Forex News
Yemen’s Houthi rebels launched a series of missile attacks targeting cities across Saudi Arabia as the military said projectiles are being intercepted. Falling shrapnel in Dhahran and Riyadh injured at least four people in the Saudi capital.
The Saudi Ministry of Energy stated that an attack on the Saudi Aramco facility in Dhahran caused a small fire, but no casualties were reported.
The latest Houthi attacks came after several days of strikes on Riyadh’s main airport, which reportedly killed at least 18 people and injured more than 300. These incidents were the deadliest in Saudi Arabia since the Iran war began in late February.
Market reaction
At the time of writing, the West Texas Intermediate (WTI) is up 1.46% on the day at $93.75.
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.
- AUD/USD gains 0.34% as Williams signals limited future Fed tightening.
- RBA minutes leave further rate hikes possible amid persistent inflation.
- Australian employment data takes center stage, with 20K jobs expected.
The Aussie Dollar registers a gain of over 0.34% against the US Dollar on Tuesday as news flows remain quiet, with US data coming mixed, while hostilities in the Middle East continue. The AUD/USD trades at 0.6983.
AUD/USD advances as Fed policy divergence and RBA tightening risks shift market sentiment
US equity markets closed mixed on Tuesday, while the Greenback was on the back foot, being the laggard amongst FX currencies. Dovish comments by New York Fed President John Williams weighed on the Dollar, which retreated after hitting 18-month highs.
Williams said that he has pencilled one rate increase in 2026 but none for the next year. Meanwhile, Regional Fed Bank Presidents Susan Collins and Austan Goolsbee expressed that the labor market is solid and that the AI buildout is driving inflation higher, meaning that further tightening is needed.
US data was mixed, with Existing Home Sales rising 1.5% MoM to 3.99 million in September, exceeding August’s contraction. Jobs data from Automatic Data Processing (ADP) showed that the 4-week average Employment Change cooled from 25.25K to 24.75K.
In Australia, the economic docket remains absent, though the latest Reserve Bank of Australia meeting minutes showed that the high cost of living and further price increases open the door for rate rises.
Ahead, the Aussie economic schedule will feature jobs data on October 15. The economy is expected to add 20K people to the workforce, down from 39.5K in August, and the Unemployment Rate is projected to stay unchanged at 4.6%.
AUD/USD Price Forecast: Technical outlook
In the daily chart, AUD/USD trades at 0.6983, extending a corrective phase below the clustered simple moving averages (SMA) around 0.7087, which keeps the near-term bias bearish. Price holds above the upward support trend line coming off 0.6833, now mapped near 0.6914, while the Relative Strength Index (14) at about 41 suggests soft, but not extreme, downside momentum after the recent retreat from the 0.72 area.
On the topside, initial resistance is seen at the rising trend-line barrier near 0.7077, followed closely by the 50/100/200-day SMA cluster around 0.7087, with a stronger cap at the horizontal level of 0.7198; further up, broader trend resistance waits near 0.7426 and then 0.8866/0.9790. On the downside, immediate support is offered by the trend line around 0.6914, ahead of the prior downward resistance line turned structural floor near 0.6362, where buyers would be expected to defend the broader base if selling pressure deepens.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
- Gold price loses ground to around $4,155 in Wednesday’s early Asian session.
- Elevated energy costs fuel inflation concerns, undermining the Gold price.
- Fed’s Williams said he sees one more rate hike as appropriate this year, but doesn’t expect further tightening in 2027.
Gold price (XAU/USD) drifts lower to near $4,155 during the early Asian session on Wednesday. The precious metal extends the decline as rising oil prices fuel inflation concerns and prompt major central banks to tighten monetary policy. Traders await the US Consumer Price Index (CPI) inflation data later on Wednesday to gauge the outlook on monetary policy.
The International Monetary Fund (IMF) on Tuesday highlighted risks from elevated public debt levels and rising bond yields that may be driven higher still by war-driven inflation pressures.
