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EUR/USD attracts buyers on Thursday as a sharp rally in the Japanese Yen (JPY), softer United States labour-market data and a pullback in US Treasury yields weigh on the US Dollar (USD). At the time of writing, EUR/USD trades around 1.1622, up roughly 0.30% on the day.

The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 99.00, near a one-week low, after reaching 99.86 on Wednesday, its highest level since August 14. Meanwhile, the benchmark 10-year US Treasury yield falls for the second consecutive day to around 4.74%, retreating from 4.81%, its highest level since October 2023.

Dovish comments from Federal Reserve (Fed) Governor Christopher Waller prompt traders to scale back bets on a rate hike this month. Waller said he is “finally seeing some signs of disinflation in recent data” and that the “rate decision in September hinges on August inflation.” He added that he would support keeping interest rates unchanged if the August data confirm recent progress.

Waller also said the Fed’s mandate is to achieve “price stability and full employment, not financial conditions,” adding that the current interest-rate setting “could get us back to 2% inflation.”

According to the CME FedWatch Tool, the probability of a rate hike at the Fed’s September 15-16 meeting has fallen to around 48% from 63% a day earlier.

Meanwhile, mixed US economic data offers conflicting signals. Initial Jobless Claims increased to 206K in the week ending August 29, slightly above the market forecast of 205K and the previous reading of 204K. However, the ISM Services PMI rose to 55.4 in August from 54.1 in July, exceeding expectations of 54.3. The Prices Paid and Employment indices increased to 72.6 and 47.8, respectively. Traders now await Friday’s Nonfarm Payrolls (NFP) report for fresh clues on the Fed’s monetary policy outlook.

Across the Atlantic, the European Central Bank (ECB) is widely expected to raise interest rates at next week’s monetary policy meeting. The move would mark the second rate hike this year as the central bank seeks to curb inflation, which has been driven largely by elevated Oil prices linked to the war in the Middle East.

A Reuters poll showed that all 65 economists surveyed expect the ECB to raise its Deposit Facility Rate by 25 basis points to 2.50% on September 10. Around 91% expect the rate to stay at 2.50% through the end of the year, while 78% see it holding at that level through mid-2027.

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

USDEURGBPJPYCADAUDNZDCHFUSD-0.29%-0.18%-2.02%-0.31%-0.28%-0.32%-0.59%EUR0.29%0.10%-1.75%-0.08%0.01%-0.10%-0.31%GBP0.18%-0.10%-1.85%-0.16%-0.09%-0.18%-0.41%JPY2.02%1.75%1.85%1.72%1.78%1.67%1.45%CAD0.31%0.08%0.16%-1.72%0.04%-0.06%-0.27%AUD0.28%-0.01%0.09%-1.78%-0.04%-0.08%-0.30%NZD0.32%0.10%0.18%-1.67%0.06%0.08%-0.19%CHF0.59%0.31%0.41%-1.45%0.27%0.30%0.19% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

$1.16238

+0.31%

EUR/USD, USD/CAD and USD/CHF forecast: Key reversal setups emerge as the dollar weakens ahead of NFP, with 1.1640, 1.3780 and 0.8050 in focus.

In this article:EUR/USD

+0.31%

EUR/USD ForecastUSD/CAD

-0.32%

USD/CAD ForecastUSD/CHF

-0.66%

EUR/USD Technical Analysis

EUR/USD price chart showing price at 1.16260, trading above both the 50 EMA (1.15961) and the 200 EMA (1.16130). Source: TradingView The Euro rose quite a bit in early trading on Thursday, but with the jobs report coming out, I’m watching the 1.1640 level. That was where we had seen that massive sell-off. I’m looking for signs of exhaustion to short this. Now, I don’t want to get married to this position. This is not going to be a long-term position by any stretch of the imagination, but I think it’s difficult to imagine a market that’s just truly going to fly ahead of that Nonfarm Payroll announcement. It could, obviously, but I’m looking for signs of exhaustion to start shorting.

