Track market-moving stories before they get noisy

The Japanese Yen (JPY) is down against its major currency peers at the start of the week. In the European trade, the US Dollar (USD) is up 0.17% at around 158.25 against the Asia-Pacific currency.

Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the weakest against the Australian Dollar.

USDEURGBPJPYCADAUDNZDCHFUSD0.16%-0.05%0.11%-0.42%-0.58%-0.27%0.12%EUR-0.16%-0.21%-0.02%-0.55%-0.74%-0.43%-0.02%GBP0.05%0.21%0.17%-0.36%-0.54%-0.24%0.18%JPY-0.11%0.02%-0.17%-0.51%-0.77%-0.36%0.05%CAD0.42%0.55%0.36%0.51%-0.14%0.16%0.56%AUD0.58%0.74%0.54%0.77%0.14%0.31%0.72%NZD0.27%0.43%0.24%0.36%-0.16%-0.31%0.41%CHF-0.12%0.02%-0.18%-0.05%-0.56%-0.72%-0.41%
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 Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

The Japanese currency is under pressure even as Bank of Japan (BoJ) Governor Kazuo Ueda signals that the underlying inflation is close to the 2% target. However, Ueda stated that “anchoring core inflation near 2% growth more crucial.”

Ueda leans cautiously hawkish as inflation loop firms and JGB guidance stays vagueUeda scores 7/10 on FXS Speechtracker versus a 7.4/10 historic average, but the emphasis on “underlying inflation near 2%” and a positive wages–prices loop marks a mildly hawkish tilt for the YEN. The focus on demand-led inflation from robust global AI-related capex, tight domestic labor markets, and the warning that long-term rates could rise if the policy rate is not adjusted properly all support a gradual normalization bias that can underpin YEN yields.

At the same time, Ueda stresses that financial conditions remain accommodative, confirms no shift in the fundamental bond taper approach, and refuses to preannounce emergency JGB measures, which tempers the hawkish tone. For FX, the combination of firmer inflation dynamics and data-dependent rate guidance is modestly supportive for the YEN, but the lack of explicit tightening timelines and the pledge to stabilize the JGB market limit immediate upside and keep carry trades only cautiously challenged.

This week, investors will focus on National Consumer Price Index (CPI) data for September, which will be released on Friday.

Meanwhile, the US Dollar trades slightly higher as French fiscal concerns resurface. As of writing, 10-year French bond yields are up 0.56% to near 4.88% amid civil unrest in France. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.12% higher to near 101.90.

USD/JPY Technical Analysis

In the daily chart, USD/JPY trades at 158.20, holding the short-term Moving Average Exponential (20, close) at 157.87. The pair is inside the Symmetrical Triangle formation, reflecting broader indecisiveness among investors.

The Relative Strength Index (14) at 53.92 sits in neutral-positive territory, hinting that upside momentum is steady rather than stretched, leaving room for the pair to consolidate gains while staying supported by the underlying trend.

On the downside, initial support is reinforced by the 20-period exponential moving average near 157.87. A major action in the pair will likely only after a decisive break of the volatility contraction pattern on either side. The pair could slide to 156.00 if the formation breaks on the downside. Looking up, the pair would aim to revisit the 160.00 hurdle if it manages to break the immediate hurdle near 159.00.

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

Economic Indicator

National CPI ex Fresh Food (YoY)
Japan’s National Consumer Price Index (CPI), released by the Statistics Bureau of Japan on a monthly basis, measures the price fluctuation of goods and services purchased by households nationwide excluding fresh food, whose prices often fluctuate depending on the weather. The YoY reading compares prices in the reference month to the same month a year earlier. Generally, a high reading is seen as bullish for the Japanese Yen (JPY), while a low reading is seen as bearish.

Read more.

Eurozone annual inflation rose to 3.8% in September from 3.2% in August – the highest level in recent months. Energy prices increased by 18.9% year-on-year, while services inflation stood at 3.2%.

US CPI accelerated to 3.7% in September from 3.4% in August. The energy index rose by 5.2% over the month, with gasoline prices up 9.1%. Core CPI stood at 2.6%.

Budget negotiations have begun in the French parliament, but with no stable ruling majority and the political crisis dragging on, EUR/USD could fall to 1.05 in a worst-case scenario. UBS forecasts that EUR/USD will recover to 1.16 by year-end.

The 10-year US Treasury yield has climbed above 5.30%, giving the dollar a significant yield advantage. Dollar-denominated assets remain more attractive than European assets, supporting capital inflows to the US.

The Middle East conflict remains the largest source of uncertainty, supporting energy inflation and demand for the US dollar as a safe-haven currency.

EUR/USD is under triple pressure from a hawkish Fed, France’s fiscal crisis and geopolitical risks. The ECB appears more cautious than the Fed, widening the interest rate differential in favour of the dollar. This week’s key events are the Fed meeting on 27–28 October and the ECB meeting on 28–29 October.

Technical analysisOn the H4 chart, EUR/USD remains in a downtrend, within which the market completed another downward wave around 1.1112. The subsequent upward move allowed the pair to recover towards resistance at 1.1270. A consolidation range is currently forming below this level. The rise is viewed as a corrective wave within the main downtrend. The correction is expected to end, followed by another downward move towards 1.1178. A break below this support would open the way towards 1.1083 and then 1.0888. An alternative scenario envisages a break above resistance at 1.1270, with the correction continuing towards 1.1379. The MACD indicator is in positive territory, although the upward momentum could weaken.

On the H1 chart, a local corrective structure is developing following the completion of the upward move from 1.1112 towards resistance at 1.1270. The market is currently consolidating below 1.1236. During the upcoming trading session, the corrective rise is expected to end, followed by a decline towards 1.1178. A break below this level would open the way towards 1.1130 and then 1.1096. The Stochastic oscillator is in overbought territory, with its signal line turning downwards, indicating that the current correction may be nearing its end. The priority scenario for today remains a decline after a local high forms below resistance at 1.1236. Confirmation would come from a close below the nearest intraday support, followed by increased selling pressure towards the stated targets.

ConclusionEUR/USD remains under triple pressure from a hawkish Fed, France’s fiscal crisis and geopolitical risks, with the widening interest rate differential favouring the dollar. Eurozone inflation rose to 3.8% in September, while US CPI accelerated to 3.7%, but the ECB’s more cautious stance compared with the Fed continues to weigh on the euro. The 10-year US Treasury yield above 5.30% increases the dollar’s appeal and supports capital inflows to the US. The upcoming Fed and ECB meetings will be the key catalysts, with the pair vulnerable to further downside if the correction ends. Technically, the bearish structure remains intact, with a decline towards 1.1178, 1.1083 and potentially 1.0888 likely if support breaks. A break above 1.1270 would extend the correction towards 1.1379, but the broader trend remains downward.

ING’s Francesco Pesole says EUR/USD is modestly undervalued versus short-term fair value around 1.137–1.139, but ongoing French fiscal concerns and protests may limit gains. He sees risks as balanced, with downside from France and upside from further AI-related pressure on Fed expectations, and keeps a one-month EUR/USD target at 1.130.

French protests and AI keep risks balanced
"EUR/USD briefly dropped back below 1.120 overnight before inching higher again this morning. The move in short-term rate differentials has pushed our short-term fair value estimate for EUR/USD higher to around 1.137-1.139. The current undervaluation is therefore around 1.3-1.5%, broadly consistent with French fiscal risk remaining very much present, as reflected in the 10yr OAT-Bund spread hovering around 135-140bp."

"Markets have appeared tentatively more relaxed about the budget situation. Still, continued widespread protests in France over the weekend should weigh on domestic stocks and could spill over into the bond market. We doubt that is enough to drive further sustained widening per se, but it may limit EUR/USD's ability to return to Friday's levels."

"On the macro side, the highlight of the week is Friday's PMI release. Expectations are for a modest softening in the eurozone composite figure, while remaining well inside expansionary territory. Tomorrow, Germany's ZEW index will be in focus."

"The balance of risks for EUR/USD is fairly even at this stage. Downside risk continues to stem from France, although it has abated somewhat as of late, while the upside comes from further AI concerns hitting Fed rate expectations. Our month-ahead target remains 1.130."

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

The New Zealand Dollar (NZD) stands its ground against the US Dollar (USD) at the start of the week, as positive data from China offset the downbeat New Zealand Trade Balance earlier in the day. The NZD/USD pair maintains its immediate bullish trend, trading at 0.5660, just below three-week highs and with bulls looking at the late September highs at 0.5990.

Data from China, New Zealand’s main trading partner, revealed that the country’s Gross Domestic Product (GDP) grew at a 4.5% pace in the third quarter, beyond the second quarter’s 4.3% growth and beating expectations of a 4.4% increase. Beyond that, Retail Sales rose 1.1% in September, more than twice the market consensus, easing concerns about the country’s weak domestic demand.

In New Zealand, on the contrary, the trade deficit widened to NZD 1.97 billion in September, from NZD 1.54 billion in August. Also on Monday, the NZ Business PSI, a gauge measuring the services sector’s performance, showed a moderate slowdown, to 50.9 in September from a downwardly revised 51 in the previous month, with businesses showing concern about political uncertainty ahead of the elections and the higher cost of living.