Additionally, rising tensions in the Middle East raise fears of oil-driven inflation. Yemen’s Houthis launched a missile barrage at cities throughout Saudi Arabia as the military says projectiles are being intercepted, with shrapnel falling on the city of Dhahran and injuring at least four in the capital, Riyadh.
However, remarks from Federal Reserve (Fed) Bank of New York President John Williams might help limit the yellow metal’s losses. Williams said on Tuesday that he still sees one more interest-rate hike as appropriate this year, but doesn’t expect further tightening in 2027.
US Treasury yields dropped after Williams’ remarks, with two-year notes erasing an increase of as much as three basis points (bps). Lower yields are typically supportive for gold, which doesn’t bear interest.
Markets are pricing in roughly a 77.3% chance that the Fed will leave interest rates unchanged this month, while assigning nearly an 87.8% odds of a rate hike in December.
CTA short covering fails to remove downside risk for gold and platinum
According to TD Securities, Commodity Trading Advisors have begun to pare back bearish exposure, with “CTAs covering some shorts in gold and platinum,” but the bank cautions that “pricing remains prone to further selling still.” This combination of short covering alongside lingering vulnerability underscores that recent positioning shifts have yet to fully neutralize downside risks in the precious metals complex.
Williams leans dovish on 2027 rates but Fed tone stays firmly hawkish
Fed’s Williams delivered a notably softer message, with the FXS Speechtracker score at 3.4/10, well below the 5.8/10 historical average, signaling a more dovish tone relative to the established baseline. The explicit comment that Williams currently sees no need for a rate hike in 2027, alongside confidence that inflation will slow “quite a bit” toward the 2% target next year, reinforces expectations for a prolonged pause and eventual easing in Dollar policy. This combination suggests reduced upside risks for the Dollar and a more supportive backdrop for risk assets, especially if incoming data confirm the disinflation narrative.
The FXS Fed Sentiment Index fell by 3.09 points to 133.86, indicating a meaningful pullback in perceived hawkishness despite remaining well above the neutral 100 mark. This configuration shows the Fed still in hawkish territory compared to the established baseline, but Williams’ softer stance and the weak FXS Speechtracker score point to a gradual shift toward a less aggressive policy outlook that FX markets may interpret as incrementally Dollar-negative over the medium term.
Technical Analysis: Gold remains capped under the 100-day SMA
In the daily chart, XAU/USD maintains a bearish near-term bias as price holds beneath the 100-day simple moving average (SMA) and the Bollinger middle band. The clustering of these overhead averages suggests gold remains capped within a corrective phase, while the lower Bollinger band underpins the current consolidation. The Relative Strength Index (14) at 43.15 stays below the neutral 50 line, hinting at subdued buying interest rather than an outright oversold condition.
On the topside, initial resistance is located at the Bollinger 20-period SMA near $4,220, followed by the 100-day SMA at $4,250, with a stronger barrier at the upper Bollinger band around $4,390, where selling pressure could re-emerge if a rebound extends. On the downside, immediate support is provided by the lower Bollinger band at $4,045; a decisive break below this floor would open the way toward deeper retracement, while holding above it keeps XAU/USD in a range-bound bearish correction beneath its key moving average cluster.
(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.
- USD/JPY dips under 158.00 on the BoJ report, then climbs back near 158.50.
- Traders put an October BoJ hike near 10% and one by December near 88%.
- Japan has no data of note this week, and US inflation comes on Wednesday.
The Dollar fell against every major currency on Tuesday and fell least against the Yen, on the day the Bank of Japan (BoJ) was reported to be leaning against an October rate hike. USD/JPY jumped to just under 158.50 on the report and fell to just under 158.00 within three five-minute bars, then climbed back near 158.50 as US bond yields rose.
Bloomberg reported that BoJ officials are inclined to skip a second straight hike at the October 30 meeting and keep December open, after raising the rate to 1.25% on September 18. Overnight swaps, the contracts traders use to bet on the BoJ's rate, put the odds near 10% for October and 88% by December. The BoJ's own survey, published on Tuesday, showed households expect prices to rise 11.8% on average over the next year.
