Forex News
Bank of England (BoE) Chief Economist Huw Pill, who has voted for a quarter-point interest rate hike in recent months, said on Thursday that we should not give impression that a hike now would be the start of a series of increases.
On Wednesday, Pill stated that he was more sceptical about market pricing of four increases to borrowing costs by the BoE over the next year.
Key quotes
Should not give impression that a hike now would be the start of a series of increases
BoE’s Pill tempers rate hike expectations, limiting GBP upside
The drop in the FXS Speechtracker score to 3/10 from a historic 6.4/10 signals a clear dovish shift in tone from Bank of England Chief Economist Pill. By stressing that a hike now should not be seen as the start of a series of increases, Pill effectively pushes back against expectations of a sustained tightening cycle, capping immediate GBP support.
This remark suggests the Bank of England is more focused on managing market expectations than on launching an aggressive policy path, which softens the perceived policy trajectory. For FX, the message reduces the appeal of GBP versus the Dollar and Euro, as investors may see any potential hike as a one-off adjustment rather than the beginning of a new bullish rate trend.
Market reaction
At the time of writing, the GBP/USD pair is up 0.39% on the day at 1.3245.
BoE FAQs
The Bank of England (BoE) decides monetary policy for the United Kingdom. Its primary goal is to achieve ‘price stability’, or a steady inflation rate of 2%. Its tool for achieving this is via the adjustment of base lending rates. The BoE sets the rate at which it lends to commercial banks and banks lend to each other, determining the level of interest rates in the economy overall. This also impacts the value of the Pound Sterling (GBP).
When inflation is above the Bank of England’s target it responds by raising interest rates, making it more expensive for people and businesses to access credit. This is positive for the Pound Sterling because higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls below target, it is a sign economic growth is slowing, and the BoE will consider lowering interest rates to cheapen credit in the hope businesses will borrow to invest in growth-generating projects – a negative for the Pound Sterling.
In extreme situations, the Bank of England can enact a policy called Quantitative Easing (QE). QE is the process by which the BoE substantially increases the flow of credit in a stuck financial system. QE is a last resort policy when lowering interest rates will not achieve the necessary result. The process of QE involves the BoE printing money to buy assets – usually government or AAA-rated corporate bonds – from banks and other financial institutions. QE usually results in a weaker Pound Sterling.
Quantitative tightening (QT) is the reverse of QE, enacted when the economy is strengthening and inflation starts rising. Whilst in QE the Bank of England (BoE) purchases government and corporate bonds from financial institutions to encourage them to lend; in QT, the BoE stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive for the Pound Sterling.
- NZD/USD catches fresh bids as a sharp fall in US bond yields drags the USD away from an 18-month top.
- Hawkish comments from RBNZ Chief Economist Paul Conway provide an additional boost to the NZD.
- Fed hike bets and geopolitical risks could limit USD losses as the focus now shifts to the US PPI report.
The NZD/USD pair gains strong positive traction during the Asian session on Thursday, building on the previous day's late rebound from the 0.5565 region, or its lowest level since April 2025. The momentum lifts spot prices to a nearly two-week top, around the 0.5635 zone, and is supported by a combination of factors.
Despite Wednesday's hot US consumer inflation figures, investors seem convinced that the Federal Reserve (Fed) will keep interest rates steady at its October policy meeting. Adding to this, a Bloomberg report suggests that China seems to be moving US securities to non-US custodian banks in other countries, triggering a steep decline in US bond yields. This, in turn, prompts some follow-through US Dollar (USD) profit-taking and drags it away from an 18-month high, offering some support to the NZD/USD pair.
Meanwhile, Reserve Bank of New Zealand (RBNZ) Chief Economist Paul Conway said that the late-October rate decision is completely open and that the central bank still sees the OCR as most likely to rise, though it has not decided on timing. This, in turn, provides an additional boost to the New Zealand Dollar (NZD) and contributes to the bid tone surrounding the NZD/USD pair. That said, the USD corrective slide is likely to be limited, warranting some caution before confirming that spot prices have bottomed out.
According to the CME Group's FedWatch Tool, market participants are still pricing in over an 85% chance that the US central bank will raise borrowing costs again by the end of this year. Moreover, inflation risks stemming from volatile energy prices underpin prospects for further Fed tightening. Adding to this, the geopolitical risk premium remains in play amid escalating tensions in the Middle East and the US-Iran standoff over the Strait of Hormuz, which could support the safe-haven buck and cap the NZD/USD pair.
