Forex News

ING’s Francesco Pesole highlights that the Australian Dollar (AUD) is the only G10 currency gaining this week as hotter July inflation and strong household spending fuel hawkish Reserve Bank of Australia (RBA) expectations. ING’s macro team still favours a prolonged RBA hold, expecting benign inflation and a steady Fed to reduce urgency, with AUD/USD targeted at 0.730 by year-end but near-term gains limited as rate pricing is unwound.

Hot data versus prolonged RBA hold

"The Aussie dollar is the only G10 currency gaining ground this week amid a broad USD rebound. Hotter-than-expected inflation for July (3.5% headline, 3.6% trimmed mean) has caused a rapid rebuilding of hawkish expectations, with markets now pricing in a 28bp by year-end. That’s around a 15bp jump since the start of the week."

"This morning, Australia reported very strong household spending data for July (7% YoY), further helping the case for more tightening. However, our macro team is still leaning towards a prolonged hold by the Reserve Bank of Australia, but we admit the hawkish risks have increased."

"House prices are declining and unemployment has edged higher, trends that should become clearer in the 2Q GDP data. Moreover, the Reserve Bank of Australia will likely wait for another set of quarterly numbers before concluding that the pickup in inflation is anything more than a one-off."

"Ultimately, we expect the inflation trajectory to prove benign enough to avert another hike, with our call for a Fed on a prolonged hold also diminishing any sense of urgency in Australia."

"Markets are pricing in 12bp for the 29 September meeting, and we expect that pricing to be unwound, limiting AUD gains for now. Our view on AUD/USD remains upbeat into year-end with a 0.730 target, but that’s relying on our dovish Fed call, which should have a net-positive impact on the pair even if a dovish repricing in the AUD curve happens."

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

• Silver price remains in a tight range between $67.35 and $70 this week.
• Investors keenly await Fed Warsh’s remarks at the Jackson Hole Symposium.
• Fed’s Warsh could reiterate the central bank’s commitment to bring inflation down to the 2% target.

Silver price (XAG/USD) trades 0.35% higher to near $68.40 during the European trading session on Thursday, but is broadly sideways in a range between $67.35 and $70 this week. The white metal struggles for direction as investors await Federal Reserve (Fed) Chairman Kevin Warsh’s speech at the Jackson Hole Symposium on Friday.

Investors will pay close attention to Fed Chair Warsh’s comments regarding inflation and the United States (US) interest rate outlook.

In the July policy meeting, Fed Chair Warsh didn’t deliver any forward guidance, but stressed that the central bank is committed to bringing inflation down to the central bank’s 2% target.

Financial markets believe that the Fed’s commitment to ease price pressures would be favorable for the US Dollar (USD). Such a scenario could diminish the appeal of non-yielding assets, like Silver. Also, a higher US Dollar makes the Silver price an unfavorable risk-reward bet for investors.

Strategists at OCBC said that the USD could “find support if Warsh and other Fed officials push back against debasement concerns and reaffirm their commitment to returning inflation to the Fed's 2% target,” with the conference seen as a key venue for the Fed to clarify its stance on inflation and policy credibility.

Silver Technical Analysis

In the daily chart, XAG/USD trades at $68.40, keeping a bullish near‑term bias as price holds above the 20‑day Exponential Moving Average (EMA) at $65.34. The metal has extended its advance away from this dynamic support, while the Relative Strength Index (14) around 62 suggests firm upside momentum that is approaching overbought territory but still favors buyers.

On the downside, immediate support is seen at the 20‑day EMA near $65.34, where a pullback could attract fresh bids to maintain the broader upswing. On the topside, with no nearby structural price barriers traced yet, momentum remains the main guide; the elevated RSI reading hints that while the bullish trend persists, upside may become more gradual as the market works through increasingly stretched conditions.

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

• New Zealand Dollar approaches weekly lows near 0.5939 after rejection ahead of the 0.6000 area.
• The US Dollar retraces some losses, supported by hot US inflationary pressures.
• The Kiwi's near-term trend remains bullish while above trendline support and the 200-day SMA.