The Fed's rate is 3.75%-4.00% against the BoJ's 1.25%, and the 10-year Treasury yield near 5.2% is about 2.2 points above Japan's 10-year at 3.0%. A BoJ that waits until December leaves that gap alone, and USD/JPY climbed back as the Treasury yield rose once US trading began.
On the calendar
Japan has nothing on its data calendar this week likely to move the Yen, and the BoJ doesn't decide until October 30. Finance Minister Katayama and US Treasury Secretary Bessent are both at the International Monetary Fund (IMF) meetings in Bangkok, which run through Saturday, and the last time their governments bought Yen together, on July 31, USD/JPY was near 164.00.
The US side carries the scheduled news: September consumer prices on Wednesday, forecast up 0.6% in the month after 0.4%, producer prices and retail sales on Thursday, and Fed Chair Warsh on Friday. Each one feeds the Treasury yield that USD/JPY followed back up on Tuesday.
On the charts
Tuesday's low dipped under the 50-day Exponential Moving Average (EMA) near 158.00 and stopped about a tenth of a yen above the 200-day EMA, with the two averages about a third of a yen apart. USD/JPY hasn't traded above 159.00 since September 24, and every session since October 5 has stayed between roughly 157.50 and 159.00.
USD/JPY daily chart
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
- USD/MXN surges 0.57% to 18.36 despite softer Fed rhetoric.
- Fed officials flag AI-driven inflation risks ahead of September's CPI.
- Mexico's industrial production accelerates to 3.5% as Peso weakness persists.
The Mexican Peso depreciates against the US Dollar as traders await the release of the US Consumer Price Index (CPI) report, which could set the pace for interest rates towards the end of the year. The USD/MXN trades at 18.36, up 0.57%.
Peso fails to rally on Fed dovish rhetoric, US CPI eyed
The emerging-market currency failed to gain traction even though New York Fed John Williams was dovish, supporting one rate hike in 2026 but none in 2027. Data in the US was mixed, with the release of the ADP Employment Change 4-week average showing the labour market cooled, while Existing Home Sales improved in September.
Williams' comments came ahead of the release of the US Consumer Price Index (CPI) for September, expected to rise 0.6% MoM and to 3.6% YoY. Core figures are forecast to dip to 0.2% MoM and, in the twelve months to September, to jump by 2.5%.
Other Fed Governors revealed that the AI buildout is pushing prices higher, with Boston Fed Susan Collins and Chicago Fed Austan Goolsbee remaining concerned about the subject, adopting a “hawkish” stance. On the dovish side lies Waller, who, despite acknowledging the latter, said inflation expectations are well anchored and that if AI investment cools, it could push inflation lower.
FX haven currencies tumbled
Geopolitics continued to play a key role in market mood, particularly in the FX markets, as safe-haven currencies such as the US Dollar, the Yen, and the Franc underperformed.
Houthi attacks on Saudi Arabia's oil facilities could trigger a jump in energy prices. Rumors of a possible resumption of US-Israeli attacks on Iran lurk, even though last week, US President Donald Trump said that he doesn’t plan any strikes on Iran, ahead of the midterm elections.
In Mexico, the economic docket was absent on Tuesday, yet Industrial Production in August improved from 2.7% to 3.5% YoY, according to INEGI. Except for this, the schedule is empty until the release of Retail Sales on October 21, followed by October’s mid-month inflation on October 22.
USD/MXN Price Forecast: Technical outlook
In the daily chart, USD/MXN trades at 18.3667, extending its advance well above the clustered triple simple moving average (50, 100, 200) at 17.3472 and the former downward resistance trend line, now turned support, near 14.9517. This price location keeps the near-term bias firmly bullish, while the Relative Strength Index (14) around 70.9 signals overbought conditions that could slow the upside, but so far only hint at consolidation rather than a clear reversal.