The US Dollar has opened the week in the same bearish trend seen in the previous one. US inflation figures revealed that prices remain well above the Federal Reserve's (Fed) target. Central bank policymakers, however, requested some more time to assess the impact of September's rate hike, which hints at a pause in the October 29-29 monetary policy meeting.

Technical Analysis: Bulls remain in control while above 0.5930

NZD/USD trades at 0.5659, holding a constructive near-term bullish bias as it consolidates above previous highs in the 0.5630-0.5640 area. Momentum conditions favor the upside, with the Relative Strength Index hovering in the low 60s and the Moving Average Convergence Divergence (MACD) line holding in positive territory, which together suggest buyers retain control.

The immediate target is the September 24 and 28 top at 0.5660. Further up, the September 22 high, at the 0,5750 area, would come into focus. On the downside, a bearish reversal below the 1.5130 area (October 6, 14 and 15 highs) would increase pressure towards last week's lows at the 0.5590 and 0.5565 areas.

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

The GBP/USD pair holds steady around 1.3330 during the early European trading hours on Monday. Traders continue to assess the US interest rate path after Federal Reserve (Fed) Chair Kevin Warsh’s remarks. All eyes will be on the UK jobs data on Tuesday. On Wednesday, the UK Consumer Price Index (CPI) inflation report will be in the spotlight.

During the 2026 IMF-World Bank annual meetings in Bangkok on Friday, the Fed Chairman said that he does not "prejudge" interest-rate decisions, giving no preview of whether the central bank will hike or hold short-term rates steady at its upcoming October 27-28 meeting.

Fed funds futures are pricing an implied 84% chance that the US central bank stays on hold at its next two-day meeting on October 28, according to the CME FedWatch tool.

UK economic data later this week are likely to help seal the deal on the first rate hike from the Bank of England (BoE) in over three years in November. “We expect a 25-basis-point hike at the central bank’s next meeting in November. We also see another move in February,” said Bloomberg Economics chief UK economist Dan Hanson.

Pound resilience masks growing UK consumer strains and rate repricing risksAnalysts at MUFG note that the Pound “continues to show resilience,” with recent economic data reinforcing expectations of further monetary tightening by the BoE. They point out that the Pound is “roughly unchanged versus the US Dollar since the end of June,” with only the energy-linked CAD and NOK outperforming, alongside the Yen, which has been supported by “yen buying intervention by the MoF, with assistance from the US.” In this context, MUFG argues that “the pound has done well on the back of improving sentiment and evidence of economic resilience.”

That resilience has been underpinned by stronger-than-expected growth figures. MUFG highlights that “the GDP data again was stronger than expected – the m/m gain of just 0.1% was modest but still better than expected, helping the 3mth/3mth rate to 0.7%, 0.2ppt stronger than expected.” They add that the three‑month gain “was helped by services activity,” although the “one-month reading was flat in August and could be a sign of weakening momentum.” Within services, the breakdown “showed consumer-facing weakness,” while a Bloomberg Intelligence survey “indicated vulnerabilities that could see a slowing in the months ahead.”

Those vulnerabilities are already showing up in credit dynamics. MUFG flags that the BoE’s quarterly Credit Conditions Survey “revealed an increase in defaults on credit card debt for the sixth consecutive quarter underlining the increased strains on UK consumers.” Despite this, “these exposures are increasing with consumer credit up GBP 2.5bn in August to a new record high.” MUFG cautions that “if rates remain around these levels, it’s very likely that these figures will deteriorate further in the final quarter of the year.”

As a result, the bank sees a tension between the recent data and the outlook. “So while the backdrop of the economic data has been positive, the outlook does point to increasing risks,” MUFG writes. They note that “the OIS market indicates 100bps of tightening is priced by next September” but reiterate that “we continue to doubt the BoE delivering that, especially following the comments from Chief Economist Huw Pill who stated this week that he is sceptical that the UK will require four 25bp rate hikes.” Even so, MUFG concedes that “it will be difficult for the markets to adjust lower given the global backdrop of higher rates.”

In their view, this leaves the Pound exposed if the global rate environment turns. “In circumstances of a broader move back lower in rates, UK rates could fall more notably,” they argue, warning that “the pound remains vulnerable to signs that recent economic resilience could be undermined by the notable move higher in yields.”

Bailey frustration on inflation keeps GBP supported but cautiousFXS Speechtracker scores this speech at 6.2, slightly below Governor Bailey’s historic 6.4 average, pointing to a marginally softer tone overall. Bailey’s frustration with above-target UK inflation and comments that the economy is “more resilient than we expected, not as strong as we need” lean mildly hawkish, as they keep the door open to maintaining restrictive policy for longer.

However, remarks that it is “too early to form strong views on the strength of 2nd round effects” and that such effects are “subdued” with businesses focused on cost cutting temper the hawkishness. For GBP, the mix suggests limited immediate upside, with support from ongoing inflation concerns but capped by caution over second-round dynamics and external risks such as Middle East-driven moves in UK gilt yields.

Technical Analysis: GBP/USD remains capped under the 100-day SMAIn the daily chart, GBP/USD holds below the 100-day simple moving average (SMA) and thus retaining a capped, mildly bearish near-term bias. Price is hovering just under the upper Bollinger Band, suggesting upside attempts are meeting supply, while the Relative Strength Index (RSI) at 52.4 has turned neutral, hinting that recent recovery momentum is losing traction rather than evolving into a sustained bullish trend.

On the topside, initial resistance level is aligned at the upper boundary of Bollinger Band around 1.3335, with a more meaningful barrier at the 100-day SMA at 1.3390. A daily close above this level could see a rally to the September 9 high of 1.3568. 

On the downside, the Bollinger middle band, a 20-day SMA now around 1.3250, offers the first layer of support ahead of the lower band near 1.3165. A breach of the mentioned level could expose the November 20, 2025 low of 1.3038.  

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

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.

The AUD/JPY cross attracts some follow-through buyers for the second straight day on Monday, recovering further from an eight-month low, around the 108.65-108.60 region, touched last week. Spot prices climbed back above the 110.00 psychological mark during the Asian session amid a combination of supporting factors.

The Australian Dollar (AUD) gets a minor lift in reaction to Reserve Bank of Australia (RBA) Assistant Governor Chris Kent's hawkish remarks and China's better-than-expected Gross Domestic Product (GDP), showing that the economy expanded by 4.5% YoY in the third quarter. The Japanese Yen (JPY), on the other hand, is undermined by cautious Bank of Japan (BoJ) expectations, acting as a tailwind for the AUD/JPY cross. Traders, however, remain on high alert that Japanese authorities might step in again to prop up the domestic currency. This, in turn, warrants some caution for bullish traders.

From a technical perspective, spot prices retain a bearish near-term bias beneath the 200-period Simple Moving Average (SMA) on the 4-hour chart and a dense Fibonacci retracement band overhead. This, in turn, suggests that rallies could be sold into despite a mildly constructive backdrop from the Relative Strength Index around 52 and a modestly positive Moving Average Convergence Divergence (MACD) reading. The AUD/JPY cross currently trades just under the 38.2% retracement at 110.17, and the next relevant hurdle is pegged near the 50.0% level at 110.63 ahead of the 200-period SMA at 110.93.

Further up, the 61.8% retracement at 111.10 could cap the currency pair ahead of 111.76 and 112.61. On the downside, immediate support is seen at the 23.6% retracement near 109.59, with a break below exposing the recent swing low around 108.66 as the next significant bearish target.

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

AUD/JPY 4-hour chart

Economic Indicator

Gross Domestic Product (YoY)
The Gross Domestic Product (GDP), released by the National Bureau of Statistics of China on a monthly basis, is a measure of the total value of all goods and services produced in China during a given period. The GDP is considered as the main measure of China’s economic activity. The YoY reading compares economic activity in the reference quarter compared with the same quarter a year earlier. Generally speaking, a rise in this indicator is bullish for the Renminbi (CNY), while a low reading is seen as bearish.

Read more.

Last release:
Mon Oct 19, 2026 02:00

Frequency:
Quarterly

Actual:
4.5%

Consensus:
4.4%

Previous:
4.3%

Source:

Euro Technical Forecast: EUR/USD Weekly Trade Levels EUR/USD has fallen more than 5% from the August high, with the latest rebound snapping a five-week losing streak. The decline has reached a major technical support confluence, raising the prospect of a larger price inflection. Weekly momentum has deteriorated and although the broader bearish outlook remains intact, the bears may be vulnerable above critical support. Bulls face significant overhead resistance, with a stronger recovery needed to suggest a more meaningful low is in place. Eurozone and U.S. PMI data headline next week's event risk ahead of the Fed and ECB rate decisions later this month. Resistance 1.1276, 1.1355/65 (key), 1.1483- Support 1.1110/63 (key), ~1.1030s, 1.0905 EUR/USD enters the second half of October at a critical technical juncture after sustained selling pressure drove the pair to its lowest levels in 17 months. The latest recovery offers an initial sign of stabilization, but the broader downtrend remains firmly intact as buyers confront significant resistance overhead. With weekly momentum deeply stretched, the immediate focus is on whether Euro can build on this initial rebound or whether renewed selling pressure triggers another leg lower. Battle lines drawn on the EUR/USD weekly technical chart.

