could help stabilise the euro at these lower levels. The Economy Ministry in Germany yesterday revised up its GDP growth projection from 0.5% and 0.9% for this year and next to 1.3% and 1.1% respectively. Growth had been downgraded in response to the war but the new estimate for this year is above the 1.0% estimate at the start of the year underlining the level of resilience."
"There has been speculation that Europe is soon to respond with agreeing to a more flexible trade policy mechanism that would allow for easier implementation to counter against huge imports to Europe from China. An import cap could be agreed as well as additional tariffs that could see trade tensions rise and prompt retaliation from China. These talks could be the final opportunity to avoid increased tensions."
"An escalation into grater trade conflict could be another EUR negative factor."
"This mounting pressure looks to be encouraging China too allow renewed gains. Recent PBoC fixing in USD/CNY indicate a desire to keep CNY on a strengthening path despite the broader gains for the dollar. EUR/CNY is 10% lower from the January high and we see near-term scope for further declines."
"The continued CNY strength is helping isolate Asian currencies from the broader dollar gain. While the DXY has advanced 3.3% from the September low, the dollar against a basket of Asia FX is just 0.7% higher."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Societe Generale strategists note the National Bank of Romania (NBR) kept its policy rate at 6.50% and reinforced a hawkish stance as earlier inflation risks are now part of the baseline. Political conditions improved after PM-designate Luca Niculescu secured conditional backing from the Social Democrats, boosting hopes of a broad coalition. This optimism pushed EUR/RON below 5.35 and 10-year RONGB yields under 7.10%.
NBR hawkish and politics turn supportive
"In Romania, the NBR kept the policy rate on hold at 6.50% and reinforced its hawkish stance."
"Risks flagged in August (higher commodity prices, drought-related food inflation and RON depreciation) are now embedded in the baseline."
"The political outlook also improved after PM-designate Luca Niculescu received conditional backing from the Social Democrats, parliament’s largest party."
"Prospects of a return to a broad coalition with the Liberals and ethnic Hungarian party raised hopes of ending the deadlock weighing on fiscal consolidation and threatening the country’s IG rating."
"Optimism pushed EUR/RON below 5.35 and the 10y RONGB yield below 7.10%."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Silver prices (XAG/USD) rose on Friday, according to FXStreet data. Silver trades at $60.40 per troy ounce, up 2.06% from the $59.19 it cost on Thursday.
Silver prices have decreased by 15.02% since the beginning of the year.
Unit measure | Silver Price Today in USD |
|---|---|
Troy Ounce | 60.40 |
1 Gram | 1.94 |
The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 69.36 on Friday, down from 69.83 on Thursday.
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
(An automation tool was used in creating this post.)
Tatha Ghose at Commerzbank describes NBP Governor Glapinski’s latest press conference as a net dovish surprise versus expectations for a clearer hike signal. Although he outlined conditions for tightening and dropped guidance of unchanged rates until mid-2027, he does not expect those conditions to be met by November. The Zloty weakened versus the Hungarian Forint as markets had been pricing a November hike baseline.
NBP signals conditional hikes, dampens November expectations
"Further to our last comment, in which we suggested that NBP governor Adam Glapinski might officially signal at this week’s press conference that rate hikes were on the cards, by contrast yesterday’s press conference produced a ‘net’ dovish surprise."
"Glapinski mentioned that NBP was ready to act if 1) second-round effects were to emerge or 2) November’s projections were to reveal a strong inflationary scenario."
"He also declined to repeat his September guidance that rates would probably remain unchanged until mid-2027, confirming that his stance had, indeed, changed to more hawkish."
"The crucial qualification was that Glapinski does not expect the conditions for a hike to be in place by November already."
"The zloty weakened against peers such as the Hungarian forint after the statements. This reaction was justified because the market’s baseline was fast becoming one of confirmed November rate hike."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
ING’s Francesco Pesole expects Canada’s September jobs report to show a modest payroll rebound and slightly higher unemployment, not enough to justify an October Bank of Canada hike. He notes that a December move is fully priced, while USD/CAD remains dominated by the Dollar, with a sustained move below 1.420 seen as requiring better global bond conditions.