On the downside, immediate technical support emerges at the recent horizontal floor around 16.8866, with the triple SMA at 17.3472 providing an intermediate cushion that reinforces the broader uptrend as long as price holds above it. As long as USD/MXN stays over these underlying demand levels, any pullbacks are likely to be treated as corrective dips within the prevailing bullish structure, even if stretched momentum invites short-term pauses.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Mexican Peso FAQs
The Mexican Peso (MXN) is the most traded currency among its Latin American peers. Its value is broadly determined by the performance of the Mexican economy, the country’s central bank’s policy, the amount of foreign investment in the country and even the levels of remittances sent by Mexicans who live abroad, particularly in the United States. Geopolitical trends can also move MXN: for example, the process of nearshoring – or the decision by some firms to relocate manufacturing capacity and supply chains closer to their home countries – is also seen as a catalyst for the Mexican currency as the country is considered a key manufacturing hub in the American continent. Another catalyst for MXN is Oil prices as Mexico is a key exporter of the commodity.
The main objective of Mexico’s central bank, also known as Banxico, is to maintain inflation at low and stable levels (at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%). To this end, the bank sets an appropriate level of interest rates. When inflation is too high, Banxico will attempt to tame it by raising interest rates, making it more expensive for households and businesses to borrow money, thus cooling demand and the overall economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN.
Macroeconomic data releases are key to assess the state of the economy and can have an impact on the Mexican Peso (MXN) valuation. A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only does it attract more foreign investment but it may encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this strength comes together with elevated inflation. However, if economic data is weak, MXN is likely to depreciate.
As an emerging-market currency, the Mexican Peso (MXN) tends to strive during risk-on periods, or when investors perceive that broader market risks are low and thus are eager to engage with investments that carry a higher risk. Conversely, MXN tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
- GBP/USD climbs to near 1.3250, still inside its range since September 24.
- The Pound barely moves against the Euro, so the gain is all about the Dollar.
- US inflation is due Wednesday, and UK GDP is forecast to shrink on Thursday.
Despite Tuesday's gain, GBP/USD is in its third straight week of trading between roughly 1.3200 and 1.3300, a range it has held since September 24. It climbed in steps from just above 1.3200 to a high just under 1.3260 and trades near 1.3250, the middle of that range.
Bank of England (BoE) external member Greene said the UK's Bank Rate of 3.75% isn't holding the economy back much, and that waiting for inflation to spread into wages and prices would mean acting too late. New York Fed President Williams said one more US hike this year is appropriate but he sees no need for another in 2027. GBP/USD didn't move when external member Greene argued for a UK hike, and it made a high after President Williams said the Fed could be done after one more.
Traders' futures bets put about 90% odds on the Fed's rate, now 3.75%-4.00%, ending 2027 at least half a point higher, which is two hikes where President Williams sees one. The Pound rose against the Dollar and barely moved against the Euro, so Tuesday's gain came from a weaker Dollar rather than a stronger Pound.
On the calendar
US inflation for September is due on Wednesday, forecast at 3.6% for the year after 3.4% in August, with core inflation, the measure without food and energy, forecast at 2.5% from 2.4%. Retail sales follow on Thursday, forecast up 0.3% in September after 1.2%. A faster rise in prices would favour the futures market's view over President Williams's.
BoE Chief Economist Pill, one of three members who voted for a September hike, speaks on Wednesday and Thursday. UK Gross Domestic Product (GDP) for August is due on Thursday, forecast to shrink 0.1% after growing 0.4% in July, and both matter for whether the BoE hikes on November 5, which traders price above 80%. BoE Governor Bailey and Fed Chair Warsh both speak on Friday.
On the charts
The week of September 28 topped out just above 1.3300, the week of October 5 just under it and the current week so far just above 1.3250, while every low has been near 1.3200. GBP/USD is below its 50-day Exponential Moving Average (EMA) just above 1.3350 and its 200-day EMA just under 1.3400, and the 50-day crossed under the 200-day in early October.
GBP/USD daily chart
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling 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, its currency will benefit 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.
- DJIA hits its highest since September 22 on bank results, then finishes lower.
- Goldman Sachs beats by 30% and still slips, and Caterpillar and J&J sink.