USD/CAD Technical Analysis USD/CAD price chart showing price at 1.37935, trading below both the 50 EMA (1.38520) and the 200 EMA (1.38648). Source: TradingView The dollar against the Canadian dollar has fallen pretty significantly over the last couple of days, but we have a gap down here at 1.3780 that I’m watching very closely. If we get a bounce from here, I’m willing to go long. Now, keep in mind both of these countries produce their jobs report at the same time on Friday morning, so I’ll be out of this position no matter what it does before then.

With that being said, as long as we get some type of bounce, I’m willing to play that V-shaped pattern here as the interest rate differential continues to favor the United States despite the fact that rates have dropped a little bit early in the session.

USD/CHF Technical Analysis USD/CHF price chart showing price at 0.80707, breaking below the 200 EMA (0.80846) and the 50 EMA (0.81103). Source: TradingView Finally, the USD/CHF pair. This is one I’ve been long for a very long time. It is falling apart. Again, like the Euro, I’m kind of watching to see a little bit of exhaustion somewhere right around the 0.8050 level. I’ll be watching to see if we get a bounce. That’s a place I could go long. But again, I don’t want to be in the dollar when the Nonfarm Payroll announcement comes out. So all of these will be very short-term trades at best.

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Chris is a proprietary trader with more than 20 years of experience across various markets, including currencies, indices and commodities. As a senior analyst at FXEmpire since the website’s early days, he offers readers advanced market perspectives to navigate today’s financial landscape with confidence.

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Why Brent’s break above $97 is failing to lift Dollar, and why Japan, not oil, is setting today’s currency direction What’s happening: USD/JPY broke decisively through 157.99 to around 156, bringing the 155 area back into range, as Yen’s rally gathers fresh momentum from speculation that Japan’s roughly $2 trillion GPIF could raise its domestic bond allocation, on top of an already-hawkish BoJ repricing. At the same time, Brent climbed to an intraday high around $97.62, its strongest level in six weeks, as the US-Iran conflict shows signs of extending well beyond 2026.

Why it matters: Brent above $97 and a conflict that could extend into 2027 would normally form a potent Dollar-supportive combination through inflation and rates. Instead, Dollar is broadly weaker because Japan has taken control of the FX narrative. Oil is still setting global inflation risk, but today, Japan is setting currency direction.

Yen Takes Over as GPIF Speculation Adds to BoJ Repricing Yen extended its powerful rally on Thursday, sending USD/JPY decisively through 157.99 to around 156 and putting the 155 area back within reach. Latest leg appears to have received fresh fuel from speculation surrounding Japan’s roughly $2 trillion Government Pension Investment Fund. GPIF held an unusual management committee meeting on August 21, its first August meeting since 2019, and revisited discussion around its basic portfolio only five months after a March assessment concluded that a review was unnecessary.

Market interest centers on whether GPIF could eventually raise its strategic allocation to domestic assets, particularly government bonds. Domestic bonds currently carry a 25% target allocation, alongside 25% each for domestic equities, foreign bonds and foreign equities. The timing is significant because Japan’s 10-year government bond yield has climbed roughly one percentage point since March and briefly reached 3.015% this week, highest since 1996. Higher domestic yields are already changing relative attractiveness of Japanese assets, with Japanese investors reducing overseas bond exposure this year. A larger GPIF domestic allocation would reinforce that repatriation theme and potentially relieve some upward pressure on JGB yields.

That speculation is adding to a much broader Yen-positive repricing already underway. BoJ officials have become increasingly explicit about further tightening, with markets now focused not only on a possible September hike but on a faster cycle over coming year. Japan’s top currency diplomat Atsushi Mimura added another layer of caution Thursday, saying he was “neither satisfied nor reassured” by recent Yen developments and that authorities remained on “a state of heightened alert.” He declined to confirm whether officials had conducted a rate check. Traders nevertheless continue to attribute Yen strength primarily to BoJ tightening expectations rather than fresh intervention.

The 155 level is critical. USD/JPY is approaching the same territory reached after July’s record intervention campaign, which cost Japan roughly $96.5bn and included rare US participation. The 155.22 area marks July’s post-intervention low, while 155.01 provides nearby technical support. This time, however, pair is approaching those levels organically rather than through any confirmed official Yen buying.

