Forex News

• WTI US Oil gains 0.63% on Friday and remains close to its highest level in more than three weeks.
• The standoff between Washington and Tehran over the Strait of Hormuz keeps global energy supply concerns elevated.
• A larger-than-expected increase in US crude inventories limits the upside momentum in Oil prices.

West Texas Intermediate (WTI) US Oil trades around $86.50 on Friday at the time of writing, up 0.63% on the day. US Oil remains close to Thursday’s high of $87.38, its highest level in more than three weeks, as concerns about global energy supplies continue to support prices.

Tensions in the Middle East remain the main driver of the Oil market. The United States (US) and Iran continue to show no signs of rapprochement over restoring commercial navigation through the Strait of Hormuz. The continued closure of this strategic waterway, combined with disruptions in the Bab el-Mandeb Strait, maintains a significant risk premium in energy prices.

Risks to regional Oil flows are also heightened by tensions in the Red Sea. Yemen’s Iran-backed Houthi group claims to have targeted several Saudi Oil tankers since late July. These developments fuel concerns that a further escalation of the conflict could disrupt crude exports and reduce available supply in the global market.

Meanwhile, US President Donald Trump is stepping up economic pressure on Tehran. He threatens to launch a sweeping sanctions campaign against Iran and penalize countries, financial institutions or companies that continue to maintain commercial ties with the country. Iranian Foreign Minister Abbas Araghchi condemns the threats as “illegal and inhumane,” highlighting the lack of diplomatic progress that could quickly ease tensions.

Geopolitical support for WTI is nevertheless partially offset by a larger-than-expected increase in US inventories. According to the Energy Information Administration (EIA), US crude Oil stocks rose by 4.405 million barrels in the week ending August 14, compared with market expectations for a 600,000-barrel decline. The build follows an increase of 17.422 million barrels in the previous week and could limit gains in Oil prices if the trend continues.

Despite the increase in US inventories, immediate concerns about global supply remain at the forefront. In the absence of signs of de-escalation between Washington and Tehran or a reopening of the Strait of Hormuz, the risk of further disruptions should continue to support WTI in the near term.

TD Securities strategists argue that the United States (US) Treasury buyback announcement has reinforced bearish momentum for the Dollar. Using US Dollar Index (DXY), SPX and UST 5s30s data since 1999, they find that bull flattening alongside stronger US equities tends to weigh on the Dollar, while a US equity shock could still trigger a rebound in 2026.

Bull flattening weighs on Dollar outlook

"The US Treasury buyback announcement on August 19 caused the long-end 30y Treasury yield to fall by almost 10bp on the day and led to a bull flattening curve dynamic."

"Conventional wisdom would have been for the USD to rally when the UST curve bull flattened. Historically, the UST curve tends to bull flatten on the back of US risk-off shocks. The "flight-to-quality" phenomenon would increase short-term demand for long-dated Treasuries and the USD"

"However, in the uncommon circumstance when US equities gained during a UST bull flattening backdrop, the USD on average would see a modest -0.3% weakness instead of a sharp 1.74% rally. The combination of UST bull flattening and higher US equities has been the second rarest across the 8 possible UST curve dynamics and equity scenarios."

"The USD was one breath away from its bearish turn after muted CPI and negative retail sales July data. Rising US institutional credibility concerns and risk of financial repression after the UST buyback announcement cemented the prevailing bearish USD momentum."

"While we anticipated the USD to eventually fall back to a bearish regime at some point in H2 '26, the move has played out earlier than we expected."

"Alternatively, the USD could also rally if a US equity shock were to materialize while UST curve does not bull steepen. Historically, the bull steepening curve dynamic would be the most bearish for the USD and could outweigh the equity effect as it tended to occur amid Fed rate cuts in Q3 '24 and Q4 '25."

"For now, market consensus expectations continue to point toward upside for US equities. Nonetheless, we see this scenario as the biggest tail risk for the USD in 2026."

"For now, the market has been gradually pricing out near-term Fed rate hike expectations after US data disappointments so far in Q3, and our base case is also for the Fed to stay on hold."

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

Brown Brothers Harriman’s (BBH) Elias Haddad highlights USD/JPY testing key support at its 200-day moving average as Japanese data firm. Haddad notes private sector growth at a six-month high and July Consumer Price Index (CPI) in line with consensus but still below Bank of Japan's (BoJ) 2026 core forecasts. Markets price an 82% chance of a September BoJ hike, yet he doubts significantly more tightening, while seeing scope for USD/JPY to grind lower on a dovish Fed repricing.

BOJ path and Fed repricing risks

"USD/JPY is testing key support at its 200-day moving average (158.34). Japan private sector growth strengthens to a six-month high in August. The composite PMI improved to 53.4 vs. 52.7 in July driven by increases in both manufacturing and services output."

"Japan July CPI rose in line with consensus. Headline CPI increased to 1.9% y/y vs. 1.6% in June, core CPI ex. fresh food increased to 1.8% y/y vs. 1.6% in June, and core CPI ex. fresh food & energy increased to 1.9% y/y vs. 1.7% in June. Both measures of core CPI are tracking below the BOJ’s 2026 forecast of 2.5%."

"The swaps curve price in 82% odds of a 25bps Bank of Japan (BoJ) rate hike to 1.25% at the next September 18 meeting. A total of 75bps of tightening is priced in over the next twelve months."

"We doubt the BoJ can tighten more aggressively than is currently implied by given that underlying inflation pressures remain contained and private consumption activity was flat over Q2."