Limited CAD support from labour data
"Today, the Canadian jobs report for September is expected to show a partial rebound. Consensus sees payrolls at +10k after August’s 42k contraction, and unemployment ticking higher to 6.5%."
"The figures shouldn’t scream ‘October hike’, but can definitely consolidate expectations for a move by the Bank of Canada in December, which is fully priced in."
"The impact on the Canadian dollar shouldn’t be big. CAD has lost around 3% in the past month against USD, but is still in the upper half of the G10 scorecard. US-Canada tensions have been put on the back burner by FX investors, and the USD remains totally dominant in USD/CAD."
"Improvement in global bond markets remains necessary for the pair to return sustainably below 1.420. The prospect of a Bank of Canada hike can lend some help only on the margin."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- Euro recovers further to near 1.1235 against the US Dollar amid a pullback in French bond yields.
- The US Dollar corrects as US Treasury Yields cool down after a strong rally.
- Investors shift their focus to the US CPI data for September.
The Euro (EUR) extends Thursday’s recovery move against the US Dollar (USD) on Friday. In the European trade, the EUR/USD pair is up 0.2% higher to near 1.1235. The Euro rebounds as yields offered on France bonds have corrected sharply.
10-year French bonds yields have overall corrected almost 3.4% or 17 basis points (bps) to 4.8% from its Thursday’s high.
The Euro had been an underperformer in the past few weeks due to widening difference between yields offered on French bonds compared to the rest of Eurozone. However, market experts believe that French fiscal risks are intact and the recovery move could prove to be short-lived.
Euro Price This week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the weakest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.36% | 0.02% | 0.19% | -0.21% | -0.37% | 0.11% | 0.31% | |
| EUR | -0.36% | -0.34% | -0.09% | -0.55% | -0.73% | -0.26% | -0.02% | |
| GBP | -0.02% | 0.34% | 0.25% | -0.20% | -0.39% | 0.09% | 0.30% | |
| JPY | -0.19% | 0.09% | -0.25% | -0.39% | -0.47% | -0.04% | 0.14% | |
| CAD | 0.21% | 0.55% | 0.20% | 0.39% | -0.11% | 0.23% | 0.51% | |
| AUD | 0.37% | 0.73% | 0.39% | 0.47% | 0.11% | 0.49% | 0.69% | |
| NZD | -0.11% | 0.26% | -0.09% | 0.04% | -0.23% | -0.49% | 0.20% | |
| CHF | -0.31% | 0.02% | -0.30% | -0.14% | -0.51% | -0.69% | -0.20% |
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).
Euro sentiment stays fragile as French risks linger
Analysts at ING caution that the recent reprieve for the Euro may prove short-lived, as France’s political and fiscal backdrop continues to weigh on sentiment. They argue that “we don’t feel Marine Le Pen’s huge fiscal tightening promise is enough to turn the tide for French bonds,” adding that “the euro may keep suffering from the French situation for longer” as markets remain wary of lingering fiscal and bond-market risks.
Meanwhile, the correction in the US Dollar due to a pullback in US Treasury Yields has also lend support to the EUR/USD pair. As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades marginally lower to near 102.00. The DXY fell on Thursday after failing to extend the rally above the yearly high at 102.54.
Going forward, investors will focus on the US Consumer Price Index (CPI) data for September, which will be published on Wednesday.
EUR/USD Technical Analysis
In the daily chart, EUR/USD trades at 1.1221, keeping a clear bearish tone as spot remains under the 20-period exponential moving average (EMA), which stands at 1.1344 and acts as immediate overhead resistance. The distance between price and the EMA suggests the pair is entrenched in a short-term downtrend, while the Relative Strength Index (RSI) around 27 hints at oversold conditions that could slow aggressive selling without yet implying a bullish reversal.
On the topside, initial resistance is located at the 20-day EMA at 1.1344, and a daily close above this barrier would be needed to ease bearish pressure and open the way for a corrective recovery. On the downside, with no nearby technical supports from the provided dataset, the pair remains vulnerable to further declines, and traders will likely look to price action and any emerging higher lows to identify a provisional floor if selling resumes.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
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