Why the 155 Level Matters Japan’s 10-year JGB yield: briefly reached 3.015% this week, highest since 1996. July’s record intervention: cost roughly $96.5bn, included rare US participation. 155.22: July’s post-intervention low. 155.01: nearby technical support. Mimura: “neither satisfied nor reassured,” authorities on “a state of heightened alert.” July’s Intervention-Driven Move vs. Today’s Organic Approach to 155 July’s Intervention Today How USD/JPY reached this territory Record intervention, cost roughly $96.5bn, included rare US participation Approaching organically, no confirmed official Yen buying Key levels 155.22 (post-intervention low), 155.01 (support) Same levels now back within reach Attributed driver Direct official Yen buying BoJ tightening expectations and GPIF speculation Dollar Weakens Even as Oil Sends a Normally Bullish Signal Yen’s surge has become dominant force in FX, with Dollar lower against all major counterparts despite a backdrop that would normally be considerably more supportive. In Dollar index specifically, Yen’s sizeable weighting means its appreciation directly pulls index lower. More broadly, modest easing in Treasury yields has allowed Dollar weakness to spread across EUR, GBP and CHF as traders focus on Japanese policy repricing rather than extending this week’s US rates trade.

That creates today’s most counterintuitive cross-asset signal. Brent has broken above $97 to fresh six-week highs as US-Iran conflict intensifies, yet Dollar is falling. Earlier this week, higher oil transmitted relatively cleanly through inflation fears into higher Treasury yields and firmer expectations for Fed tightening. That channel has not disappeared, but it is being overshadowed in FX by Yen’s much larger independent move and the pause in US yields.

Wednesday’s softer ADP report, with private payrolls rising only 38K, contributed to that pause in further hawkish repricing, but it is not the principal driver of Thursday’s Dollar move. Initial jobless claims subsequently matched expectations at 206K, offering little additional direction. Markets still attach substantial probability to September Fed hike, leaving Friday’s NFP as decisive test. For now, more revealing question is not simply why Dollar is weaker, but why Brent above $97 has failed to make Dollar stronger. Answer lies in Japan: Yen and BoJ repricing have become larger currency-market forces today.

Oil Story Shifts From Escalation to Duration Brent meanwhile climbed to an intraday high around $97.62, extending this week’s rally and reaching its strongest level in six weeks. But narrative is beginning to shift. Earlier phases of renewed fighting were dominated by immediate questions over each US strike, Iranian retaliation and potential disruption to Strait of Hormuz. Markets are now considering a more difficult possibility: conflict and impaired regional energy flows could persist into 2027. Recent market commentary has explicitly moved toward that longer time horizon, with Capital Economics expecting restoration of Middle East energy flows to be delayed until early next year and forecasting Brent around $100 by end-2026.

That matters more for inflation than another isolated military exchange. A conflict measured in additional months rather than days would prolong pressure on shipping, inventories and refined-product markets, increasing chances that energy inflation becomes persistent enough to influence central-bank decisions. Iranian retaliation has also widened geographically, while US officials continue to signal that military pressure could intensify again even as Washington tries to limit escalation ahead of November elections. Reuters reported that administration officials see possibility of more intense attacks after midterms, underscoring absence of a clear near-term exit from a war now in its seventh month.

The closing contradiction is therefore striking. Brent above $97 and rising concern that US-Iran conflict could extend into 2027 would normally form a potent Dollar-supportive combination through inflation and rates. Instead, Dollar is broadly weaker because Japan has taken control of FX narrative. Oil is still setting global inflation risk, but today, Japan is setting currency direction.

