Forex News
Citi Mexico released its September “Expectations Survey,” in which most private economists expect the Bank of Mexico (Banxico) to hold rates unchanged, while the exchange rate is forecast to end below the 18.00 threshold by the end of 2026.
The poll showed that most economists expect the main reference rate to be at 6.50% at least until the end of 2027, with the range fluctuating between 6.25% and 6.75%. The USD/MXN is expected to end at 17.50 by the end of the current year, and for the end of 2027, the consensus see the exotic pair at 18.07, down from 18.24.
Regarding inflation, it is expected to finish at 4% for 2026, while the core component is expected to end at 4% as well, according to the survey.
Mexico’s Gross Domestic Product (GDP) is forecast to end 2026 at 1.3%, up from 1.2% YoY, according to the survey. For 2027, respondents expect the economy to grow by 1.8%, as in the previous survey, with estimates ranging from 1.0% to 2.3%.
Banxico FAQs
The Bank of Mexico, also known as Banxico, is the country’s central bank. Its mission is to preserve the value of Mexico’s currency, the Mexican Peso (MXN), and to set the monetary policy. To this end, its main objective is to maintain low and stable inflation within target levels – at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%.
The main tool of the Banxico to guide monetary policy is by setting interest rates. When inflation is above target, the bank will attempt to tame it by raising rates, making it more expensive for households and businesses to borrow money and thus cooling the 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. The rate differential with the USD, or how the Banxico is expected to set interest rates compared with the US Federal Reserve (Fed), is a key factor.
Banxico meets eight times a year, and its monetary policy is greatly influenced by decisions of the US Federal Reserve (Fed). Therefore, the central bank’s decision-making committee usually gathers a week after the Fed. In doing so, Banxico reacts and sometimes anticipates monetary policy measures set by the Federal Reserve. For example, after the Covid-19 pandemic, before the Fed raised rates, Banxico did it first in an attempt to diminish the chances of a substantial depreciation of the Mexican Peso (MXN) and to prevent capital outflows that could destabilize the country.
OCBC’s Christopher Wong notes that recent Thai Baht (THB) strength may slow as external conditions turn less supportive. Governor Vitai’s comments suggest further rate cuts are unlikely without another shock, tempering easing expectations. However, higher US yields, weaker Gold and elevated Oil prices, alongside renewed US–Iran tensions, are seen as drags on THB, even as structural tech and Foreign Direct Investment (FDI) trends offer longer-term support.
External backdrop less supportive for Baht
"THB’s recent outperformance may face some consolidation as the external backdrop turns less supportive."
"However, Friday’s stronger US payrolls lifted UST yields and the USD while weighing on gold, removing some of the external and gold-related support for THB."
"Elevated oil prices are also an increasingly important drag, with renewed US-Iran tensions over the weekend adding to upside risks for energy prices."
"As a net energy importer, THB remains relatively exposed should oil stay elevated."
"USD/THB last closed at 32.94 levels. Mild bullish momentum on daily chart shows signs of fading while RSI fell."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- AUD/USD rises for fourth day as US holiday thins volumes.
- Hormuz deal hopes complicate Oil and Dollar reaction.
- Westpac confidence, RBA speakers and US inflation guide next move.
The Aussie Dollar climbed for the fourth straight day, up 0.22% against the US Dollar, amid thin volumes as US financial markets were closed in observance of the Labour Day Holiday. The AUD/USD trades at 0.7218, after bouncing off daily lows of 0.7194.
AUD/USD gains as softer Dollar offsets Fed hike risks
Sentiment is mixed following Monday’s session, as reflected in European equity markets. The US Dollar Index (DXY), which tracks the performance of the US currency versus a basket of six other currencies, fell 0.26% at 98.90.
The US-Iran conflict escalated, while Tehran announced that a deal with Oman over the Strait of Hormuz is close to being finalized. According to Bloomberg, the deal “will include a temporary safe route through Hormuz, raising questions about how the US would respond after the American military struck Iranian tankers over the weekend.”
Last week, a stellar jobs data report from the US, with Nonfarm Payrolls, exceeding estimates and July’s upwardly revised print, has set the stage for a rate hike by the Fed, after Fed Chair Warsh's remarks on Jackson Hole, that the labour market is “consistent with full employment.”
In Australia, Tuesday’s economic docket will feature the release of the Westpac Consumer Confidence for September, along with Reserve Bank of Australia (RBA) officials crossing the wires. According to ANZ Bank, Sarah Hunter, the RBA’s Assistant Governor and Deputy Governor Andrew Hauser will cross the wires.
In the US, the docket is packed with inflation data, jobless claims and the University of Michigan Consumer Sentiment.
AUD/USD price Forecast: Technica outlook
In the daily chart, AUD/USD trades at 0.7219, keeping a clear bullish tone as it holds above the simple moving average near 0.7045 and tracks an established series of rising trend-line supports. The Relative Strength Index (14) around 68 suggests firm but not yet extreme upside momentum, while price action clings to an ascending trend base, hinting that dips are likely to attract buying interest as long as the pair remains anchored above these structural floors.
