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Forex News

News source: FXStreet
Oct 21, 17:26 HKT
British Pound: Inflation surge backs November BoE hike – BBH

Brown Brothers Harriman’s Elias Haddad notes United Kingdom (UK) September Consumer Price Index (CPI) surprised to the upside, pushing British Pound (GBP) higher against both the Dollar and Euro. Haddad sees a 25 bps Bank of England (BoE) rate hike to 4.00% on November 5 as largely assured, but argues the swaps curve is pricing too much tightening, which they view as a headwind for Pound performance.

Pound supported by hot CPI

"GBP is up versus USD and EUR. UK September CPI inflation ran hot. A 25bps BoE policy rate hike to 4.00% on November 5 is pretty much a done deal."

"Headline CPI rose to an 11-month high at 3.5% y/y vs. 3.1% in August, driven by higher motor fuel inflation, exceeding consensus (3.4%) and the BoE’s projection (3.0%). Core CPI matched expectations at 2.8% y/y vs. 2.6% in August, but services CPI rose 0.3ppt to a four-month high of 3.7% y/y, overshooting consensus (3.6%) and BoE projection (3.3%)."

"The swaps curve still implies 113bps of BOE tightening in the next twelve months. We see scope for less which is a headwind for GBP: (i) The UK economy is operating below capacity, (ii) virtually no real wage growth constrains spending, (iii) the policy rate is near the top of the BOE’s estimated 2% to 4% neutral range, and (iv) fiscal policy will likely turn more restrictive following the October 28 UK budget."

"BoE Governor Andrew Bailey will have an opportunity to address the inflation overshoot during today’s fireside chat (2:00pm London, 9:00am New York)."

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

Oct 21, 17:25 HKT
GBP/USD Price Forecast: Sees fresh upside leg above 1.3410
  • GBP/USD gains to near 1.3395 as hawkish BoE prospects strengthen British Pound.
  • The BoE is almost certain to deliver an interest rate hike in the November policy meeting.
  • UK’s inflation grew at a faster-than-expected pace in September.

The British Pound (GBP) trades 0.1% higher at around 1.3395 against the US Dollar (USD) during the European trading session on Wednesday. The British currency strengthens as hotter-than-expected United Kingdom (UK) Consumer Price Index (CPI) data for September has prompted hawkish Bank of England (BoE) expectations.

Earlier in the day, the Office for National Statistics (ONS) has reported that the headline CPI grew by 3.5% Year-on-Year (YoY), faster than 3.4% estimates and the August reading of 3.1%. The core CPI – which strips off volatile components of food, energy, alcohol and tobacco – also grew stronger by 2.8% YoY vs. estimates of 2.7% and the previous release of 2.6%.

BoE path seen as firmly higher as markets price multiple UK rate hikes

Analysts at Societe Generale argue that the near-term policy path is now largely predetermined, with “for the BoE, a 25bp increase bank rate in November is locked in.” They add that money markets are already discounting a more extended tightening cycle, noting that they are “aggressively priced for another three hikes by next summer to 4.75% unless the progress in inflation stalls and the economy extends its resilient performance into 2027.”

Going forward, investors will focus on the UK Retail Sales data for September and flash S&P Global PMI data for October scheduled for Friday.

Meanwhile, the US Dollar is under pressure due to concerns over United States (US) Artificial Intelligence (AI)-growth optimism and expectations that the Federal Reserve (Fed) will keep interest rates steady in the policy meeting later this month.

GBP/USD Technical Analysis

In the daily chart, GBP/USD trades at 1.3391. The pair holds above the 20-period exponential moving average (EMA) at 1.3303, keeping the near-term tone constructive as price extends its recovery from recent lows. The Relative Strength Index (RSI) at 57.5 leans to the bullish side without yet signaling overbought conditions, suggesting room for further upside while the pair remains supported by the reclaimed short-term trend baseline.