Related Coverage Yen & Precious Metals Deep Dives Read why Silver’s rebound from 63.27 still depends on holding 62.54-62.92 to keep its five-wave recovery from 54.77 alive ahead of Friday’s NFP: Silver’s Correction Has Reached Its Line in the Sand — What Happens Next?. See why Friday’s NFP creates an asymmetric setup for USD/JPY, with weak data opening a clearer path toward 155 than strong data does above 160: USD/JPY Tumbles Under the Shadow of Intervention, Faces Asymmetric NFP Test. US Data Deep Dive Read why jobless claims matching expectations at 206K still leaves Friday’s NFP as the clearer labor-market signal: US Initial Jobless Claims Rise from 204K to 206K. Global Inflation Deep Dives See why Eurozone PPI’s swing to +1.6% m/m was driven largely by a 5.6% jump in energy prices, with annual producer inflation accelerating to 5.8%: Eurozone PPI Surges 1.6% M/M as Energy Drives Renewed Producer Inflation (full Eurostat release). Read why Swiss CPI’s jump to 0.8% was driven mostly by energy and imported prices, with core inflation holding at 0.4%: Swiss CPI Jumps to 0.8%, but Energy Drives Much of Inflation Surprise. Global PMI Round-Up See why UK services hitting a four-month high still came with employment falling for a 23rd straight month: UK PMI Services Hits Four-Month High as Cost Pressures Reaccelerate. Read why Eurozone’s composite PMI holding at an eight-month high alongside stalled disinflation is strengthening the case for ECB tightening: Eurozone PMI Composite Holds Firm as Sticky Prices Strengthen ECB Tightening Case. See why Japan’s record composite selling-price inflation is adding to the case for another BoJ hike even as growth accelerates: Japan PMI Growth Accelerates as Record Selling Prices Strengthen BoJ Hike Case. Read why Australian services confidence hit a six-month high even as fuel and wage costs kept input inflation elevated: Australia PMI Services Holds Firm at 53.2 as Confidence Rises but Costs Stay High. See why China’s services and composite PMI gains reflect stronger domestic demand and sustained hiring: China RatingDog PMIs Strengthen as Services and Employment Gain Momentum. Frequently Asked Questions Q: Why is Dollar falling even though oil just broke above $97? A: Because Yen’s much larger, independent move is overwhelming the usual oil-to-Dollar transmission channel. Higher oil normally supports Dollar through inflation fears feeding into higher Treasury yields and firmer Fed tightening expectations, and that channel hasn’t disappeared. But Yen’s sizeable weighting in the Dollar index, combined with a pause in US yields, means Japanese policy repricing is currently the bigger force in FX. The real question today isn’t why Dollar is weaker, it’s why Brent above $97 hasn’t made it stronger, and the answer is Japan.

Q: What is GPIF and why does speculation about it matter for Yen? A: GPIF is Japan’s roughly $2 trillion Government Pension Investment Fund. It held an unusual management committee meeting on August 21, its first August meeting since 2019, revisiting its basic portfolio just five months after concluding in March that no review was needed. Markets are watching whether GPIF could raise its 25% target allocation to domestic bonds. A larger domestic allocation would reinforce the repatriation trend already underway as Japanese investors reduce overseas bond exposure, adding further support to Yen and potentially easing some upward pressure on JGB yields.

Q: How is this approach to 155 different from July’s intervention? A: July’s move to the 155 area came from a record, roughly $96.5bn intervention that included rare US participation. This time, USD/JPY is approaching the same 155.22 and 155.01 levels organically, with no confirmed official Yen buying. Traders are attributing the move to BoJ tightening expectations and GPIF speculation rather than direct intervention, even though currency diplomat Mimura says authorities remain on “a state of heightened alert.”