The New Zealand Dollar (NZD) heads lower for the second consecutive day against a stronger US Dollar (USD) on Monday, as hot US inflation data released on Wednesday has renewed pressure on the US Federal Reserve (Fed) to hike interest rates in the coming months. NZD/USD bears are looking at the bottom of the weekly range, around 0.5930, after rejection ahead of the 0.6000 area earlier this week.

On Wednesday, the US Personal Consumption Expenditures (PCE) Price Index confirmed that inflationary pressures keep growing at levels well above the Fed's target, although bets for a September rate hike have remained practically unchanged, as measured by the CME’s FedWatch Tool.

Strategists at ING remain “reasonably confident in [their] call for the Fed to hold on 16 September and, by extension, in a weaker Dollar.” The experts, however, caution that “the next three weeks may need to bring a more convincing combination of data and Fedspeak before markets move closer to a hold outcome,” underscoring that incoming US releases and policy communication will be critical in shaping rate expectations and the Dollar’s near-term trajectory.

Technical Analysis: NZD/USD remains supported by an ascending trendline

NZD/USD trades at 0.5944, holding a constructive bullish bias with price action supported above an ascending trendline support from late June lows, now around 0.5900, and the 200-day Simple Moving Average (SMA) at 0.5844, a popular indicator in FX markets for assessing currency trends.

Momentum indicators in the daily chart remain neutral-to-bullish, with the Relative Strength Index (14) around 60, and a mildly positive Moving Average Convergence Divergence (MACD) reading underscoring that buyers still retain control, despite weakening traction.

On the topside, bulls are likely to face significant resistance in the mentioned 0.6000 area, which capped rallies in May and June. If that level gives way, the February 18 high, at 0.6054, and the year-to-date highs around 0.6100 would come into focus.

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

Geoff Yu at BNY notes that improving flows through the Strait of Hormuz are easing Oil supply fears and supporting a lower Brent price profile. Kuwait and Qatar have restored crude shipments to about 70% of pre-war levels, lifting total Hormuz flows. As more Gulf barrels reach the market, the disruption premium in Oil prices continues to compress despite ongoing U.S.–Iran tensions.

Brent pressured by supply normalization

"Improving Hormuz flows are providing further reassurance on inflation. Kuwaiti and Qatari crude shipments have reportedly recovered to around 70% of pre-conflict levels, while broader traffic through the strait is also rising. Brent is falling again as supply fears ease, removing some of the energy-driven pressure on the global disinflation outlook."

"Brent crude is holding near $87/bbl, well below its late-April peak above $120, as rising oil flows through the Strait of Hormuz ease fears of a prolonged supply shock. Kuwait and Qatar have restored shipments to around 70% of pre-war levels, while total flows through the strait have climbed to roughly 7mn to 8mn barrels a day from about 4mn in mid-July."

"With more Gulf barrels reaching the market, the supply disruption premium in oil has continued to compress, even though Washington and Tehran remain deadlocked over control of the strait."

(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 notes USD/JPY is stuck between resistance at 160.00 and support at the 200‑day moving average, as Bank of Japan (BoJ) officials maintain hawkish guidance and underlying inflation firms near the 2% target. Haddad expects a 25bps BoJ hike in September but argues a lower USD/JPY is more likely to be driven by a dovish Fed repricing than additional BoJ tightening.

Fed repricing key for Japanese Yen

"USD/JPY remains entrenched between resistance at 160.00 and support at the 200-day moving average (158.40). Bank of Japan (BoJ) Deputy Governor Ryozo Himino stuck to the bank’s hawkish guidance."

"Himino stressed that “raising rates in a timely manner will help avoid a spike in inflation and abrupt rate hikes in the future,” adding “we should pay greater attention to the upside risk to prices than in the past.”"

"Indeed, underlying inflation in Japan has firmed, though it remains around the BoJ’s 2% target or just below. We expect the BoJ to deliver a 25bps rate hike to 1.25% at its next September 18 meeting (80% priced-in)."