Review my latest Weekly Strategy Webinar for an in-depth breakdown of this EUR/USD setup and more. Join live on Monday’s at 8:30am EST.

Euro Price Chart – EUR/USD Weekly

Chart Prepared by Michael Boutros, Sr. Technical Strategist; EUR/USD on TradingView

Technical Outlook: In last month’s Euro Q4 Outlook we noted that EUR/USD was trading into a pivotal support into the close of Q3 and that, “From a trading standpoint,  rallies would need to be limited to 1.1578 IF price is heading for a break lower on this stretch with a close below 1.1355 needed to fuel the next major leg of the decline.” Euro broke below support the following week with price plunging more than 5.1% off the August highs. The decline has already extended into the next major support barrier with EUR/USD snapping a five-week losing streak on Friday.

The support zone in focus is 1.1110/63- a region defined by the 38.2% retracement of the broader 2022 advance, the 2024 high-week close (HWC), and the 2025 May low-week close (LWC). Weekly RSI has now fallen to the lowest levels since January of 2025 and while the momentum profile continues to favor the bears, the downtrend remains vulnerable while above this key threshold.   

Initial resistance is eyed at the 2023 swing high at 1.1276 and is backed by bearish invalidation at the 38.2% retracement of the 2025 advance and the April 2025 high week close at 1.1355/65. A breach / weekly close above this key pivot zone is needed to suggest a more significant low is in place and a larger reversal in underway. Subsequent resistance objectives are eyed at the median line of the yearly downtrend (currently near ~1.1430s) and the 61.8% retracement of the August decline at 1.1483.

A break below last week’s low would keep the focus on the lower parallel of the yearly downtrend which converges on the 25% parallel of the broader 2025 uptrend near ~1.1030s. Look for a larger reaction there IF reached with a break / weekly close below likely to trigger another accelerated decline. Subsequent support objectives rest with the 61.8% retracement at 1.0905.

           

Bottom Line: EUR/USD responded to a major support zone last week and while the broader outlook remains weighted to the downside, the decline may be vulnerable while above this level. From a trading standpoint, rallies would need to be limited to 1.1355/65 IF price is heading lower on this stretch with a close below 1.1110 needed to fuel the next leg of the decline.

EUR/USD event risk is concentrated at the end of next week, with euro-area flash consumer confidence due Thursday and preliminary October PMIs on Friday. The PMI release will be the key test of whether the recent improvement in euro-area activity is holding into the fourth quarter and could directly shape expectations ahead of the ECB’s October 29 meeting. On the U.S. side, September housing data and the October flash PMIs are also due, while Fed officials remain in their blackout period ahead of the October 27–28 decision. The result is a data-heavy Friday where any divergence between European and U.S. activity could produce a sharp move in EUR/USD. Stay nimble into the releases watch the weekly close for directional guide. I’ll publish an updated Euro Short-term Outlook once we get further clarity on the near-term EUR/USD technical trade levels.

Key EUR/USD Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

Active Weekly Technical Charts Swiss Franc (USD/CHF) Gold (XAU/USD) US Dollar Index (DXY) Canadian Dollar (USD/CAD) Australian Dollar (AUD/USD) S&P 500, Nasdaq, Dow Japanese Yen (USD/JPY) Bitcoin (BTC/USD) British Pound (GBP/USD) --- Written by Michael Boutros, Senior Technical Strategist

Follow Michael on X @MBForex

Dollar-Rupee Rebounds Towards 95 as Rupee Recovery Divides Banks
UBS expects the Indian Rupee to weaken against the US Dollar in 2027, while Crédit Agricole sees recovery if overseas rate and oil pressures ease.
The US Dollar recovered towards 95 Indian Rupees on Friday.

USD/INR stood at 94.9614 at 20:43 BST, up 0.46% on the day but still 1.59% lower over five days.

Image: USD to INR exchange rate 1-month chart 16/10/2026

UBS expects the exchange rate to reach 97 by September 2027, reversing that recent improvement in the Rupee.

Crédit Agricole projects 92 for the same month, leaving a five-Rupee gap between the banks' expectations of what one US Dollar will buy.

Both foresee some renewed Rupee weakness before the end of 2026, but their paths then diverge as Crédit Agricole anticipates a recovery and UBS projects gradual depreciation through next year.

A sustained Rupee recovery would require external pressures to ease beyond the immediate support provided by the Reserve Bank of India.

Crédit Agricole's own assessment is cautious about relying on intervention, despite its more optimistic currency forecast.

David Forrester, the bank's senior FX strategist, wrote earlier this week: "The INR's problems are primarily structural rather than speculative and include rising oil prices, Fed rate hikes and the sharp sell-off in USTs eroding Indian government bonds' rate advantage and investor portfolio outflows as foreign investors remain bearish on Indian equity markets, despite 7-8% real GDP growth."

India's trade figures offer some relief
The latest official September trade figures, released after that assessment, give a more mixed picture than an uninterrupted deterioration in India's external position.

Goods imports exceeded exports by $30.21bn, although that was narrower than the $33bn deficit a year earlier.

An estimated services surplus reduced the combined goods-and-services deficit to $13.30bn, also slightly smaller than a year before.

These are trade figures, rather than a complete measure of the current account, and September's services numbers remain estimates.

Export earnings provide a counterweight to import-related Dollar demand, although purchases abroad still exceeded goods-and-services receipts in September.

The RBI's special Dollar window for state-owned oil companies moves some of their purchases away from ordinary market trading, while tighter derivatives rules target speculative activity.

Forrester cautions: "Importantly, earlier clamp-downs on speculative activity have already reduced this activity and so RBI is addressing an increasingly smaller part of the INR's problems."

That limitation also ran through Exchange Rates UK's earlier examination of the oil-company facility, which distinguished calmer trading from a lasting reduction in pressure on the Rupee.

Why Crédit Agricole still expects a stronger Indian Rupee
The bank's recovery case relies on a less demanding overseas backdrop, including a smaller rise in US interest rates than markets had anticipated.

That assessment preceded the US inflation release and subsequent swings in Treasury yields.

Forrester wrote: "The larger potential surprise is on the US side, where our US economist expects the Fed to skip hiking at its October meeting and anticipates only two more 25bp rate hikes, to take the Fed Funds rate to a peak of 4.50%."

Friday's broader Crédit Agricole analysis continued to describe expected Fed tightening as excessive, even after the inflation figures.

For the Indian Rupee, lower-than-expected US yields would help preserve the relative income available from Indian bonds, reducing one reason for investors to favour Dollar assets.

Another Indian rate rise would offer less of a surprise under Crédit Agricole's assumptions.

Forrester says: "We expect another two 25bp rate hikes by RBI, taking the Repurchase rate to 6.00% and modestly into restrictive territory. This outlook is about in line with the market pricing following the RBI meeting outcome and so would not move the INR much if realised."

The RBI's October policy decision raised its repo rate to 5.50% and left subsequent action dependent on growth and inflation, rather than promising an uninterrupted series of increases.

Oil supplies a second condition for recovery, with Crédit Agricole expecting some relief for India's import bill.

Forrester wrote earlier this week: "Our oil analyst forecasts Brent to average USD95/bl in the coming six months as the US and Iran continue their "cold war" via economic blockades. Such an outcome would be modestly positive for the INR."

Crédit Agricole plans to reassess its longer-term Rupee forecasts after the US midterm elections, when it expects greater clarity on the direction of US policy towards Iran and the implications for oil prices.

Capital flows present a harder question for the bullish Rupee case.

Forrester wrote: "Despite 7-8% real GDP growth, investors remain bearish Indian equity markets. Portfolio managers continue to see India as behind the curve on AI and even subject to downside risks to growth as the technology reduces the demand for the country's IT and business consultancy exports."

He also identified a potential offset: "The only positives on this front are that India's IT and business consultancy exports remain strong and that some investment managers are looking at Indian equities as a hedge against the bursting of the AI bubble."

USD/INR Exchange Rate FAQ
What is UBS's Indian Rupee forecast?

UBS projects USD/INR at 97 by September 2027, implying a weaker Rupee than Friday's rate near 94.96.

Why does Crédit Agricole expect a different outcome?

Its forecast of 92 for the same month relies on less US rate tightening than previously priced and some relief from oil costs, alongside India's policy support.

Scotiabank analysts highlight that Bank of England Governor Bailey sees little evidence of second-round inflation effects and a more resilient UK economy, with markets still pricing a 25bp hike next month. Technically, GBP/USD has rebounded strongly from mid-week lows, forming a bullish weekly outside range and opening scope to retest the 1.3650–1.3675 area, with key resistance at 1.3435.

Pound recovery points to range highs"BoE Governor Bailey remarked that there was little evidence yet of second-round inflation effects in the UK while noting that the UK economy was more resilient than expected. The comments had no impact on OIS, with swaps still all but fully committed to a 25bps rate hike early next month."

"Elsewhere, Chancellor Healey will reportedly increase the corporation tax bank surcharge from 3% to 8% as part of next week’s budget in a bid to shore up UK public finances."