Key Takeaways USD/JPY broke through 157.99 to around 156: Bringing the 155 area back into range for the first time since July’s intervention. GPIF speculation is adding fresh fuel to Yen’s rally: Markets are watching whether Japan’s roughly $2 trillion pension fund raises its 25% domestic bond allocation after an unusual August 21 committee meeting. Japan’s 10-year JGB yield briefly hit 3.015% this week: The highest since 1996, up roughly one percentage point since March. Currency diplomat Mimura kept intervention rhetoric alive: Saying he’s “neither satisfied nor reassured,” though traders still attribute Yen strength to BoJ tightening expectations, not intervention. Brent climbed to a six-week high around $97.62: As the oil narrative shifts from immediate escalation questions to concern the conflict could extend into 2027. Reuters reported officials see possible intensified attacks after the US midterms: Underscoring no clear near-term exit from a conflict now in its seventh month. Dollar is broadly weaker despite a combination that would normally support it: Brent above $97 and extended conflict risk usually mean higher inflation and rates support for Dollar, but Japan has taken control of the FX narrative instead. Unlike July, today’s approach to 155 is organic: No confirmed official Yen buying, unlike July’s roughly $96.5bn intervention with rare US participation. What to Watch Next Friday’s US nonfarm payrolls report is the decisive near-term test for Dollar, following a softer ADP print and in-line jobless claims. Watch whether USD/JPY breaks below 155, further signals on GPIF’s portfolio review, and whether Brent extends toward $100 as Capital Economics and others push their Middle East normalization timelines further into 2027.

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USD/INR has broken below Goldman's 95-97 range as RBI-linked inflows lift the Rupee, although importer demand and expensive oil threaten the rally. The US Dollar to Indian Rupee (USD/INR) exchange rate has rebounded to around 94.54 after the Rupee briefly drove the pair down to 94.24.

That move carried USD/INR decisively below the 95–97 range expected by Goldman Sachs.

The Indian Rupee has strengthened by almost 1% over the past week, although the US Dollar to Rupee exchange rate remains more than 5% higher since the beginning of 2026.

Near-Term: Goldman Expects USD/INR to Stay Between 95 and 97 Goldman expects Asian currencies to make further progress against the Dollar, but it sees important differences within the region.

“Year-to-date Asian currency performance can be neatly explained by exposure to tech exports. The KRW, SGD, MYR, and TWD have outperformed the less tech-exposed, high-yielding currencies in Asia: INR, IDR, and PHP. Going forward, we expect USD/Asia to grind lower.”

The bank favours currencies with greater exposure to the technology cycle.

“Tech-related currencies such as KRW, TWD, and MYR should outperform others.”

Its Indian Rupee view is considerably more restrained.

“Among the high-yielding currencies, we expect USDINR to remain range-bound between 95 and 97 now that the catalyst for the rally, namely FCNR, is behind us.”

The subsequent decline to 94.24 challenges both the bottom of that range and the assumption that the relevant inflows had already run their course.

The latest Rupee strength has been supported by flows associated with the Reserve Bank of India's temporary measures for attracting foreign-currency funding.

According to the RBI's provisional figures, the facilities generated total inflows of $136.38 billion by 31 August.

Foreign Currency Non-Resident deposits accounted for $127.23 billion of that total.

The FCNR window closed at the end of August, supporting Goldman's argument that this particular source of demand should now fade.

Even so, the scale and timing of the inflows were sufficient to drive USD/INR below 95 before the market could fully absorb them.

The move also carried the pair close to the 94 level highlighted in an earlier Indian Rupee forecast.

USD/INR Outlook: Oil Prices and Importer Demand Could Restore the Range The Indian Rupee's break below 95 may prove difficult to sustain if oil prices remain around $95 a barrel.

India imports most of its crude requirements, so expensive energy increases demand for Dollars and worsens the country's external balance.

Importer buying has already emerged near the recent USD/INR lows, helping the pair recover from 94.24 to approximately 94.54.

A return above 95 would bring the market back inside Goldman's projected range without requiring a broader reversal in the Rupee's trend.

Continued trading below 95, particularly after the FCNR window has closed, would present a more serious challenge to the forecast.

Investors will now watch crude-oil prices, importer Dollar demand, RBI liquidity operations and any further foreign-currency inflows.

US yields, payroll figures and Federal Reserve expectations will determine whether the Dollar regains enough support to restore Goldman's 95–97 range.

The USD/JPY has dropped around 300 pips from its overnight highs in second day of sharp selling. Suspected BoJ intervention and, more likely, expectations of a hawkish BoJ hike have helped to lift the yen across the board.

Benchmark Payroll Data and Interest Rates That being said, the jobs report gives a little bit of further guidance because the expected addition of 55,000 jobs is a good benchmark to measure whether or not we are moving towards those rate cuts. If the jobs number comes out hotter than anticipated, it could work against gold as rates will probably continue to grind higher.