"In our view, the catalyst for a lower USD/JPY will come from a dovish Fed repricing rather than a hawkish BoJ repricing. We doubt the BoJ can tighten more aggressively than is currently implied over the next twelve months (75bps) given that underlying inflation pressures remain contained and private consumption activity was flat over Q2."

"In the meantime, FX intervention threat significantly raises the cost of shorting JPY and limits USD/JPY overshoots above 160.00."

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

• GBP/USD reaches session lows at 1.3570 and is 0.5% down from Wednesday's high.
• The US Dollar gathers some momentum as hot US inflation adds pressure on the Fed to hike interest rates.
• ING strategists think that the Fed will stand pat in September, which will hurt demand for the USD.

The British Pound (GBP) extends losses for the second consecutive day on Thursday, as the US Dollar (USD) strengthens after the hot US inflation report released on Wednesday. The GBP/USD pair is trading at one-week lows at 1.3675 heading into the US session, opening more than 0.5% below Wednesday’s highs, in the mid-1.3600s.

US data released on Wednesday revealed that the Personal Consumption Expenditures (PCE) Price Index accelerated beyond expectations in July, with the yearly rate remaining steady at 3.7% against expectations of a mild decline. Likewise, core PCE inflation grew at a steady 3.3%, in both cases well above the Federal Reserve’s 2% target rate.

Markets await clearer Fed signals on September FOMC

These figures add pressure on the central bank to hike interest rates in the coming months, although bets for a September hike have remained unchanged at 36%, according to data by the CME’s FedWatch Tool.

Strategists at ING describe yesterday’s US data releases as “a mixed bag, offering some support to the dollar but failing to solve the market's conundrum about the September FOMC (pricing now 9bp).”

Against that backdrop, ING says they “remain reasonably confident in our call for the Fed to hold on 16 September and, by extension, in a weaker dollar.” However, the bank cautions that “the next three weeks may need to bring a more convincing combination of data and Fedspeak before markets move closer to a hold outcome,” underscoring that current pricing still leaves room for hike expectations to shift.

• The Australian Dollar continues to capitalize on fresh escalation in hawkish RBA bets.
• A faster-than-expected Australian CPI growth has prompted hawkish RBA bets.
• The US Dollar trades higher, while investors await Fed Warsh’s speech.

The Australian Dollar (AUD) is up 0.1% at around 0.7180 against the US Dollar (USD) during the European trading session on Thursday. The Aussie pair remains firm this week due to continued outperformance by the antipodean.

The Australian currency strengthened as financial markets increase hawkish Reserve Bank of Australia (RBA) bets, following the release of the hotter-than-expected Australian Consumer Price Index (CPI) report for July.

RBA hike risk lingers as Australia inflation beats forecasts, lifting AUDUSD

Strategists at OCBC Bank highlight that the latest Australian inflation data were firmer than anticipated, with "Australian headline inflation eased from 3.8% YoY in June to 3.5% YoY in July, while trimmed mean inflation held steady at 3.6% YoY." They note that "both measures came in above market expectations," and point out that "the RBA is targeting an average trimmed mean inflation rate of 3.3% YoY in 2H26, making July's reading an unhelpful start to the second half of the year."

Against this backdrop, persistently firm inflation continues to keep the risk of another rate hike on the table." Market pricing has shifted accordingly: "following the inflation release, markets fully priced an additional 25bp hike by February 2027, up from around a 70% probability beforehand." OCBC adds that this repricing "has helped AUDUSD retest resistance in the 0.7180-0.7200 range."

However, the bank OCBC holds a contrary view to market expectations. “Our base case remains that the RBA has reached the end of its tightening cycle,” OCBC added.

Meanwhile, the US Dollar also trades higher, with investors turning cautious ahead of Federal Reserve (Fed) Chairman Kevin Warsh’s speech at the Jackson Hole Symposium on Friday.

At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.1% higher to near 98.22.