On the downside, initial support is seen at the 20-day EMA at 1.3303, with the latest close at 1.3391 acting as a nearby pivot level for any corrective pullbacks. Looking up, the pair could enter a fresh upside leg if it manages a decisive break above 1.3410.

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

Economic Indicator

Consumer Price Index (YoY)

The United Kingdom (UK) Consumer Price Index (CPI), released by the Office for National Statistics on a monthly basis, is a measure of consumer price inflation – the rate at which the prices of goods and services bought by households rise or fall – produced to international standards. It is the inflation measure used in the government’s target. The YoY reading compares prices in the reference month to a year earlier. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.

Read more.

Last release: Wed Oct 21, 2026 06:00

Frequency: Monthly

Actual: 3.5%

Consensus: 3.4%

Previous: 3.1%

Source: Office for National Statistics

The Bank of England is tasked with keeping inflation, as measured by the headline Consumer Price Index (CPI) at around 2%, giving the monthly release its importance. An increase in inflation implies a quicker and sooner increase of interest rates or the reduction of bond-buying by the BOE, which means squeezing the supply of pounds. Conversely, a drop in the pace of price rises indicates looser monetary policy. A higher-than-expected result tends to be GBP bullish.

Oct 21, 17:14 HKT
South African Rand: Gains against US Dollar at risk – Societe Generale

Societe Generale analyzes USD/ZAR after its rebound above the 200-DMA, with an interim high near 16.75 and a current pullback towards 16.37. The bank stresses the importance of the pair holding above the 200-DMA, noting two failed attempts earlier this year. It highlights downside risks towards 16.27 and 16.15 if 16.37 breaks.

Rebound faces crucial 200-DMA test

"USD/ZAR extended its rebound after reclaiming the 200-DMA, reaching an interim high near 16.75."

"A pullback is now taking shape, with the pair retracing towards the 200-DMA at 16.37. It will be important to observe whether USD/ZAR can maintain above this moving average."

"The previous two attempts to reclaim the 200-DMA failed earlier this year, underscoring its significance."

"If a break below 16.37 materializes, the pair may drift towards next supports at projections of 16.27 and 16.15."

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

Oct 21, 17:04 HKT
Russian Deputy PM Novak: We may fully restore diesel exports by year-end

Russian Deputy Prime Minister (PM) Alexander Novak said during the European trading session on Wednesday that Moscow may fully restore diesel exports by year-end. Novak added, "First Russian diesel cargo to the US will ship October 22."

Market reaction

No major impact is seen in oil prices following comments from Russian Deputy PM Novak. As of writing, the WTI Oil price trades 1% higher tonear $98.85.

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.

Oct 21, 17:03 HKT
Australian Dollar refreshes monthly top as hawkish RBA counters USD uptick
  • AUD/USD is prolonging its recent recovery from a multi-month low for the fourth straight day.
  • The recent hawkish comments from RBA officials continue to act as a tailwind for the Aussie.
  • Geopolitical risks and Fed hike bets support the USD, though fail to hinder the pair’s move up.

The AUD/USD pair gains follow-through positive traction for the fourth straight day on Wednesday, extending its recovery from sub-0.6900 levels, or the lowest since early July, touched last week. The momentum lifts spot prices to a fresh monthly high, around the 0.7030 area, during the first half of the European session and is sponsored by the recent hawkish comments from Reserve Bank of Australia (RBA) officials.

In fact, RBA Assistant Governor Christopher Kent said on Monday that there are reasonable indications that neutral interest rates are increasing both domestically and globally. Furthermore, RBA Deputy Governor Andrew Hauser warned earlier today that Q3 trimmed-mean inflation may run hotter than expected, keeping rate hike expectations alive ahead of the November 3 policy meeting. Adding to this, China's better-than-expected Q3 GDP print turns out to be another factor acting as a tailwind for the Australian Dollar (AUD).