Ultimately, this is a nice settling spot between now and that jobs report, so it’s not overly surprising to see gold just kind of bounce around in this area, initially bouncing off of the 200-day EMA early Wednesday, only to test the $4,500 level.

I expect probably a little bit of chop here. Again, it makes sense with that important jobs number the next day. Keep in mind that it is a long weekend in the United States as well, so Monday will be Labor Day. That could affect some liquidity.

Key takeaways JPY strength accelerates: USD/JPY fell 0.91% on 2 September and extended its decline by another 1.35% on 3 September, a move comparable with the sharp decline seen around the July US-Japan FX intervention. Fundamentals are turning more yen-supportive: US Treasury Secretary Scott Bessent’s support for decisive Japanese action, BoJ policymaker Hajime Takata’s discussion of larger or consecutive rate hikes, and renewed intervention risk have strengthened the bullish JPY narrative. 200-day MA breakdown damages USD/JPY’s uptrend: The pair has broken below its 200-day MA and erased its gains since the 3 August low. Unless 158.04/50 is reclaimed, downside risk remains towards 155.03 and 153.84. In the past 40 hours, the Japanese yen has strengthened dramatically against the US dollar, a trend that began on Wednesday, 2 September 2026, when USD/JPY declined by 0.91%.

In follow-through today (Wednesday, 3 September 2026), USD/JPY has extended its losses by a further 1.35% at the time of writing (see Fig. 1).

The current decline of the USD/JPY is almost on par with the daily loss of 1.32% recorded on 31 July 2026, where Japan and the US confirmed their first joint FX intervention in around 28 years following the Japanese government’s sole intervention a day earlier on 30 July 2026, in bid to stall the steep pace of JPY weakening where USD/JPY soared to the 164 handle on 23 July 2026, its highest level in about 40 years.

Fig. 1: Daily rate of change (%) of USD/JPY with key events as of 3 Sep 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.

Today’s swift decline in USD/JPY smells like FX intervention, with no clear catalyst in relevant economic data releases.

However, so far, there are no official press releases from Japan or the US confirming any form of intervention, and no “according to sources” reporting from media outlets.

What we know so far… Here are the three fundamental developments to reinforce the current bout of JPY strength:

US Treasury Secretary Scott Bessent expressed support for decisive Japanese action to address yen weakness to Bank of Japan (BoJ) Governor Ueda during the G-20 finance and central bank leaders meeting last weekend, according to a readout released by the US Treasury Department on Tuesday, 1 September 2026. This reduces the political constraint on further BoJ tightening and suggests Washington is increasingly comfortable with a stronger yen. BOJ board member Hajime Takata said policymakers should consider options beyond the conventional 25-basis-point rate increase, including larger or consecutive hikes, said in a news conference on Wednesday, 2 September 2026. While Takata remains one of the BoJ’s most hawkish members, his comments increase the risk that the central bank accelerates its tightening cycle. The speed of the yen’s appreciation placed traders on high alert for another round of intervention. Although there was no immediate confirmation of official yen buying, the threat of action creates an increasingly asymmetric risk around the psychologically important 160.00 region. Let’s now unpack the short-term trajectory (1 to 3 days) of the USD/JPY from a technical analysis perspective.

Major uptrend phase of USD/JPY has been damaged, bounce before a new drop Fig. 2: USD/JPY medium-term trend as of 3 Sep 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.

Fig. 3: USD/JPY minor trend as of 3 Sep 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.

Today’s swift bearish reaction in USD/JPY comes right after the retest of a key pullback resistance level at around 160.30, a former major ascending trendline support from the 22 April 2025 low (see Fig. 2).

Today’s decline in USD/JPY has sent it below the key 200-day moving average and erased all its gains from the prior one month, since the 3 August 2026 low of 155.23 (see Fig. 2).

The current steep intraday decline in USD/JPY has pushed the hourly RSI momentum indicator into oversold territory, but there is no clear bullish divergence at this juncture (see Fig. 3).