"Bullish – Solid GBP gains from Wednesday’s post-US CPI low have driven Cable back to the mid-1.33 area. A clear, bullish reversal is forming on the weekly chart as a result (a major outside range week)."

"With recent price action basing around the low point of the sideways range in place since April, the pound’s rebound suggests gains may extend to retest the upper end of the range (1.3650/75) in the coming weeks. Initial, key resistance sits at 1.3435 (200-day MA)."

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

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Summary:

USD/JPY rate is stuck between 157.40 and 159.00, caught between high US bond yields and worries about Japanese currency intervention. This long period of consolidation suggests a cautious global risk outlook. Markets aren't strongly risk-on or risk-off, but waiting for clearer policy direction. For a sustained move to happen, new economic catalysts are needed. If the pair closes above 159.00, it would aim for 160.00. The USD/JPY currency pair spent much of October locked in a tight range, generally holding within 157.40 and 159.00.

This sideways action contrasts sharply with the year’s earlier, more volatile trends. It prompts questions about the factors currently stabilizing the pair and whether a decisive break is likely in the coming week.

What’s Keeping the Pair Contained? A few opposing forces are pulling at the pair. The substantial interest rate gap between the U.S. and Japan keeps propping up the dollar. Even with some recent shifts in policy outlooks, this rate difference remains wide enough to fuel carry trades, stopping the yen from gaining much ground.

At the same time, Japanese officials have shown they’re sensitive to the pair nearing 160. Warnings from financial leaders and the market’s memory of past interventions have reliably kept upward moves in check, especially around the top of the current range.

Japan’s Finance Minister said Tokyo and Washington are on the same page and ready to act quickly. This warning isn’t taken lightly. A prior coordinated U.S.-Japan intervention caused the yen to jump, reaching 155 after being above 163. About half of those gains later faded. Now, market players see 160 as a significant level. Sell orders are clustered around 158.20 and 158.35.

Support for the range’s bottom comes down to central bank policy timing. The interest rate difference between the Federal Reserve and the Bank of Japan (BoJ) remains quite large.

With U.S. 10-year Treasury yields staying high after stronger-than-expected inflation numbers, holding U.S. dollars offers a clear yield advantage through carry trades compared to the yen’s low yields. This yield difference helps cushion against sharp drops and maintains a solid floor around 157.40.

U.S. inflation data is high, yet that hasn’t changed market expectations much for an immediate Fed rate hike. Chances of an October increase are about 40% or less.

The BoJ, however, isn’t reportedly planning a rate change in October, even though markets see an 88-90% chance of a December hike. This situation holds back the dollar’s climb and gives the yen little reason to strengthen much right now.

Could We See A Breakout Next Week? A breakout of the 157.40-159.00 channel next week is possible, but it’d probably need a major fundamental event.

Upcoming U.S. producer prices and speeches, including one from Fed Chair Kevin Warsh, might cause some short-term price swings. These usually reverse quickly, though. There aren’t any big economic events scheduled for next week that look like they’ll really move the market.

Without any big triggers, the market will probably just keep moving within its current range. Traders are focusing on range-bound strategies ahead of the central bank meetings later in October.

What’s keeping USD/JPY below 159.00?

Japan’s warnings and a previous joint intervention with Washington make traders wary of pushing the pair toward 160.

What does the sideways pattern tell us about global risk sentiment?

This sideways movement suggests a cautious, wait-and-see attitude. Investors aren’t finding strong reasons to lean into either risk-taking or risk-aversion, holding out for clearer signals from major central banks.

When is a breakout more likely?

A breakout will likely happen around the Fed’s October 27-28 and BoJ’s October 29-30 meetings. Next week seems pretty calm, with few major catalysts on the schedule.

The Canadian Dollar (CAD) maintains its firm tone on Friday, buoyed by elevated Oil prices, while the US Dollar (USD) struggles amid lower US Treasury yields and dovish comments by Fed speakers. The USD/CAD pair trades at session lows just below 1.4170, under growing bearish pressure, after breaching the 1.4200 support area on Thursday. 

US producer inflation data released on Thursday confirmed that price pressures remain high, and Retail Sales beat expectations. The impact of these releases on the US Dollar, however, was limited, as Federal Reserve (Fed) officials suggested earlier this week that the bank will stand pat on rates in October to assess the impact of September’s interest rate hike.

The Federal Reserve Chairman, Kevin Warsh, spoke at the International Monetary Fund (IMF) forum in Bangkok earlier on Friday but failed to give any clear hints about the timing of the next rate hike. 

Bank of Canada (BoC) Governor, Tiff Macklem, also speaking at the IMF forum, highlighted that the BoC is one of the few major central banks lagging in the global monetary tightening cycle, but that "the longer this goes, the harder that gets,” opening the door for an interet rate hike in the coming months.

Technical Analysis: bears are testing support at 1.4160

USD/CAD trades at 1.4166, retaining a mildly negative tone with bears testing support around the 1.4155 area. The 4-hour Relative Strength Index (14) near 35 suggests waning upside momentum, while the Moving Average Convergence Divergence (MACD) remains negative, reinforcing the idea that rebounds are likely to struggle beneath the 1.4200 level.

If the mentioned 1.4155 (September 29 high, October 2 low) gives way, sellers are likely to be attracted by the 38.2% Fibonacci retracement of the September-October rally, in the 1.4100 area.

Upside attempts, on the contrary, are likely to be tested at the previous support area around 1.4200 (October 6, 9 and 13 lows). Above here, the focus would shift back to the 17-month highs around 1.4300, which have capped bulls several times in October

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

Canadian Dollar Price Today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the Japanese Yen.

USDEURGBPJPYCADAUDNZDCHFUSD-0.18%-0.28%0.05%-0.13%-0.56%-0.78%-0.22%EUR0.18%-0.12%0.20%0.03%-0.37%-0.62%-0.05%GBP0.28%0.12%0.32%0.17%-0.27%-0.49%0.07%JPY-0.05%-0.20%-0.32%-0.16%-0.59%-0.79%-0.26%CAD0.13%-0.03%-0.17%0.16%-0.42%-0.70%-0.10%AUD0.56%0.37%0.27%0.59%0.42%-0.23%0.36%NZD0.78%0.62%0.49%0.79%0.70%0.23%0.59%CHF0.22%0.05%-0.07%0.26%0.10%-0.36%-0.59%
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 Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).

United Overseas Bank’s Quek Ser Leang and Lee Sue Ann highlight that EUR/USD has rebounded strongly from 1.1112 to close at 1.1218, more than reversing the prior day’s losses. Short-term momentum looks overextended, with the pair expected to trade between 1.1180 and 1.1240 intraday. On a 1–3 week view, EUR is now seen in a broader 1.1160–1.1280 range after breaking 1.1220 resistance.

Euro-Dollar shifts into consolidation band"24-HOUR VIEW: EUR plunged two days ago and then rebounded strongly to close at 1.1156 (-0.38%). When EUR was at 1.1180 in the early Asian session yesterday, we indicated that “the recovery has scope to extend but any advance should stay within a 1.1155/1.1205 range.” We were incorrect, as EUR rose to 1.1240 before easing slightly to close 0.56% higher at 1.1218. The sharp advance appears to be overextended. This, combined with early signs of slowing momentum, suggests EUR is unlikely to rise much further. Today, we expect EUR to trade in a range between 1.1180 and 1.1240."

"1-3 WEEKS VIEW: We have been holding a negative EUR view for more than a month. After EUR dropped to 1.1112 and rebounded strongly, we highlighted the following yesterday (15 Oct, spot at 1.1180): “Further EUR weakness is not ruled out, but the decline from last month appears to be overextended, both time-wise and price-wise. However, only a breach of 1.1220 ( ‘strong resistance’ level) would mean that EUR is not declining further.” EUR subsequently rose and broke above 1.1220 with a high of 1.1240. EUR has likely entered a range-trading phase, and for the time being, it is likely to trade between 1.1160 and 1.1280."

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

Euro to Dollar Forecast: US Yields Hold Key to Analyst's Recovery View The Euro could recover against the US Dollar if Treasury yields retreat, UniCredit says, but French fiscal concerns are likely to constrain the rebound. A retreat in US Treasury yields could give the Euro breathing room after its recent sell-off, according to UniCredit, although the bank doubts that lower American borrowing costs alone would restore EUR/USD to 1.14.

EUR/USD traded near 1.1212 on Thursday afternoon, about 0.15% above Wednesday's close.

Latest-Exchange Rates:

Euro to Dollar (EUR/USD): 1.121453 (+0.17%)

Pound to Dollar (GBP/USD): 1.326362 (+0.24%)

Dollar to Yen (USD/JPY): 157.99011 (+0.02%)

The recovery follows a sharp reversal in bond markets after US consumer inflation initially sent Treasury yields higher, before an equity sell-off encouraged investors to buy government debt.

UniCredit's FX strategist Roberto Mialich sees scope for that yield relief to support the currency, but France's public-finance difficulties have weakened the case for a fuller recovery.

His assessment offers a counterpoint to MUFG's conditional warning about a break below 1.10, which linked further Dollar strength to higher US short-term yields.

US yields have set the direction UniCredit argues that the rise in American yields has mattered more for the Euro's recent direction than changes in the gap between US and German borrowing costs.