On the downside, initial support emerges at the horizontal level around 0.7198, reinforced by a nearby rising trend-line pivot just under 0.72, before the simple moving average comes in lower near 0.7045 as a more significant medium-term floor. With no clearly defined overhead levels in the current dataset, the path of least resistance remains to the upside while AUD/USD holds above these supports, though a break below the 0.72 area would signal a deeper corrective phase back toward the mid-0.70s.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.10% | -0.18% | -1.33% | -0.17% | -0.22% | 0.03% | -0.08% | |
| EUR | 0.10% | -0.07% | -1.25% | -0.10% | -0.13% | 0.11% | 0.03% | |
| GBP | 0.18% | 0.07% | -1.15% | -0.02% | -0.02% | 0.19% | 0.09% | |
| JPY | 1.33% | 1.25% | 1.15% | 1.18% | 1.14% | 1.38% | 1.30% | |
| CAD | 0.17% | 0.10% | 0.02% | -1.18% | -0.05% | 0.18% | 0.08% | |
| AUD | 0.22% | 0.13% | 0.02% | -1.14% | 0.05% | 0.23% | 0.12% | |
| NZD | -0.03% | -0.11% | -0.19% | -1.38% | -0.18% | -0.23% | -0.10% | |
| CHF | 0.08% | -0.03% | -0.09% | -1.30% | -0.08% | -0.12% | 0.10% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
Commerzbank’s Charlie Lay highlights Hong Kong’s first five-year plan to strengthen its position as the leading offshore CNY and cross-border financial centre. Expanded CNY products, enhanced Stock/Bond/Wealth Connect schemes and broader commodity and tech financing aim to deepen two-way capital flows. While near-term USD/CNY impact is limited, the longer-term implications are modestly CNY-positive via greater international usage.
Five-year plan supports CNY use
"Hong Kong plans to deepen its role as the leading offshore CNY and cross-border financial center under its first-ever five-year plan."
"Chief Executive John Lee said the government intends to expand offshore CNY investment and risk-management products and widen mutual market access through Stock Connect, Bond Connect and Wealth Management Connect."
"The measures mark another step toward CNY internationalisation without full capital-account liberalisation. A broader range of offshore CNY assets and hedging instruments, together with expanded Connect programmes, should deepen two-way capital flows."
"This could also make it easier for international investors to hold and manage CNY exposure. More broadly, Hong Kong provides Beijing with a controlled gateway to internationalise the CNY while retaining control over cross-border capital flows."
"For USD/CNY, the near-term impact should be limited, but the longer-term implications are modestly CNY-positive. Deeper offshore liquidity and greater cross-border market access should gradually increase international use of the currency."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- Labour Day closures keep liquidity thin across North America.
- Canada’s weak jobs report fades as Oil supports Loonie.
- US CPI, PPI and sentiment data guide Fed repricing.
The Loonie gains some traction versus the Greenback, while the latter posts modest losses, as US and Canadian financial markets remain closed in observance of Labour Day. Nevertheless, the USD/CAD edges lower by some 0.15%, trading at 1.3813 at the time of writing.
USD/CAD slips as Oil strength offsets soft Canadian jobs.
Last week, employment data in Canada revealed that the economy lost 41.7K workers, while the Unemployment Rate remained steady at 6.4%. This pushed USD/CAD higher as US Nonfarm Payrolls crushed estimates, with July’s print providing a leg-up that has so far been faded.
Last week’s unexpectedly strong Nonfarm Payrolls report for August confirmed Fed Chair Kevin Warsh’s statement that the jobs market is “consistent with full employment.”
Geopolitics are poised to continue to drive price action. The escalation of the US-Iran war increased upward pressure on energy prices, which typically correlate positively with the Canadian Dollar, suggesting further downside for the USD/CAD pair.
USD/CAD to be influenced by interest rate differentials
Given the backdrop, the Federal Reserve is expected to raise rates by 25 basis points, according to Prime Terminal data. Odds are at 63% to hike to 3.75% - 4$, while for holding rates, stand near 37%.
Regarding the Bank of Canada (BoC), money markets had priced in a near 70% chance of a hold at 2.25% and a slim 30% chance of a rate hike.
Although the data was positive and the US Dollar strengthened after NFP, the move faded as investors await US inflation data on the producer and consumer sides on Thursday and Friday, respectively.
Ahead of the economic calendar, it would remain absent in Canada but not so in the US. The release of inflation data on the producer and consumer side, along with jobs data and Consumer Sentiment, will provide clues about the status of the economy.
USD/CAD Price Forecast: Technical Outlook
In the daily chart, USD/CAD trades at 1.3816, maintaining a soft bearish bias as it holds below the clustered simple moving averages around 1.3999 and beneath the descending trend-line resistance drawn from 1.4248, now coming in near 1.3942. The pair still respects an underlying upward support trend line from 1.3526, but a Relative Strength Index (14) reading near 41 hints that rallies remain vulnerable while price stays capped under these overhead levels.
On the topside, initial resistance is seen at the downward resistance trend line around 1.3942, with the simple moving average cluster near 1.3999 acting as the next barrier that would need to be reclaimed to ease the current bearish pressure. On the downside, immediate support aligns with the ongoing upward trend-line zone just under the market around 1.38, with deeper levels traced back toward the former break region near 1.3598 and the trend-line origin around 1.3526 if selling extends.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
ING’s Chris Turner reports that USD/KRW rebounded from 1335 after news that Korea’s National Pension Service may halt or reverse its forward-market Dollar selling. Authorities appear comfortable with recent Won gains after a 15% USD/KRW drop since June. ING favours consolidation in both USD/KRW and USD/JPY, seeing reduced Dollar selling in these pairs supporting the broader Dollar tone.
Won rally seen due for consolidation
"USD/KRW bounced off the lows today at 1335 after news emerged that Korea's National Pension Service could be halting, if not reversing, its USD/KRW sales in the forward market."
"Remember, changes to NPS FX hedging were one of the measures introduced in June to help support the beleaguered won."
"Today's news suggests Korean authorities feel that the won has come far enough for the time being."
"And certainly the 15% drop in USD/KRW since June has been impressive and matches a similar move seen in 2022."
"We tend to favour some consolidation both in USD/JPY and USD/KRW for the time being. And the easing of dollar selling pressure in these two big FX pairs can allow the dollar to find support more broadly."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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