Hence, USD/JPY may now form a potential minor dead cat bounce at the near-term support of 156.32, towards the near-term resistance of 157.30.

Watch the 158.04/50 key short-term pivotal resistance (also the 200-day moving average). If this zone is not surpassed to the upside, the odds are skewed towards a new potential bearish impulsive down-move sequence next, which could expose the next intermediate supports at 155.03 and 153.84 in the first step (see Fig. 3).

On the other hand, a clearance and an hourly close above 158.50 would invalidate the bearish scenario, triggering a squeeze up to retest the next intermediate resistance at 159.18/54 (20-day moving average) (see Fig. 3).

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GBP/USD at two-week low: Risk aversion takes holdGBP/USD attempted to rebound from a two-week low of approximately 1.3485 on Thursday. Investors are moving away from riskier assets amid concerns about the economic impact of an energy shock triggered by a fresh escalation in the Middle East.

The market is digesting Prime Minister Andy Burnham’s address to the House of Commons. He reaffirmed the government’s commitment to fiscal discipline and reducing the debt burden. The Prime Minister also noted that bringing forward the budget submission date should help reduce speculation about future fiscal measures. Chancellor John Healy’s first major statement on the government’s programme is expected as early as next week. Read more...

British Pound gains capped as fiscal, geopolitical risks persistGBP/USD gains after two days of losses, trading around 1.3500 during the European hours on Thursday. The currency pair experiences an upward push as a sharp rally in the Japanese Yen (JPY) weighed heavily on the US Dollar (USD). This sudden Yen surge was largely driven by market speculation that Japanese authorities conducted a rate check, signaling potential direct intervention in foreign exchange markets.

Adding to the Greenback's troubles, recent economic data highlighted a slowdown in US private-sector employment for August, where ADP figures showed only 38,000 positions added against an expected 47,000. Despite these cooling labor signals, financial markets are still pricing in roughly a two-thirds probability of a Federal Reserve interest rate hike later this month, leaving traders eagerly awaiting upcoming jobless claims and Friday’s comprehensive payrolls report for clearer policy direction. Read more...

GBP/USD Price Forecast: Holds a mildly bullish bias near 1.3500 despite subdued RSI momentumThe GBP/USD pair trades in positive territory around 1.3490 during the early European trading hours on Thursday, bolstered by a weaker US Dollar (USD). Traders await the Bank of England (BoE) Governor Andrew Bailey’s speech and US August jobs data later on Friday for fresh impetus. 

Federal Reserve (Fed) Chair Kevin Warsh delivered unexpectedly hawkish remarks at the Jackson Hole meeting last week, boosting market expectations for a rate hike next month. Warsh pledged to return inflation to the 2% target and indicated rates could rise further. Read more...

Referenced assets

Key takeaways JPY strength accelerates: USD/JPY fell 0.91% on 2 September and extended its decline by another 1.35% on 3 September, a move comparable with the sharp decline seen around the July US-Japan FX intervention.Fundamentals are turning more yen-supportive: US Treasury Secretary Scott Bessent’s support for decisive Japanese action, BoJ policymaker Hajime Takata’s discussion of larger or consecutive rate hikes, and renewed intervention risk have strengthened the bullish JPY narrative.200-day MA breakdown damages USD/JPY’s uptrend: The pair has broken below its 200-day MA and erased its gains since the 3 August low. Unless 158.04/50 is reclaimed, downside risk remains towards 155.03 and 153.84. In the past 40 hours, the Japanese yen has strengthened dramatically against the US dollar, a trend that began on Wednesday, 2 September 2026, when USD/JPY declined by 0.91%.

In follow-through today (Wednesday, 3 September 2026), USD/JPY has extended its losses by a further 1.35% at the time of writing (see Fig. 1).

The current decline of the USD/JPY is almost on par with the daily loss of 1.32% recorded on 31 July 2026, where Japan and the US confirmed their first joint FX intervention in around 28 years following the Japanese government’s sole intervention a day earlier on 30 July 2026, in bid to stall the steep pace of JPY weakening where USD/JPY soared to the 164 handle on 23 July 2026, its highest level in about 40 years.