Mialich writes: "Hence, we can argue that the rise in the 10Y UST yield has determined the direction and the decline of EUR-USD, while the yield spread between the 10Y Bund and the UST has influenced the speed of the decline."

Mialich adds: "Despite the sharp rise in the 10 UST yield, EUR-USD has only lost around 5%, as the corresponding rise in the 10Y Bund yield has prevented a more intense fall of the common currency"

Higher German returns have helped offset the appeal of US bonds.

Mialich writes: "In addition to the clear relationship visible in the chart, the results of our calculation are quite comforting: correlation is over -0.60, suggesting that a rise in the 10Y UST yield tends to be sufficiently EUR-USD negative and vice versa."

Mialich cautions that German-US yield spreads could exert a stronger influence again.

His recovery case depends on a meaningful retreat in US yields: "Still, if the soaring 10Y UST yield retreats from its current levels after reaching a twenty-year high of 5.3645% on 7 October and moves towards 5.00%/4.80% (the values prevailing in early September, before the bond market selloff), the EUR-USD decline may take a breather."

Fresh US inflation tests that recovery case Thursday's producer-price release makes it harder to assume that inflation will permit a sustained fall in yields.

US producer prices rose 1.3% in September, while the measure excluding food, energy and trade services increased 0.5%.

Those results arrived after UniCredit's assessment, which incorporated Wednesday's consumer-price surprise but not the subsequent producer figures.

Mialich explains the bank's policy assumption: "Note that such a correction in the 10Y UST yield would be in line with our baseline scenario, which includes just one more rate hike by the Fed this year and steady rates in 2027, the same picture New York Fed President John Williams depicted overnight."

If investors instead conclude that inflation requires a longer tightening cycle, the expected relief for EUR/USD could prove short-lived.

Buying Treasuries during a stock-market decline can lower yields temporarily without resolving that policy risk.

Even if US yields do fall, UniCredit does not expect the Euro simply to recover its early-September trading range.

Mialich writes: "However, lingering political tensions across the eurozone and concerns regarding public finances in France may thwart a potential EUR-USD recovery. In early September, the pair traded between 1.15 and 1.16. Re-approaching or even exceeding 1.14 has probably become a difficult task at this point."

UniCredit attaches no deadline to that recovery hurdle.

EUR/USD exchange rate FAQ Is 1.14 UniCredit's forecast target?

No. It is a level the bank considers difficult to regain, without assigning a deadline.

What could support a Euro recovery?

UniCredit expects lower US Treasury yields to relieve some of the pressure on EUR/USD.

Why might the rebound remain limited?

French fiscal concerns could weigh on the Euro even if US yields fall, while fresh US inflation threatens that yield-retreat assumption.

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Summary:

EUR/USD fell over 2% to multi-month lows near 1.1155, a move spurred by French budget deficit anxieties and persistent US-Eurozone yield differentials. This euro decline reflects significant macroeconomic hurdles, including widening French bond spreads, high global energy import costs, and sluggish European growth. With debt close to 119% of GDP, a 5% deficit, and rising borrowing needs for 2027, a lasting risk premium has formed ahead of French elections. The euro has had a rough patch lately. Concerns over French debt, a strong dollar, and changing interest rate expectations have driven EUR/USD to its lowest point in over a year. After falling to a 17-month low near 1.116 in early October, the pair has mostly traded sideways in recent days.

The pair picked up notably two days ago and is still gaining ground during European trading today, hovering around the 1.12 level. This makes you wonder if the downward trend has finally run its course.

Was the 2% Monthly Loss Justified or Overdone? When a major currency pair drops 2% in a month, it’s more than just short-term noise, but signals a shift in core expectations. Looking at the economic factors, it seems the euro’s decline stemmed mainly from economic realities, not an overreaction.

Concerns about French debt have been a primary driver. The difference in yield between 10-year French and German bonds widened significantly, nearing 160 basis points at one point. This level hasn’t been seen since the eurozone sovereign debt crisis over a decade ago.

France’s public debt is close to 119% of its GDP, with a deficit around 5%. Forecasts show the country’s borrowing needs could hit a record €340 billion by 2027. Political uncertainty leading up to the 2027 presidential election has added to the pressure, with Jean-Luc Mélenchon, a key political figure, suggesting measures like the central bank cancelling the French debt it holds.

Crédit Agricole, for its part, warns that bond spreads might widen even more. Fears of contagion, which once loomed large in the Eurozone, have resurfaced, even though the European Central Bank can handle extreme market stress. UBS, however, thinks the euro’s selling pressure might have gone too far.

A strong U.S. economy and the dollar’s role as a safe haven have kept it well-supported. Record speculative bets against the euro have also piled on technical selling pressure.

But perhaps the market’s reaction has overshot, moving beyond what underlying fundamentals suggest. France, for instance, isn’t facing an immediate solvency crisis. Its interest payments remain manageable relative to its GDP, and the broader Eurozone economy appears stable.

Earlier this month, French bond yields dropped, and the euro gained some ground back. This suggested the sell-off stemmed partly from market sentiment, not an irreversible fundamental decline.

Could a Rebound Be In the Works? The euro’s recent sideways trading and modest gains hint that selling momentum may be fading. Support near 1.11-1.116 has held firm through several tests. Should French yields stay steady and U.S. economic data soften enough to ease dollar strength, the EUR/USD pair might push toward 1.13.

Even so, any recovery will likely remain fragile until France shows clearer progress on its 2027 budget or finds more political stability.

So, while the euro’s recent losses certainly stem from real fiscal and political challenges in France, the sheer size of the drop also reflects a substantial risk premium.

We might see some stabilization, but a lasting recovery truly depends on real improvements in France’s fiscal plans and a more balanced economic policy between the U.S. and Europe.

The upcoming U.S. inflation data will largely determine if U.S. Treasury yields hold above 5% or decline. That, in turn, will influence the broader U.S. Dollar Index.

Why has EUR/USD declined since early September?

The euro’s drop against the dollar mainly stems from worries over French debt pushed the France-Germany bond yield spread much wider. Meanwhile, the U.S. economy stayed strong, and money flowed into the dollar as a safe bet.

Is the euro’s more than 2% monthly loss fully justified?

Yes, partly, because France faces real fiscal risks. However, the market’s reaction also seems to bake in an exaggerated risk premium. That premium might ease up if bond yields settle down.

How significant are French fiscal challenges for the euro?

With debt around 119% of GDP, a 5% deficit, and more borrowing needed in 2027, France’s financial situation is quite serious. This has built in a persistent risk premium for the euro, especially with elections coming up.

AUDUSD is one of the weakest currencies right now, and after a very disappointing Australian jobs report, the sell-off has picked up speed. Unemployment rose from 4.6% to 4.7%, while employment fell by 39K instead of rising, so the RBA does not have much room for higher rates.

On the 4H chart, the rebound from the October low looks corrective, with several overlaps. I see it as a wave 4 bounce that stopped just below the 0.7000 resistance. Price has now broken the lower line of the corrective channel I have been following, which suggests that wave 5 lower is in progress.

If that is the case, the next targets are below 0.6900 and then the 0.6860 to 0.6813 support area. That zone is also important on the daily chart, where the decline from the September high looks like a counter-trend wave C. This is where the whole correction could end.

For now, more short-term weakness is possible, especially if stocks stay in risk-off mode and tech keeps falling, which can weigh on commodity currencies. I will stay with this view as long as price stays below 0.7074. But once price reaches the support area, I will be looking for signs of a bottom, because the long-term picture from the 2025 lows still looks bullish.

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The NZD/USD pair trades in positive territory around 0.5605 during the early European trading hours on Thursday, bolstered by a weaker US Dollar (USD) and a sharp drop in US Treasury bond yields. The US September Producer Price Index (PPI) and Retail Sales data will take center stage later on Thursday.

Traders assess the likelihood of a US Federal Reserve (Fed) interest rate increase this month after a hot inflation report. The US Consumer Price Index jumped 0.6% MoM in September, putting the 12-month rate at 3.7%, according to the Bureau of Labor Statistics on Wednesday. Economists expected gains of 0.6% and 3.6%.

The core CPI, stripping out volatile food and energy costs, increased 0.3% for the month and rose 2.6% on an annual basis, compared with respective estimates of 0.2% and 2.5%.

Markets are now pricing in nearly a 29.3% probability of a rate hike later this month, compared with 22% before the CPI data, the CME FedWatch Tool showed.

San Francisco Fed President Mary Daly said the US central bank will probably need to hike short-term interest rates further, though she signalled no need for a rate increase at the October 27-28 meeting. Meanwhile, Fed Vice Chair for Supervision Michelle Bowman said there's time to wait and see before any more action.

Daly stresses deliberate path on rates as inflation risks stay elevatedThe FXS Speechtracker score of 6.8/10 marks a modestly more hawkish tone relative to the historical average of 6.1/10, underscoring persistent concern about inflation despite a cautious policy stance. Daly’s emphasis that gas-driven headline CPI is rising while core inflation remains “stubborn,” coupled with the remark that more rate hikes are “likely” but timing is still under consideration, signals a bias toward further tightening even as the Fed avoids rushing decisions. The focus on elevated inflation risks, a steady labor market, and the importance of clear, accountable communication suggests the Fed is comfortable maintaining a restrictive stance while watching how shocks and market reactions evolve.