Traders now look forward to the release of the US Producer Price Index (PPI), due later during the North American session, for some impetus. Apart from this, Fed Chair Kevin Warsh's speech at the annual meetings of the IMF and World Bank in Bangkok on Friday will be looked upon for more cues about the future policy path. The outlook, in turn, will play a key role in influencing the near-term USD price dynamics and provide some meaningful impetus to the NZD/USD pair.
NZD/USD 4-hour chart
Technical Analysis
The NZD/USD pair struggles to build on intraday gains beyond the 100-period Simple Moving Average (SMA). Moreover, spot prices keep a bearish near-term tone beneath the 23.6% Fibonacci retracement, suggesting that any further move up is likely to face supply into the mid-0.5600s.
Further up, the 50.0% retracement at 0.5779 and the 61.8% level at 0.5829 build a dense cap ahead of 0.5901 and 0.5992. On the downside, the Fibonacci anchor at 0.5566 is the next notable support, where buyers could attempt to slow the decline.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.64% | -0.43% | -0.41% | -0.26% | 0.27% | -0.59% | -0.77% | |
| EUR | 0.64% | 0.21% | 0.21% | 0.35% | 0.95% | 0.04% | -0.14% | |
| GBP | 0.43% | -0.21% | 0.00% | 0.19% | 0.70% | -0.16% | -0.36% | |
| JPY | 0.41% | -0.21% | 0.00% | 0.14% | 0.70% | -0.21% | -0.37% | |
| CAD | 0.26% | -0.35% | -0.19% | -0.14% | 0.54% | -0.33% | -0.51% | |
| AUD | -0.27% | -0.95% | -0.70% | -0.70% | -0.54% | -0.87% | -1.05% | |
| NZD | 0.59% | -0.04% | 0.16% | 0.21% | 0.33% | 0.87% | -0.19% | |
| CHF | 0.77% | 0.14% | 0.36% | 0.37% | 0.51% | 1.05% | 0.19% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
- The US Dollar Index faces intense selling pressure in the aftermath of the US inflation data for September.
- Both US headline and core inflation figures rose at a faster-than-expected pace.
- The odds of the Fed hiking interest rates in October have increased marginally after the US CPI data release.
The US Dollar (USD) underperforms its major currency peers on Thursday as hot United States (US) Consumer Price Index (CPI) data for September has failed to bring a meaningful impact on Federal Reserve’s (Fed) interest rate expectations.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.61% | -0.43% | -0.39% | -0.23% | 0.22% | -0.58% | -0.76% | |
| EUR | 0.61% | 0.17% | 0.19% | 0.35% | 0.86% | 0.00% | -0.16% | |
| GBP | 0.43% | -0.17% | 0.02% | 0.18% | 0.65% | -0.16% | -0.34% | |
| JPY | 0.39% | -0.19% | -0.02% | 0.15% | 0.64% | -0.21% | -0.38% | |
| CAD | 0.23% | -0.35% | -0.18% | -0.15% | 0.46% | -0.34% | -0.53% | |
| AUD | -0.22% | -0.86% | -0.65% | -0.64% | -0.46% | -0.81% | -1.00% | |
| NZD | 0.58% | -0.01% | 0.16% | 0.21% | 0.34% | 0.81% | -0.19% | |
| CHF | 0.76% | 0.16% | 0.34% | 0.38% | 0.53% | 1.00% | 0.19% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
In the Asian trade, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.6% lower to near 101.90. The DXY has retreated sharply from its 18-month high of 102.95 posted on Wednesday.
The US CPI report showed that both headline and core inflation accelerated at a faster-than-expected pace to 3.7% and 2.6%, respectively.
However, the follow-up impact of hot US CPI report on Fed’s monetary policy expectations appears to be limited. The CME FedWatch tool shows that the odds of the Fed hiking interest rates in the policy meeting later this meeting have increased marginally to 27% from 22% seen before the data release.
US Bond Yields are also facing significant selling pressure following the US inflation report release. Yields on 10-year US Treasuries have extended their correction to near 5.10%.
Later in the day, investors will focus on the US Producer Price Index (PPI) data for September, which will be published at 12:30 GMT.