Meanwhile, the US Dollar (USD) struggles to attract any meaningful buyers amid hopes for US-Iran peace talks. However, the geopolitical risk premium remains in play amid the uncertainty surrounding the Middle East crisis and the US-Iran standoff over the Strait of Hormuz. Apart from this, the growing acceptance that the US Federal Reserve (Fed) will raise borrowing costs again in December amid oil-driven inflation fears acts as a tailwind for the safe-haven buck. This, however, does little to hinder the AUD/USD pair's positive move.

This, in turn, suggests that the path of least resistance for spot prices remains to the upside and any corrective pullback is likely to be bought into. Traders now look forward to the release of global flash PMIs, due on Friday, though the focus will remain glued to the closely-watched two-day FOMC meeting, starting next Tuesday. Apart from this, traders will take cues from the Advance US Q3 GDP print and the US Personal Consumption Expenditures (PCE) Price Index, the Fed's preferred inflation gauge, scheduled for next Thursday.

AUD/USD daily chart

Chart Analysis AUD/USD

Technical Analysis

The AUD/USD pair holds just beneath the 100-day Simple Moving Average (SMA) at 0.7034 and below the mid-range 50.0% Fibonacci retracement at 0.7064, which keeps the near-term bias bearish. Spot prices, however, remain capped by this overhead cluster of the SMA and successive Fibonacci levels at 0.7104 and 0.7162, suggesting rallies could face resistance near the aforementioned levels.

On the downside, immediate support is seen at the 38.2% Fibo. retracement at 0.7024, with the 23.6% level at 0.6974 protecting the recent pullback and a deeper structural floor near 0.6893. As long as the AUD/USD pair holds below the 100-day SMA at 0.7034, a break under 0.7024 would open the way toward 0.6974 and potentially 0.6893.

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

Australian Dollar Price This week

The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies this week. Australian Dollar was the strongest against the Japanese Yen.

USD EUR GBP JPY CAD AUD NZD CHF
USD -0.29% -0.65% 0.05% -0.47% -0.98% -0.53% -0.22%
EUR 0.29% -0.33% 0.37% -0.11% -0.62% -0.21% 0.10%
GBP 0.65% 0.33% 0.72% 0.23% -0.27% 0.12% 0.48%
JPY -0.05% -0.37% -0.72% -0.50% -1.03% -0.57% -0.15%
CAD 0.47% 0.11% -0.23% 0.50% -0.53% -0.03% 0.29%
AUD 0.98% 0.62% 0.27% 1.03% 0.53% 0.39% 0.72%
NZD 0.53% 0.21% -0.12% 0.57% 0.03% -0.39% 0.36%
CHF 0.22% -0.10% -0.48% 0.15% -0.29% -0.72% -0.36%

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).

Oct 21, 17:01 HKT
Australian Dollar: Uptrend building toward 0.7035 against US Dollar – UOB

UOB strategists Quek Ser Leang and Lee Sue Ann note that AUD/USD benefited from the weaker US Dollar and reclaimed the 0.70 handle, with momentum strengthening faster than expected. Intraday gains may be capped within a tight range, but the 1–3 week outlook now points to further upside toward 0.7035, provided the pair holds above a nearby strong support zone.

Australian Dollar momentum improves above 0.70

"24-HOUR VIEW: After AUD rose to a high of 0.6993 two days ago, we highlighted the following yesterday: “Upward momentum is increasing, albeit not significantly. Today, there is scope for AUD to test 0.7000. A clear break above this level is unlikely. The major resistance at 0.7015 is also unlikely to come into view.” We did not expect upward momentum to strengthen so quickly as AUD soared to a high of 0.7017, closing 0.34% higher at 0.7003. While further AUD strength is not ruled out, negative divergence is forming on momentum indicators, and any advance is likely to stay within a range of 0.6985/0.7020."