The FXS Fed Sentiment Index slipped by 0.84 points to 128.17, indicating a slight pullback in perceived hawkishness. With the index still well above the neutral 100 level, the Fed remains firmly in hawkish territory despite the marginal softening, aligning with Daly’s message of likely further tightening but in a measured, deliberate fashion as captured by the FXS Speechtracker.

Technical Analysis: NZD/USD maintains a bearish outlook in the near termIn the daily chart, NZD/USD holds below the 20-day simple moving average (SMA) from the Bollinger Bands and well under the 100-day moving average, keeping the near-term bias bearish despite a modest rebound from recent lows. Price is also capped beneath the Bollinger upper band, while the Relative Strength Index (14) near 36 suggests fading downside momentum but not yet a decisive recovery.

On the downside, immediate support level emerges at the lower limit of Bollinger band around 0.5550, where sellers could hesitate on further declines. A desicive break below this level could expose the April 8, 2025 low of 0.5520, followed by the 0.5500 psychological level. 

On the topside, initial resistance level stands at the Bollinger SMA middle band at 0.5640, en route to the upper boundary of Bollimger band near 0.5725. Sustained trading above the mentioned level could see a rally to the 100-day moving average at 0.5785, which act as a stronger medium-term barrier that would need to be reclaimed to soften the broader bearish tone.

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

New Zealand Dollar FAQs

The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.

The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.

Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.

The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD 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.

The Australian dollar is showing signs of vulnerability against the US dollar and Japanese yen, with bearish inverted hammer candles emerging on both AUD/USD and AUD/JPY. A potential swing high near 70c on AUD/USD adds to the downside risks ahead of Australia's employment report, particularly if unemployment rises faster than the RBA expects.

View related analysis:

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AUD/USD and AUD/JPY Face Bearish Reversal Risks Ahead of Australian Jobs Data
AUD/USD Technical Analysis: Australian Dollar vs US Dollar
While we have time on our sides to see if that is indeed a large head and shoulders top in play on the weekly charts, AUD/USD is setting up for a potential swing high around 70c.

The daily chart shows a volatile inverted hammer formed on the daily chart, with a false break of its 20—day EMA and the 20-day capping the daily high as resistance. With a high-to-low range of 0.9%, it marked a 1-standard deviation range and its most volatile in eight. The face it still closed lower despite much of that range being earlier in the day plays to the advantage of bears, as it could realign momentum with the higher-timeframe head and shoulders pattern.

For now, perhaps we’re simply looking for a move down to 69c near its October low.

Source: ICE, TradingView

AUD/JPY Technical Analysis: Australian Dollar vs Japanese Yen
A similar setup may be emerging on AUD/JPY, though the daily chart doesn’t quite have the same bearish structure as AUD/USD. But the daily chart does also show an inverted hammer candle – with its most volatile daily range in seven.

The 200-day EMA is supporting for now, though a break of its also invalidates yesterday’s low for bears to assume bearish continuation.

A cluster of historical resistance levels including the 191 and 2024 highs make potential support levels over the near term, or intraday day targets for bears. But we need to see a clear break of the March and October low (108.78) before assuming bears have truly regained control. But if they do, the next major support level is the December VPOC near 106.52.

Source: ICE, TradingView

Australian Employment Report Could Pressure AUD/USD Bulls
Australia’s labour force report lands in a few hours. We know the RBA has retained a hawkish tone and that policymakers are concerned inflation may be more broad-based than simply high energy prices. This places CPI reports front and centre, though employment still matters to a degree.

Moreover, unemployment has been rising at a faster pace than the RBA’s own forecasts, so an unemployment rate of 4.7% or higher could cause further issues for Australian dollar bulls. And while job growth has been positive, part-time employment has been the main driver, while full-time employment has been slightly negative.

So the ideal scenario for AUD/USD bears is a rising unemployment rate alongside negative full-time job growth, with a contraction in headline employment being the cherry on top.

Japanese Yen Outlook: Intervention Risk Limits Dollar Upside
MUFG sees Japanese intervention risk limiting the US Dollar against the Yen, even as firmer US inflation puts renewed pressure on the exchange rate.
Japan's resistance to a weaker Yen faces a fresh test after US inflation exceeded expectations, but MUFG doubts the Dollar can sustain a move above ¥160.

The bank's near-term USD/JPY range of 156-160 allows for renewed Dollar strength while recognising the risk that a further depreciation would draw a response from Japanese authorities.

Latest-Exchange Rates:

Dollar to Yen (USD/JPY): 158.3426 (+0.01%)

Euro to Dollar (EUR/USD): 1.115517 (-0.41%)

Pound to Dollar (GBP/USD): 1.31884 (-0.52%)

Wednesday's US consumer-price release showed core inflation rising 0.3% in September, against the 0.2% consensus cited by MUFG before the figures.

That outcome strengthens the immediate test of its range, without establishing that intervention is imminent or that the Federal Reserve will raise rates in October.

MUFG's Tokyo head of global markets research, Teppei Ino, had identified a renewed October rate-hike debate as a potential trigger for a break above the pair's 200-day moving average.

"We expect broad dollar strength would likely push the USD/JPY above its closely watched 200-day moving average if the CPI and Chair Warsh's speech instead trigger a sharp reversal in expectations and markets once again come to expect an October hike."

The moving average was around 158.50 when the bank made that assessment.

Why Japan's warning matters at 160
Ino says: "Even then, a break above 160 is likely to prove difficult."

Ino was referring to Katayama's interviews earlier in October:

"In interviews with several media outlets last weekend, Finance Minister Satsuki Katayama said that USD/JPY levels above 160 ahead of the coordinated intervention at the end of July represented an extremely weak yen."

"With President Donald Trump also expressing concern about yen undervaluation, her remarks could be read as signaling that the authorities would not tolerate a sustained rise in the USD/JPY above 160."

Official resistance changes the risks facing investors selling the Yen, because a currency-buying operation can force a rapid reversal even when US interest rates favour the Dollar.

The number is nevertheless MUFG's interpretation of officials' tolerance, rather than an announced exchange-rate ceiling.

Japan's fiscal message also matters to that assessment.

Ino says: "Katayama subsequently said the government would seek to fund measures including the consumption tax cut without relying on deficit-financing bonds, through a thorough review of special tax measures, government funds and other spending, and that this would be reflected in the FY27 budget process."

He adds: "Prime Minister Takaichi also said fiscal policy would be managed while closely monitoring its impact on interest rates, exchange rates and other developments, signaling an intention to maintain confidence in the yen."

"Katayama has also stressed the importance of consistent government messaging and maintaining market confidence in relation to the Takaichi administration's economic and fiscal policies, which Treasury Secretary Bessent has cited as a factor behind yen weakness."

Ino nevertheless doubts that a consistent government message alone will trigger outright Yen buying.

Japanese rates offer a separate source of support
MUFG also sees expectations of further Bank of Japan tightening helping the currency, following the central bank's September rate increase.

Its senior currency analyst Lee Hardman says: "In the current environment of broad-based US dollar strength, we expect the yen to continue to perform better against non-US dollar crosses."

That is a more limited claim than an immediate fall in USD/JPY.

The Yen can strengthen against European currencies while making little progress against a Dollar supported by higher US yields.

Exchange Rates UK's coverage of Japanese investors' persistent overseas buying identified another obstacle to a sustained recovery: higher domestic rates have yet to produce a decisive shift away from foreign assets.

Nor does MUFG assume that every US rate increase reflected in markets will ultimately be delivered.

Before Wednesday's inflation release, its research head Derek Halpenny said: "Still, we remain sceptical that inflation pressures will continue to build and while we expect the Fed to hike again in December, we do not expect the Fed to deliver the two further rate hikes currently priced by the markets."

The firmer core CPI figure challenges that assessment at the margin, but it is one release and MUFG's argument concerned how far the full tightening cycle would extend.

The next domestic signal comes from Bank of Japan board member Junko Koeda, whose 15 October speech in Kumamoto is confirmed on the central bank's calendar.

Ino does not expect an explicit October hike signal from that appearance or the governor's post-G20 comments.

"Neither her remarks nor Governor Kazuo Ueda's press conference after the G20 is likely to signal a rate hike at this month's meeting. However, they should provide an opportunity to keep expectations of further rate hikes alive, lending support to the yen."

USD/JPY exchange rate FAQ
What range does MUFG expect for USD/JPY?

Its near-term assessment is 156-160, rather than a dated year-end target.

Does 160 guarantee Japanese intervention?

No. MUFG sees heightened resistance around that level, but officials have not announced a fixed ceiling.

What could help the Yen recover?

Further Japanese tightening and a reduction in expected US rate increases would improve its interest-rate position.

USDCAD has been one of the cleaner charts for me lately. The pair has pushed back to its 2026 highs, and that move tells me something important.

The recovery from the August 26 low that I've been tracking for a few weeks now looks impulsive rather than corrective. Impulses are five-wave patterns, and when I count this rise, I still can't see all five waves. That suggests the move isn't complete yet.