US Dollar Index Technical Analysis
In the daily chart, Dollar Index Spot trades at 101.99, retaining a mildly bearish near-term bias as it holds beneath the 9-period exponential moving average (EMA) at 102.11. The short-term trend is capped by this nearby dynamic barrier, while the Relative Strength Index (RSI) at 59.31 shows positive but moderating momentum, hinting that bulls are losing some traction after the recent overbought readings seen earlier in the month.
On the topside, immediate resistance is located at the 9-period EMA near 102.11, and a sustained break above this level would ease the current downside pressure and open the way for a broader recovery phase. With no clear technical supports derived from the provided dataset, any pullbacks from current levels would likely be driven by momentum cooling rather than well-defined structural floors, leaving the index vulnerable to corrective dips while it remains capped below the short-term EMA.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
- USD/CAD falls despite hot US CPI data boosts expectations for a Federal Reserve rate hike in late October.
- The Canadian Dollar could weaken as crude oil prices drop on potential US sanction relief for shadow-fleet tankers.
- Proposed US sanction changes aim to lower oil freight costs, outweighing USD weakness to cap USD/CAD downside.
USD/CAD depreciates after registering gains in the previous day, trading around 1.4200 during Asian hours on Thursday. The currency pair lost ground as the US Dollar (USD) struggled while investors continued to evaluate the Federal Reserve’s (Fed) monetary policy outlook in the wake of stronger-than-expected inflation data.
The Bureau of Labor Statistics (BLS) reported on Wednesday that the US Consumer Price Index (CPI)—a broad measure of goods and services costs across the economy—climbed 0.6% month-over-month in September, bringing the 12-month headline rate to 3.7%. Both metrics came in higher than economists' forecasts of 0.6% and 3.6%, respectively. Meanwhile, core CPI (which strips out volatile food and energy components) advanced 0.3% for the month and rose 2.6% on an annual basis, exceeding market estimates of 0.2% and 2.5%.
This hotter-than-anticipated inflation report reinforced expectations for a potentially more hawkish Federal Reserve, bolstering arguments for an interest rate hike at the upcoming Federal Open Market Committee (FOMC) meeting on October 27–28. Following the data release, futures traders raised the probability of a rate hike at the late-October meeting to approximately 31.6%, according to CME Group’s FedWatch tool.
Treasury curve bear flattens as stronger data lifts Fed hike risk
According to TD Securities, the US rates market has responded to the latest data with a pronounced move, as "Treasuries bear flattened sharply as the market penciled in more rate hikes." The firm notes that, despite the repricing of Fed expectations, "we don't expect an October hike despite a sharp increase in pricing," but cautions that "the stronger data hints at the risk of more hikes in the coming months, maintaining upward pressure on rates."
Despite the USD's weakness, downside pressure on the USD/CAD pair could remain limited as the commodity-linked Canadian Dollar (CAD) faces its own headwinds from falling oil prices. Crude prices declined following news that the Trump administration is considering easing sanctions on "shadow fleet" vessels that transport oil and petroleum products from sanctioned nations such as Russia, Iran, and Venezuela.
A US official confirmed Wednesday that the proposed shift is aimed at lowering record-high global freight rates. The policy discussions come shortly after President Donald Trump temporarily lifted sanctions on Russian diesel fuel—a decision that sparked sharp criticism from Ukrainian President Volodymyr Zelenskiy, European allies, and several Senate Republicans.
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.
Reserve Bank of New Zealand (RBNZ) Chief Economist Paul Conway said on Thursday that “the late-October rate decision is ‘completely open’.”
Key quotes via Bloomberg
The bank wants optionality between holding and a 25bp hike.
The RBNZ still sees the OCR as most likely to rise, but has not decided on timing.
Recent moves in oil and the NZD have added short-term upward pressure on inflation.
The bank remains confident inflation will slow to its 1% to 3% target band next year.
Market reaction
At the press time, the NZD/USD pair is adding 0.53% on the day to trade at 0.5630.
RBNZ FAQs
The Reserve Bank of New Zealand (RBNZ) is the country’s central bank. Its economic objectives are achieving and maintaining price stability – achieved when inflation, measured by the Consumer Price Index (CPI), falls within the band of between 1% and 3% – and supporting maximum sustainable employment.