"1-3 WEEKS VIEW: On Monday (19 Oct, spot at 0.6965), we highlighted that AUD “appears to have moved into a range-trading phase,” and “for the time being, we expect it to trade between 0.6915 and 0.7015.” Yesterday, AUD broke above 0.7015 as it rose to a high of 0.7017. Upward momentum is starting to build, and AUD could rise toward 0.7035 as long as it holds above the ‘strong support’ level, currently at 0.6965."

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

Oct 21, 16:55 HKT
Canadian Dollar gains momentum on rising oil prices, hawkish BoC rate hike bets
  • USD/CAD depreciates as soaring crude oil prices support the commodity-linked Canadian Dollar.
  • US-Iran conflict resolution efforts continue, though officials dismiss reports that a final peace deal is imminent.
  • Markets price in an 85% chance of a Fed rate pause as Chair Warsh maintains a neutral policy stance.

USD/CAD continues its losing streak for the fifth successive day, trading around 1.4050 during European hours on Wednesday. The commodity-linked Canadian Dollar (CAD) is gaining strength, supported by rising crude oil prices.

Energy markets advanced as traders evaluated mixed reports regarding diplomatic progress between the United States and Iran. While negotiations remain active, market sentiment faced headwinds following high-level diplomatic discussions in Tehran, where Pakistan’s army chief, Field Marshal Asim Munir, met with senior Iranian diplomatic and military leaders to discuss bilateral ties and the status of talks with Washington. A diplomat involved in the talks clarified that conflict resolution efforts are ongoing, while dismissing reports of an imminent final deal as premature.

BoC hike odds stay elevated despite easing Canada inflation

Societe Generale’s Kenneth Broux highlights a disconnect between the latest inflation data and market pricing, noting that Canadian headline inflation has ticked higher while core pressures have eased. Against that backdrop, he finds it “puzzling” that “money markets continue to price in better than 50% odds of a rate increase by the BoC at the end of the month,” even as USD/CAD remains locked in a clear downtrend and grinds toward key support levels.

Meanwhile, downside pressure on the NZD/USD currency pair could be restrained as the US Dollar (USD) holds its ground on safe-haven demand. Higher oil prices have renewed concerns over global inflation, providing underlying support to the Greenback. Financial markets are closely monitoring the Federal Reserve's monetary policy outlook. According to the CME FedWatch Tool, traders are pricing in an 85% probability that the Fed will hold interest rates steady next week, alongside an 88% chance of a rate hike in December.

Technical Analysis:

In the daily chart, USD/CAD trades at 1.4050, capped beneath the key moving averages, which keeps the near-term bias bearish despite the pair holding relatively close to recent highs. Price sits below the 50- and nine-day Exponential Moving Averages (EMAs), suggesting that rallies remain vulnerable while the short- and medium-term trend indicators stay overhead. The 14-day Relative Strength Index (RSI) at 41.7 drifts below the midline, hinting at waning bullish momentum after the previous overbought readings seen earlier in October.

On the topside, immediate resistance is located at the 50-day EMA at 1.4075, with a stronger barrier at the nine-day EMA around 1.4138, where selling pressure could re-emerge if the pair attempts a rebound. With no clear technical support levels derived from the given indicators, the focus remains on whether USD/CAD can reclaim the 50-day EMA to ease downside pressure, or instead extend its pullback as momentum stays soft and the Fed Sentiment Index consolidates near recent lows.

Chart Analysis USD/CAD

Warsh flags investment surge and AI focus but avoids pre-committing on policy

Fed Chair Warsh delivered a moderately constructive but cautious message, with the FXS Speechtracker score at 5.6/10, slightly softer relative to the historical average of 6.1/10. The admission of being "over-scarred from the global financial crisis" underscores a bias toward risk management and financial stability even as Warsh highlights structural growth and an investment surge driven by "good policies." Warsh’s refusal to pre-judge the October and December meetings, coupled with emphasis on AI’s uncertain near-term employment impact, points to a data-dependent stance that tempers any immediate hawkish signal for the Dollar.