The pair is trading around 1.4211, right at the 1.4200-1.4125 support zone. If the current dip is just a retracement within the uptrend, this is where I'd expect buyers to step back in for a potential new rebound.

The key level for me is 1.4000. As long as USDCAD stays above it, I think the structure favors another leg higher once the pullback is complete. A drop below 1.4000 would make me rethink the count.

I know pullbacks can feel uncomfortable when you're expecting higher prices, but they are a normal part of a developing impulse. Markets rarely move in a straight line, and these pauses often give the trend the energy it needs for the next push.

Also keep in mind that US CPI is out today, October 14, at 14:30 CEST. The release could easily push the pair through the support zone or bounce it straight off it, so I'd expect volatility either way.

What I like about this setup is that it gives me clear reference points. The support zone tells me where a pullback could end, and the 1.4000 level tells me when I would be wrong. For me, that kind of clarity is often more valuable than trying to predict every small swing.

Key levels:

Current price: ~1.4211.Pullback support zone: 1.4200-1.4125.Key bullish level: 1.4000.Get Full Access To Our Premium Elliott Wave Analysis For 14 Days. Click here.

Pound-Australian Dollar could extend gains if BoE Governor Andrew Bailey reinforces rate hike expectations, while softer Chinese trade may weigh on the Aussie. The Pound to Australian Dollar (GBP/AUD) exchange rate edged higher on Tuesday, as GBP investors welcomed an upward revision to UK growth expectations this year.

At the time of writing, GBP/AUD was trading at AU$1.8991. A modest increase from the start of Tuesday’s European session.

Latest — Exchange Rates:

Pound to Dollar (GBP/USD): 1.324381 (+0.25%)

Australian Dollar to Dollar (AUD/USD): 0.697449 (+0.26%)

DAILY RECAP:

The Pound (GBP) ticked higher on Tuesday after the International Monetary Fund (IMF) upgraded its forecast for UK economic growth in 2026.

The IMF now expects the UK economy to grow by 1.3% this year, up from its previous projection of a 1% expansion.

However, while the IMF’s 2026 outlook improved, it warned that rising energy prices and elevated long-term borrowing costs are likely to weigh on economic activity in 2027, with growth expected to slow to 1.2%.

The upgraded growth forecast comes just a couple of weeks before Chancellor John Healey is scheduled to publish his first Autumn Budget.

The new forecasts have already helped to bring down UK gilt yields, which, coupled with the revised growth outlook, could offer more fiscal headroom for the Chancellor to balance Prime Minister Andy Burnham's growth ambitions, while also maintaining investor confidence in the UK's public finances.

The Australian Dollar (AUD) also attracted support on Tuesday after the minutes from the Reserve Bank of Australia’s (RBA) September meeting reinforced expectations that further interest rate hikes remain on the table.

The minutes revealed that policymakers were increasingly concerned about persistent inflationary pressures, with several of the upside risks identified at the previous meeting having since materialised or intensified.

This helped to offset the publication of Australia’s latest business confidence figures, after September’s NAB survey reported morale fell to a four-month low amid heightened cost concerns.

Near-Term GBP/AUD Forecast: Hawkish BoE Remarks to Strengthen Sterling? Looking ahead to the middle of the week, a speech by Bank of England (BoE) Governor Andrew Bailey may act as the primary catalyst of movement for the Pound to Australian Dollar exchange rate.

If Bailey reinforces recent signals from the BoE that the bank is ready to start hiking interest rates, it is likely to extend Sterling recent gains. Although any signs of caution could trigger a correction.

In the meantime, AUD investors may look to China’s latest trade figures for direction, with an expected slowdown in imports last month potentially reflecting negatively on the ‘Aussie’.

Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.

The EUR/JPY cross trades in positive territory around 177.30 during the early European trading hours on Wednesday. The Japanese Yen (JPY) edges lower against the Euro (EUR) on a cautious Bank of Japan (BoJ) rate outlook. Traders will closely monitor the speech by European Central Bank (ECB) President Christine Lagarde later in the day.

Bloomberg reported that BoJ policymakers are leaning against a rare back-to-back interest rate increase this month while still eyeing the possibility of another move as soon as December. The source said the Japanese central bank will instead carefully examine economic data to see if another hike is warranted as early as the December gathering.

Pricing in the overnight swaps market showed that traders are pricing in nearly a 10% chance of a rate hike this month, with the probability rising to 88% for a move by December, according to Bloomberg.

Technical Analysis: EUR/JPY keeps a bearish vibe under the 100-day SMAIn the daily chart, EUR/JPY maintains a bearish near-term bias as spot holds decisively under the Bollinger middle band and the 100-day simple moving average (SMA). Price also stays below the Bollinger upper band, underscoring a capped tone, while the Relative Strength Index (14) at 36.41 remains subdued but above oversold territory, hinting at weak selling pressure rather than an exhausted downtrend.

On the topside, immediate resistance emerges at the Bollinger middle band / 20-period SMA near 178.45, en route to the 180.00 psychological level. A desicive break above this level could pave the way to the upper boundary of Bollinger band at 181.05 and the 100-day SMA at 183.05 as a stronger structural barrier.

On the downside, initial support level is located at the lower limit of Bollinger band around 175.90. The next contention level is located at the October 20 low, 2025 of 175.34, followed by the October 2, 2025 low of 172.27. 

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

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.

The GBP/JPY extends its modest gains for two straight days, up 0.16% as the cross-pair continues to consolidate near the 210.00 figure with no clear bias, while the Relative Strength Index (RSI) drifts higher towards its 50-neutral level, an indication that buyers are stepping in.

GBP/JPY Price Forecast: Technical outlookAs of writing, a downslope resistance trendline near 209.80-210.00 is being tested by buyers, who were quickly rejected on Monday after hitting a weekly high of 209.99.

Worth noting that the day’s price action shows that buying pressure is building after GBP/JPY reached a low of the day (LOD) below 209.00, respecting a support trendline tested three times, an indication that further upside is seen.

A decisive breakout above 210.00. puts into play the September 18 cycle high of 211.28. Further gains are seen beyond that area, with the 50-day SMA seen as a key supply zone at 211.84.

Conversely, for a bearish continuation, GBP/JPY must drop below 209.00 and clear the support trendline, which caps losses, with the next support at 206.89, the September 30 low.

GBP/JPY Price Forecast: Technical outlook

GBP/JPY daily chart Japanese Yen Price Today The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the US Dollar.

USDEURGBPJPYCADAUDNZDCHFUSD-0.38%-0.34%-0.17%-0.45%-0.34%-0.46%-0.26%EUR0.38%0.03%0.21%-0.05%0.03%-0.07%0.13%GBP0.34%-0.03%0.15%-0.13%-0.01%-0.14%0.10%JPY0.17%-0.21%-0.15%-0.27%-0.16%-0.28%-0.06%CAD0.45%0.05%0.13%0.27%0.11%-0.01%0.21%AUD0.34%-0.03%0.01%0.16%-0.11%-0.12%0.09%NZD0.46%0.07%0.14%0.28%0.00%0.12%0.23%CHF0.26%-0.13%-0.10%0.06%-0.21%-0.09%-0.23% 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 Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

Pound Sterling-Dollar Forecast: UK Policy Clarity Holds Key to Recovery
BofA expects a medium-term Pound Sterling recovery, but UK policy uncertainty and the US Dollar's appeal during a narrow US equity rally complicate the path.
Bank of America's forecast for the Pound to reach $1.45 by the end of 2027 depends on a recovery that has yet to emerge convincingly from recent trading.

GBP/USD was near $1.3250 at the time of writing, up 0.30% on Tuesday, following a 2.10% fall during September.

Latest-Exchange Rates:

Pound to Dollar (GBP/USD): 1.324505 (+0.26%)

Euro to Dollar (EUR/USD): 1.119239 (+0.29%)

Dollar to Yen (USD/JPY): 158.36742 (-0.10%)

BofA's latest Global FX Weekly retains a $1.37 projection for end-2026, alongside the longer-term $1.45 forecast, which stands roughly 9.4% above the latest rate.

Strategists Michalis Rousakis and Claudio Piron write: "Elsewhere, we maintain a constructive medium-term view on GBP but prefer to await greater clarity on UK policies."

Image: GBP/USD 48hr chart

UK resilience helps, but the policy test remains
Its quantitative FX team writes: "UK data have recently surprised consistently to the upside, while growth expectations have been revised materially higher."

Those observations support Sterling's relative appeal, particularly against a Euro weakened by French fiscal concerns, but they do not remove the uncertainty around Britain's own Budget on 28 October.

Higher government borrowing costs can reflect concern about fiscal credibility as well as expectations of monetary tightening.

In his 8 October speech on financial resilience, Bank of England Governor Andrew Bailey warned that doubts about government finances can drive yields higher and tighten financial conditions.

See our analysis of the Budget's spending-credibility test which explores that risk alongside the protection offered by resilient activity.

BofA nevertheless expects the BoE to respond to the inflation threat.

Its central-bank assessment states: "We changed our BoE call- we now expect the BoE to hike twice in Nov '26 and Feb '27 to 4.25% to guard against risks of second round effects, assuming high energy prices persist into early next year and barring big downside surprises in data."