The Reserve Bank of New Zealand’s (RBNZ) Monetary Policy Committee (MPC) decides the appropriate level of the Official Cash Rate (OCR) according to its objectives. When inflation is above target, the bank will attempt to tame it by raising its key OCR, making it more expensive for households and businesses to borrow money and thus cooling the economy. Higher interest rates are generally positive for the New Zealand Dollar (NZD) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken NZD.
Employment is important for the Reserve Bank of New Zealand (RBNZ) because a tight labor market can fuel inflation. The RBNZ’s goal of “maximum sustainable employment” is defined as the highest use of labor resources that can be sustained over time without creating an acceleration in inflation. “When employment is at its maximum sustainable level, there will be low and stable inflation. However, if employment is above the maximum sustainable level for too long, it will eventually cause prices to rise more and more quickly, requiring the MPC to raise interest rates to keep inflation under control,” the bank says.
In extreme situations, the Reserve Bank of New Zealand (RBNZ) can enact a monetary policy tool called Quantitative Easing. QE is the process by which the RBNZ prints local currency and uses it to buy assets – usually government or corporate bonds – from banks and other financial institutions with the aim to increase the domestic money supply and spur economic activity. QE usually results in a weaker New Zealand Dollar (NZD). QE is a last resort when simply lowering interest rates is unlikely to achieve the objectives of the central bank. The RBNZ used it during the Covid-19 pandemic.
According to a Bloomberg report, China seems to be moving United States (US) securities to non-US custodian banks in other countries, masking its role in financing US deficits. The report shows some investors and analysts arguing that the decline in Treasury holdings by Beijing is mere a shift rather than a reduction.
Bloomberg report further added that Canada’s holdings of US debt securities have grown to nearly $600 billion of Treasuries and bonds despite a tariff war, indicating that China has shifted its holdings to Canada. However, the report states that claims are still not confirmed.
Market reaction
During the report release, yields on 10-year US Treasuries are down 1.7% to near 5.1%, the lowest level seen in almost three weeks.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
- EUR/USD strengthens to around 1.1215 in Thursday’s Asian session.
- French debt concerns might cap the upside for the Euro.
- US CPI climbed 3.7% YoY in September; the core CPI rose 2.6% during the same period.
The EUR/USD pair gathers strength to near 1.1215 during the Asian trading hours on Thursday. However, the potential upside for the major pair might be limited amid lingering concerns about France’s fiscal health. All eyes will be on the US September Producer Price Index (PPI) and Retail Sales data later on Thursday.
French bonds have been among the worst hit by a recent global selloff, with traders worried that political jostling ahead of next year’s presidential election may hinder efforts to reduce its high deficit. ECB President Christine Lagarde said that France should solve its debt woes through fiscal consolidation, damping speculation about whether the central bank might start buying French bonds to contain yields.
Across the pond, the US Consumer Price Index, a broad measure of goods and services costs across the US economy, climbed 0.6% MoM in September, putting the 12-month rate at 3.7%, the Bureau of Labor Statistics revealed on Wednesday. Economists expected respective gains of 0.6% and 3.6%.
The core CPI, stripping out volatile food and energy costs, rose 0.3% for the month and was up 2.6% on an annual basis, compared with respective estimates for 0.2% and 2.5%.
The key US inflation report has reinforced the Fed's decision to raise interest rates in the October policy meeting. Futures traders raised the odds of a rate hike when the Federal Open Market Committee next meets on October 27-28 to about 31.6%, according to the CME Group’s FedWatch tool.
San Francisco Fed President Mary Daly said on Wednesday that the central bank will probably need to increase short-term interest rates further to rein in too-high inflation, but she also signaled there's no need to do so at the US central bank's October 27-28 meeting.
US CPI surprise complicates October Fed decision but tightening path seen intact
According to TD Securities, the “strong upside surprise in CPI raises concerns around inflation risks” and has made the Fed’s near-term policy decision more complex. The bank notes that “today's report makes the Fed's calculus for October more complicated following recent clear guidance about skipping a hike at the next meeting — we are now tracking a solid 0.36% m/m gain for core PCE.” Even so, TD argues that Fed leadership “appears to have decided to execute a gradual tightening cycle on the back of market pricing, through with the notable broad-based rise in yields partly doing some of the tightening for them.”
In that context, TD Securities judges that while “today's report makes the chance of an October hike higher,” they “still believe the Fed will hold and opt for December as the market is already doing some of the work for them.” The team reiterates that “we are still of the view that October will be a skip based on that pre-CPI guidance. And we continue to look for 75bps of total tightening. However, it is certainly a closer call after today's CPI data.”