The FXS Fed Sentiment Index was unchanged, moving 0.00 points to a still-elevated level of 127.51, confirming that the overall policy tone remains firmly in hawkish territory despite the slightly softer FXS Speechtracker score. For FX markets, the combination of a high FXS Fed Sentiment Index and Warsh’s cautious, crisis-scarred framing suggests ongoing support for the Dollar, but without fresh hawkish escalation from this speech.

(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.

Oct 21, 16:52 HKT
Euro trims gains but remains above 1.1200 with France still in the spotlight
  • EUR/USD eases to 1.1220 area after being capped just above 1.1260 on Tuesday.
  • Investors remain wary of placing large Euro bets with France's political uncertainty and debt issues weighing.
  • The US Dollar remains depressed with investors pondering the scope of the Fed's tightening cycle.


The Euro (EUR) ticks lower against the US Dollar (USD) on Wednesday, giving back some of the ground taken over the last few days. The EUR/USD pair trades at 1.1220 after being halted just above 1.1260 on Tuesday, with unrest in France spooking investors while the country’s borrowing costs keep climbing.

The French government was forced to impose partial curfews in several cities this week after the student protests, which had extended through the country over the last few weeks, turned violent last weekend, triggering scenes of looting and destruction that went around the world.

France's borrowing costs are a key headwind for Euro recovery

Meanwhile, France’s debt premium continues escalating. The yield of the 10-year French OAT has stretched to 4.98%, its highest level in 24 years. The spread with the safer-considered German Bund, a gauge used to measure the country's risk premium, has escalated to 157 basis points, its highest level since the 2009-2011 financial crisis.

The Euro, however, is drawing some support from a soft US Dollar, which keeps the pair from retreating further. In the absence of key US macroeconomic releases, the US Dollar is lacking momentum, as investors brace for a Federal Reserve (Fed) pause next week and ponder the scope of the monetary tightening cycle.

ING: Dollar softens as AI jitters and shifting Fed Oil reaction weigh

Analysts at ING observe that the Dollar “continues to trade with a soft undertone,” and attribute the trend to “a mix of some aftereffects of AI-related concerns (Corewave bonds had another wobble yesterday) and stretched longs/ short-term overvaluations being unwound.”

ING also highlights a subtle shift in how the currency is responding to energy markets, arguing that “the dollar’s reaction function to Oil may have changed over the past week or so.” In their view, “rising concerns about tech stocks have somewhat dented the market’s hawkish conviction on the Fed, allowing for greater dovish flexibility at the front end in response to non-data inputs like an oil selloff,” which in turn is helping to reinforce the Dollar’s softer tone.

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.


Oct 21, 16:51 HKT
Japanese Yen: Intervention risk offsets trade pressure – MUFG

MUFG’s Lee Hardman notes the Japanese Yen (JPY) is trading in a narrow USD/JPY range above 158.00, with intervention risk and a softer US Dollar (USD) capping upside. Bank of Japan (BoJ) officials see underlying inflation near target, with markets pricing a December hike. Rising domestic yields are boosting JGB demand, though a wider trade deficit from higher Oil prices remains a headwind for Yen performance.

Range-bound USD/JPY with trade headwinds

"The yen has continued to trade in narrow range against the US dollar at just above the 158.00-level."

"The heightened risk of further intervention to support the yen is helping to prevent USD/JPY from moving higher in the near-term alongside the recent correction lower for the US dollar more broadly."

"There was no clear signal that the BoJ is considering raising rates again as soon as this month which is consistent with our view that the next hike will be delivered in December."

"Bloomberg reported evidence yesterday that rising yields in Japan are helping to attract more domestic demand for government bonds."

"The wider trade deficit for Japan due to the negative terms of trade shock from higher energy prices remains a headwind for yen performance."

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

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