The BoE held Bank Rate at 3.75% in September, with three of its nine policymakers preferring an increase.

The Dollar has support beyond interest rates
A tighter UK stance would not automatically improve Sterling's yield advantage if US policy also became more restrictive.

BofA's Federal Reserve call remains hawkish, although it acknowledges uncertainty about the number of increases still to come: "We maintain our call for a hike at both the Oct and Dec meeting, though we acknowledge the risks is that we may only get one more hike this year".

The bank also sees investment in US technology companies as an important source of Dollar demand.

Adarsh Sinha and Claudio Piron explain why the composition of the stock-market rally matters: "Intuitively, such breadth measures tell us about the US vs. rest of the world prospects, which are key for the USD exchange rate. A broad rally typically reflects a global growth upswing, with cyclical sectors outperforming and growth differentials versus the US narrowing. In contrast, a technology-led rally reinforces the US exceptionalism narrative, attracting capital inflows and supporting the USD."

For GBP/USD, this means a stronger UK economy can coexist with a firm Dollar if international investors continue concentrating their money in US assets.

Rousakis and Piron write: "However, risks continue to accumulate for already nervous markets, including the ongoing Iran war and associated supply shock, rising concerns about the existential risks posed by AI, the apparent intractability of fiscal challenges, renewed trade tensions and, of course, the upcoming US midterms."

BofA therefore distinguishes a broadening equity rally from a general retreat in share prices.

Sinha and Piron write: "Looking ahead, what would a transition away from a narrow rally regime imply? A broadening would be USD negative from both the equity level & breadth effects, most clearly against high beta FX. An equity correction would be more nuanced: the level effect would be USD positive (except vs. JPY) but dampened if the sell-off is concentrated in large cap technology stocks."

A more widely shared global expansion would give the Pound's recovery a different foundation from a brief rise caused by disappointing US figures.

GBP/USD Exchange Rate FAQ
What is BofA's Pound-Dollar forecast?

The bank projects $1.37 at end-2026 and $1.45 at end-2027.

How far is $1.45 above the current rate?

Roughly 9.4% above the 13 October rate of $1.3250.

Does BofA expect UK interest rates to rise?

Its forecast includes November 2026 and February 2027 increases, conditional on persistent energy costs and no major downside data surprises.

EUR/GBP reverses earlier gains on Tuesday as fiscal and political concerns in France limit the Euro’s (EUR) upside, while the technical picture also suggests sellers remain dominant. At the time of writing, the cross trades around 0.8445, near its lowest level since June 2025, after reaching an intraday high of 0.8457.

Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the US Dollar.

USDEURGBPJPYCADAUDNZDCHFUSD-0.28%-0.29%-0.32%-0.30%-0.27%-0.46%-0.32%EUR0.28%-0.02%-0.05%-0.01%-0.01%-0.18%-0.03%GBP0.29%0.02%-0.04%-0.03%0.01%-0.18%-0.01%JPY0.32%0.05%0.04%0.02%0.04%-0.16%0.01%CAD0.30%0.00%0.03%-0.02%0.03%-0.17%-0.01%AUD0.27%0.00%-0.01%-0.04%-0.03%-0.20%-0.04%NZD0.46%0.18%0.18%0.16%0.17%0.20%0.17%CHF0.32%0.03%0.01%-0.01%0.00%0.04%-0.17%
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).

Pound support builds as EUR/GBP seen anchored in tight range despite UK budget riskAnalysts at ING have turned more constructive on the Pound, noting that they have "lowered our EUR/GBP forecast and now expect the pair to trade in a 0.84-0.85 range for at least several more months." They argue that "idiosyncratic risks surrounding the euro are unlikely to fade anytime soon," while the BoE "has sent a clear enough signal that it is prepared to hike," creating a supportive backdrop for GBP.

At the same time, ING flags the forthcoming "UK budget on 28 October" as "a potential risk for sterling, as markets are pricing in little fiscal concern." Even so, the bank points out that "Chancellor John Healey and Prime Minister Andy Burnham have appeared mindful of market sensitivities," and stresses that "while the budget will be closely scrutinised, we do not currently expect it to trigger significant bond volatility or leave a lasting negative mark on GBP."

Traders look ahead to the UK’s August Gross Domestic Product (GDP) report on Thursday, followed by the final Eurozone inflation reading for September on Friday. These releases, alongside comments from European Central Bank (ECB) and Bank of England (BoE) officials throughout the week, could trigger some price swings over the coming days.

Technical analysis

EUR/GBP has reversed sharply after testing 0.8600 in late September, slipping below the 50-day and 100-day Simple Moving Averages (SMAs). The 200-day SMA sits further overhead, reinforcing the bearish structure.

Momentum remains weak, with the Relative Strength Index (RSI) near 22 signalling deeply oversold conditions, while the Moving Average Convergence Divergence (MACD) remains in negative territory. The Average Directional Index (ADX) around 33 points to a strong prevailing downtrend, although oversold conditions leave room for a short-term recovery.

On the topside, initial resistance appears just above the market at the 0.8450 horizontal level, followed by a stronger barrier at 0.8500. Beyond these, the 50-day SMA at 0.8554 and the 100-day SMA at 0.8572 form a dense technical zone ahead of the 0.8600 horizontal line, with the 200-day SMA at 0.8626 marking a more strategic hurdle. On the downside, a further decline could bring the 0.8400 psychological mark into focus as the next support level.

(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.

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Summary:

The USD/ZAR forex pair rose near 16.75 on October 1. It then dropped over 0.8 percent last week, making it the second straight weekly loss and going below 16.50 today.
Even with the DXY holding above 102, the rand has stayed strong, thanks to the SARB’s September rate hike to 7.25% and recent lower oil prices.
The pair will likely see more near-term declines if oil prices ease. However, US inflation figures, energy markets, and geopolitics will shape its direction.
The USD/ZAR exchange rate hit a nine-week high around 16.75 on October 1, 2026, before falling back. It’s already dropped over 0.8% this past week and is on track for a second straight weekly loss, currently trading below 16.50.

Currency traders might want to pay attention to this recent slide, particularly when looking at the broader market. The US Dollar Index (DXY) has stayed strong, trading above 102, due to persistent US inflation and expectations that interest rates will remain high. So what is happening?

What Is Pressuring the Pair?
Oil prices are a big factor here. On October 9, Reuters reported oil prices fell after Middle East supply worries lessened. That came after President Trump said the US wouldn’t attack Iran before the upcoming elections.

South Africa imports a lot of energy, so cheaper oil cuts its import costs. That could free up capital for other spending.

Plus, ongoing global geopolitical uncertainty and the hunt for safe-haven assets have kept gold and silver prices high. Since South Africa exports a lot of minerals, these conditions boost its terms of trade and bring in more foreign currency.

The rand also offers attractive yields for carry trades against the US dollar. In September, the South African Reserve Bank (SARB) raised its policy rate by 25 basis points to 7.25%.

SARB made that decision because of inflation risks from high fuel prices and broader energy market disruptions. This keeps the rand’s interest rate advantage substantial.

Why the Rand Is Defiant Amid Elevated DXY Index Reading
The DXY Index still trades above 102, recently hovering near 102.4. Strong bond yields and the Federal Reserve’s commitment to tight monetary policy support this. Typically, a DXY level like this would put considerable pressure on emerging market currencies, the rand included.

Yet the USD/ZAR has dropped, showing the rand’s relative strength. Two key things explain this. The SARB’s September repo rate hike to 7.25% and local bond yields around 8.8% give foreign investors a premium.

In addition, August inflation came in at 4.4%, under the projected 4.5%, reducing the chance of further interest rate raises.

What Will Decide USD/ZAR Direction?
The outlook suggests a modest, continued decline in USD/ZAR short-term, assuming global risk appetite stays stable. A sustained break below the 16.45-16.40 range could signal further rand appreciation. On the flip side, a move back above 16.70 would indicate the dollar’s strength is returning.

Upcoming US inflation data will heavily influence market expectations for Federal Reserve policy. US CPI figures are due Wednesday. Headline inflation is anticipated to rise to 3.7%, up from 3.4%. Core inflation is expected at 2.5%.

Traders currently put an 81% probability on the Fed holding rates steady in October. Stronger-than-expected inflation, however, could revive bets on a December rate hike and strengthen the dollar, possibly pushing USD/ZAR back towards 16.75. Weaker inflation data, on the other hand, would likely have the opposite effect.

South Africa’s domestic data and communications from the SARB will also play a role. If evidence shows the inflationary impact of higher fuel costs is contained, that would support the rand. But signs of broader price pressures could limit its upward momentum.

Why did USD/ZAR fall after its October 1 peak?

The pair met technical resistance near 16.75 and then retreated. Softer oil prices helped the rand recover, even as the dollar remained strong.

How does the SARB rate support the rand?

The SARB’s September rate hike to 7.25% keeps the interest rate attractive. It also signals the bank’s commitment to curbing inflation, particularly with rising energy costs.

Why does oil matter for the rand?

When global crude oil prices climb, South Africa’s petroleum import costs increase. This strains the country’s current account balance and drives up inflation.