Daly leans hawkish but urges patience as markets digest CPI
Daly’s speech scores 6.8/10 on the FXS Speechtracker, modestly above the 6.1/10 historical average, signaling a slightly more hawkish tone relative to the established baseline. The emphasis on gas-driven headline CPI, stubborn core inflation, and the likelihood of more rate hikes—tempered by a preference for careful timing and deliberate action—underscores a bias toward further tightening without near-term urgency. Daly’s focus on persistent above-target inflation risks, a steady labor market, and the importance of clear, accountable communication reinforces a controlled hawkish stance that markets appear to understand, as evidenced by calmer post-CPI trading in Dollar assets.
The FXS Fed Sentiment Index slipped by 0.84 points to 128.17, indicating a mild pullback in perceived hawkishness. Despite the decline, the index remains firmly above the neutral 100 mark, showing that Fed rhetoric is still in hawkish territory even as the tone shifts slightly toward patience and data dependence.
Technical Analysis: Negative outlook of EUR/USD prevails below the 100-day SMA
In the daily chart, EUR/USD keeps a bearish near-term tone as it holds below the 100-day simple moving average (SMA) and the Bollinger Bands’ middle line. The pair is attempting to stabilize after its recent slide, with the Relative Strength Index (RSI) at 36.1 recovering from oversold territory but still indicating only modest buying interest as price remains capped by the clustered resistance overhead.
On the topside, initial resistance stands at the Bollinger SMA middle band at 1.1295, ahead of the 100-day SMA at 1.1475 and the Bollinger upper band near 1.1500, which together define a broad supply zone limiting any corrective rebounds. On the downside, the Bollinger lower band at 1.1090 offers the next notable support, and a break beneath this floor would likely expose the pair to further downside continuation in the prevailing bearish trend.
(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.
European Central Bank policymaker and newly appointed Portugal central bank governor Alvaro Santos Pereira made some comments on inflation, yields, and energy prices during his speech on Thursday.
Key quotes
Yields rise is more related to fiscal issues.
If we have a winter like last year, then we have a problem with natural gas prices.
The good news is that inflation is not spreading.
If inflation starts broadening, central banks will be forced to act.
Growth is surprising on the upside, wouldn't be surprised if it continued in next few months.
Market reaction
At the time of writing, EUR/USD is up 0.53% on the day at 1.1211, unperturbed by these comments.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.45% | -0.30% | -0.36% | -0.14% | 0.32% | -0.29% | -0.60% | |
| EUR | 0.45% | 0.14% | 0.09% | 0.28% | 0.80% | 0.14% | -0.15% | |
| GBP | 0.30% | -0.14% | -0.06% | 0.14% | 0.62% | 0.00% | -0.31% | |
| JPY | 0.36% | -0.09% | 0.06% | 0.19% | 0.69% | 0.03% | -0.26% | |
| CAD | 0.14% | -0.28% | -0.14% | -0.19% | 0.48% | -0.14% | -0.45% | |
| AUD | -0.32% | -0.80% | -0.62% | -0.69% | -0.48% | -0.62% | -0.93% | |
| NZD | 0.29% | -0.14% | 0.00% | -0.03% | 0.14% | 0.62% | -0.32% | |
| CHF | 0.60% | 0.15% | 0.31% | 0.26% | 0.45% | 0.93% | 0.32% |
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).
Forex Market News
Our dedicated focus on forex news and insights empowers you to capitalise on investment opportunities in the dynamic FX market. The forex landscape is ever-evolving, characterised by continuous exchange rate fluctuations shaped by vast influential factors. From economic data releases to geopolitical developments, these events can sway market sentiment and drive substantial movements in currency valuations.
At Rakuten Securities Hong Kong, we prioritise delivering timely and accurate forex news updates sourced from reputable platforms like FXStreet. This ensures you stay informed about crucial market developments, enabling informed decision-making and proactive strategy adjustments. Whether you’re monitoring forex forecasts, analysing trading perspectives, or seeking to capitalise on emerging trends, our comprehensive approach equips you with the insights needed to navigate the FX market effectively.
Stay ahead with our comprehensive forex news coverage, designed to keep you informed and prepared to seize profitable opportunities in the dynamic world of forex trading.