"Nonetheless, USD/JPY can still grind lower because the risk is skewed towards a dovish Fed repricing. The US labor market is in balance, wage growth is consistent with the Fed’s 2% inflation target, and Fed policy is restrictive."

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

Standard Chartered’s Aldian Taloputra assesses Indonesia’s 2027 fiscal plans, noting a targeted deficit of 2.4% of GDP versus 2.9% in 2026. The bank maintains its own forecast of a 2.9%-of-GDP deficit, citing ambitious revenue assumptions and potential tax shortfalls. Despite a narrowing buffer, the deficit is still expected to remain below the 3% threshold.

Fiscal deficit seen below 3 percent

"The 2027 budget aims to narrow the fiscal deficit to 2.4% of GDP (from 2.9% targeted in 2026). Fiscal policy remains focused on strengthening the food, energy and education sectors as well as defence, while also restructuring SOE assets and attracting private-sector investment in the priority downstream and renewable sectors."

"After already strong tax revenue growth of 21% targeted in 2026, a second straight year of double-digit growth of 12% in 2027 looks ambitious to us."

"We maintain our 2027 fiscal deficit forecast at 2.9% of GDP, as we see risk of a tax revenue shortfall from lower commodity prices (we forecast average Brent crude at USD 75/bbl in 2027, versus USD 89/bbl YTD in 2026); a higher tax revenue base effect given slower tax restitution this year; and uneven growth drivers that may remain reliant on government support."

"Despite narrowing, we think the fiscal buffer is adequate to keep the fiscal deficit below the 3%-of-GDP threshold."

"We think financing needs will be larger in 2027, despite the narrower fiscal deficit target, due to higher debt maturities."

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

Commerzbank’s Carsten Fritsch notes Gold has surged, breaking above USD 4,500 per troy ounce as safe‑haven demand rises on US debt concerns and a weaker Dollar. The US Treasury’s bond buyback announcement triggered the sharpest daily Gold rally in six and a half months, with strong ETF inflows, though upside momentum may slow if US inflation data stays elevated.

Debt concerns boost safe haven

"The gold price jumped by more than 4% or around USD 180 on Wednesday, marking its sharpest daily rise in six and a half months. The price also surpassed the USD 4,500 per troy ounce mark for the first time since early June."

"This was triggered by the US Treasury’s announcement that it intended to more than double the volume of buybacks of long-term US government bonds with maturities of 10 to 30 years. This move comes against the backdrop of a sharp rise in bond yields in the preceding days."

"This measure calmed the bond market and led to a decline in yields. At the same time, the US dollar depreciated significantly. Confidence in the US dollar as a safe haven appears to be eroding, as investors are demanding higher yields for US government bonds and the Treasury is having to step in."

"The main beneficiary of this is gold, as evidenced by strong inflows into gold ETFs. Holdings in the gold ETFs tracked by Bloomberg recorded their strongest daily increase since September 2025 yesterday, at 18 tons."

"On the gold market, the US Treasury’s announcement was seen as a sign of stress. The sharp rise in US bond yields in the preceding days was not, in fact, due to a change in Fed interest rate expectations, but rather to long-term inflation risks and growing concerns about debt levels."

"This is consistent with the news that public debt in the US broke through the USD 40 trillion (USD 40,000,000,000,000) barrier for the first time this week. It is barely four and a half years since the debt level exceeded the USD 30 trillion mark. Interest payments are expected to amount to USD 1.1 trillion this fiscal year, which represents a threefold increase within five years."

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

• EUR/GBP remains range-bound below a cluster of key daily moving averages.
• The flat MACD histogram and neutral RSI point to subdued buying pressure.
• The 50-day Simple Moving Average at 0.8566 acts as a near-term pivot for the cross.

EUR/GBP remains stuck in a narrow trading range this month, stalling the rebound from near 0.8460 in mid-July as buyers struggle to clear the 50-day Simple Moving Average (SMA). At the time of writing, the cross trades around 0.8567 during European trading hours on Friday, virtually unchanged on the day.

Traders show a muted reaction to Friday’s economic data. UK Retail Sales came in weaker than expected, while the previous month’s readings were revised lower. Meanwhile, preliminary August Purchasing Managers Index (PMI) data from both the UK and the Eurozone exceeded market forecasts.

Technical Analysis

On the daily chart, EUR/GBP is capped beneath a dense band of medium- and long-term moving averages and Fibonacci levels, which keeps the near-term bias mildly bearish despite some stabilization in momentum.

Price is sitting on the 50-day Simple Moving Average (SMA) around 0.8567. The Relative Strength Index (RSI) at around 53 is neutral, and the Moving Average Convergence Divergence (MACD) lines are slightly above zero with a flat histogram, suggesting subdued upside pressure rather than a decisive trend reversal.

On the topside, immediate resistance emerges at the 50.0% Fibonacci retracement at 0.8573, with the 61.8% retracement at 0.8601 and the 100-day SMA at 0.8616 forming a nearby cluster that could stall any recovery.

Further up, the 78.6% Fibonacci level at 0.8641 precedes the 200-day SMA at 0.8663, while the June high and 100.0% retracement at 0.8692 marks a stronger barrier. On the downside, initial support is seen at the 38.2% Fibonacci retracement at 0.8545, ahead of the 23.6% level at 0.8511, with the anchor low around 0.8455 acting as a more significant floor if selling pressure resumes.

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