Goldman Sachs (GS) earned $17.01 a share in the third quarter against a forecast near $13.00. JPMorgan Chase (JPM) missed on profit and revenue but raised its 2026 forecast for net interest income, what it earns on loans minus what it pays on deposits. Both stocks finished lower, so the reward for beating forecasts by 30% was a smaller loss than JPMorgan's.
The Dow Jones Industrial Average is weighted by share price, so a $1 move in any member is worth about 6 index points. Goldman, at about $890, is its most expensive stock. At their highs Goldman and UnitedHealth (UNH), which beat forecasts and raised its outlook, were adding about 350 points between them, and none of it was left by the final bell.
Falls in Caterpillar (CAT) and Johnson & Johnson (JNJ) subtracted about 250 points from the Dow, more than the index lost. Citi cut the share price it expects for Caterpillar by $150 to $950, doubting that data-centre spending for artificial intelligence justifies the current one. Johnson & Johnson beat forecasts and raised its outlook, but a $5.5 billion charge to resolve talc lawsuits left its quarterly profit at $0.09 a share.
The Dow reached just above 52,300 before the opening bell, about 500 points above Monday's close and its highest since September 22. It fell through 52,000 to the 51,750 area in the first nine five-minute bars after the bell, then made its low near 51,600 and finished just under 51,700.
On the charts
The Dow traded above its 50-day Exponential Moving Average (EMA) near 52,000 for the first time in more than a month and finished back below it. The index has now given back more than a third of its climb from the October 1 low just above 50,500, which held just above the 200-day EMA.
Dow Jones daily chart
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
DBS Group Research economist Ma Tieying assesses Taiwan’s macro outlook, highlighting a strong AI cycle, diversified energy imports and evolving tariff dynamics with the US. The report projects GDP growth easing from around 12% year-on-year to high-single digits from 4Q26, with full-year forecasts of 11.6% for 2026 and 5.6% for 2027, and CPI near 2.5% in 4Q26.
AI cycle, growth and prices
"GDP growth remains broadly on track with our expectations. High-frequency indicators suggest that GDP growth should remain around 12% yoy in 3Q, broadly in line with 12.9% in 2Q but below the 15.4% peak in 1Q. Growth is expected to moderate to a high-single-digit pace from 4Q onwards."
"We maintain our full-year GDP growth forecasts at 11.6% for 2026 and 5.6% for 2027."
"We maintain our forecast for headline CPI inflation to remain close to 2.5% in 4Q, and retain our full-year forecasts at 2.0% for 2026 and 2.1% for 2027."
"CPI inflation is also tracking broadly in line with our forecast. Headline CPI remained elevated at 2.4% yoy in 3Q, up from 1.2% in 1Q and 2.2% in 2Q."
"Taiwan has navigated the complex global environment relatively well so far this year, supported by robust AI exports and investment, diversified energy imports, and efforts to absorb higher upstream energy costs. Some normalisation is likely in 4Q26–2027, as the AI-driven growth boost moderates and domestic energy prices face greater pressure to adjust."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann describe USD/CNH price action as fading in downside momentum and now largely range-bound between 6.6900 and 6.7000 in the short term. Over 1–3 weeks, they still warn that a break and close below 6.6900 could trigger a move toward 6.6800. On a 1–3 month view, they expect the pair to keep edging lower while below 6.7815.
USD/CNH downside risk below 6.6900
"24-HOUR VIEW: Following the relatively sharp drop last Friday, we highlighted the following yesterday: “Downward momentum has increased, but not significantly. Today, USD could dip below 6.6900, but it remains to be seen whether downward momentum will strengthen sufficiently for it to maintain a foothold below this level. To keep the momentum going, USD must hold below 6.6985.” Our view did not materialise, as USD dipped to 6.6907 before recovering to close largely unchanged at 6.6950 (+0.02%). Downward momentum is fading, and the current price movements are likely part of a range-trading phase between 6.6900 and 6.7000."
"1-3 WEEKS VIEW: Yesterday (12 Oct, spot at 6.6940), we highlighted that “if USD breaks and closes below 6.6900, it may lead to a move toward 6.6800.” We will continue to hold the same view as long as USD holds below 6.7050 (no change in ‘strong resistance’ level)."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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