AUD/USD Technical Analysis

In the daily chart, AUD/USD trades around 0.7179, extending its advance above the 20-day exponential moving average (EMA) at 0.7100, which now underpins a constructive near-term bias. The rising EMA suggests the short-term trend remains pointed higher, while the Relative Strength Index (14) at 68.5 hovers just below overbought territory, hinting that bullish momentum is strong but approaching stretched conditions.

On the downside, immediate support is located at the 20-day EMA near 0.7100, where a deeper pullback would be expected to attract buying interest while the broader bullish structure holds. With no nearby technical resistance levels from this dataset, the pair’s topside remains open, although the elevated RSI warns that fresh gains could become more measured as the rally matures.

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

(This story was corrected on August 27 at 17:12 GMT to say RBA instead of Fed in the second bullet point.)

• EUR/GBP trades around 0.8575 on Thursday, virtually unchanged on the day despite a string of encouraging German economic releases.
• German consumer confidence improves for September, while recent growth and business sentiment figures also beat expectations.
• A quiet UK economic calendar leaves the British Pound without a significant domestic catalyst this week.

EUR/GBP trades around 0.8575 on Thursday at the time of writing, virtually unchanged on the day with a modest gain of 0.05%. The Euro (EUR) receives some support from a series of encouraging German economic releases, while the British Pound (GBP) lacks a clear domestic catalyst amid a light United Kingdom (UK) economic calendar.

German consumer confidence improves for September. The GfK Consumer Confidence Index rises to -26.6 from -29.4 in August, beating market expectations of a slight deterioration to -29.6.

These figures add to a string of encouraging economic releases from Germany this week. German Gross Domestic Product (GDP) growth was revised higher to 0.3% on a quarterly basis, matching the expansion recorded in the first quarter. On an annual basis, growth was revised to 1% from the previously estimated 0.9%, accelerating from the 0.4% increase recorded in the previous quarter.

Business sentiment has also improved. The German IFO Business Climate Index rises to its highest level in 12 months, with both the current assessment and expectations components exceeding market forecasts. The recent data therefore provides a more encouraging picture of the outlook for the Eurozone’s largest economy.

Investors now turn their attention to the European Central Bank’s (ECB) Monetary Policy Meeting Accounts, due later on Thursday. Traders will scrutinize the document for fresh clues about the interest rate outlook in the Eurozone.

Meanwhile, the UK economic calendar has remained relatively quiet this week, leaving the British Pound with few domestic drivers. Against this backdrop, EUR/GBP remains broadly stable around 0.8575 as traders weigh improving German fundamentals against the lack of fresh UK economic catalysts.

Euro edges higher against Pound as EUR/GBP rebound tests key resistance

Strategists at Societe Generale note that EUR/GBP has “staged a sharp rebound after carving out an interim low near 0.8450 in July,” but that the recovery has “stalled near 0.8585” with the cross now consolidating in a narrow range. They highlight that “a break above 0.8585 would confirm a broader recovery towards the graphical level of 0.8610 representing the low of May and perhaps even towards the 200-DMA at 0.8660/0.8690,” while “the lower boundary of the recent range at 0.8530 may serve as a short-term support.” In the near term, Societe Generale adds that EUR/GBP is “bid at 0.8575 after yesterday’s close above 50dma (0.8559),” with “the July high of 0.8588” identified as the next resistance.

Rabobank’s FX team also looks for range-bound trading, stating that “we expect further range trading in EUR/GBP over the coming weeks, with a mild upside bias later in the year as fiscal realism weighs and BoE rate hike risk is further priced out.” In the context of the “energy price crisis stemming from the Iran war,” Rabobank argues that the current backdrop is “a better outcome than most forecasters had expected.” The bank reiterates that “it remains Rabobank’s central view that the MPC will continue to side-step a rate hike this year,” and warns that “since the market still sees some risk of higher rates this year, steady policy, in line with our view, could undermine the Pound.” Against this policy backdrop, Rabobank says “we maintain a 3-month EUR/GBP forecast of 0.87.”