Fig. 1: Daily rate of change (%) of USD/JPY with key events as of 3 Sep 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance. Today’s swift decline in USD/JPY smells like FX intervention, with no clear catalyst in relevant economic data releases.

However, so far, there are no official press releases from Japan or the US confirming any form of intervention, and no “according to sources” reporting from media outlets.

What we know so far… Here are the three fundamental developments to reinforce the current bout of JPY strength:

US Treasury Secretary Scott Bessent expressed support for decisive Japanese action to address yen weakness to Bank of Japan (BoJ) Governor Ueda during the G-20 finance and central bank leaders meeting last weekend, according to a readout released by the US Treasury Department on Tuesday, 1 September 2026. This reduces the political constraint on further BoJ tightening and suggests Washington is increasingly comfortable with a stronger yen.BOJ board member Hajime Takata said policymakers should consider options beyond the conventional 25-basis-point rate increase, including larger or consecutive hikes, said in a news conference on Wednesday, 2 September 2026. While Takata remains one of the BoJ’s most hawkish members, his comments increase the risk that the central bank accelerates its tightening cycle.The speed of the yen’s appreciation placed traders on high alert for another round of intervention. Although there was no immediate confirmation of official yen buying, the threat of action creates an increasingly asymmetric risk around the psychologically important 160.00 region.Let’s now unpack the short-term trajectory (1 to 3 days) of the USD/JPY from a technical analysis perspective.

Major uptrend phase of USD/JPY has been damaged, bounce before a new drop Fig. 2: USD/JPY medium-term trend as of 3 Sep 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance. Fig. 3: USD/JPY minor trend as of 3 Sep 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance. Today’s swift bearish reaction in USD/JPY comes right after the retest of a key pullback resistance level at around 160.30, a former major ascending trendline support from the 22 April 2025 low (see Fig. 2).

Today’s decline in USD/JPY has sent it below the key 200-day moving average and erased all its gains from the prior one month, since the 3 August 2026 low of 155.23 (see Fig. 2).

The current steep intraday decline in USD/JPY has pushed the hourly RSI momentum indicator into oversold territory, but there is no clear bullish divergence at this juncture (see Fig. 3).

Hence, USD/JPY may now form a potential minor dead cat bounce at the near-term support of 156.32, towards the near-term resistance of 157.30.

Watch the 158.04/50 key short-term pivotal resistance (also the 200-day moving average). If this zone is not surpassed to the upside, the odds are skewed towards a new potential bearish impulsive down-move sequence next, which could expose the next intermediate supports at 155.03 and 153.84 in the first step (see Fig. 3).

On the other hand, a clearance and an hourly close above 158.50 would invalidate the bearish scenario, triggering a squeeze up to retest the next intermediate resistance at 159.18/54 (20-day moving average) (see Fig. 3).

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About the Author

Kelvin Wong Senior Market Analyst

Based in Singapore, Kelvin Wong is a well-established senior global macro strategist with over 15 years of experience trading and providing market research on foreign exchange, stock markets, and commodities.

Passionate about connecting the dots in the financial markets and sharing perspectives around trading and investment, Kelvin Wong is an expert in using a unique combination of fundamental and technical analyses, specializing in Elliott Wave and fund flow positioning, to pinpoint key reversal levels in the financial markets.

In addition, over the last ten years, Kelvin has conducted numerous market outlook and trading-related seminars, as well as technical analysis training courses, for thousands of retail traders.

Based in Singapore, Kelvin Wong is a well-established senior global macro strategist with over 15 years of experience trading and providing market research on foreign exchange, stock markets, and commodities.

Passionate about connecting the dots in the financial markets and sharing perspectives around trading and investment, Kelvin Wong is an expert in using a unique combination of fundamental and technical analyses, specializing in Elliott Wave and fund flow positioning, to pinpoint key reversal levels in the financial markets.

In addition, over the last ten years, Kelvin has conducted numerous market outlook and trading-related seminars, as well as technical analysis training courses, for thousands of retail traders.

Gold (XAU/USD) is trading higher on Thursday, returning to levels above $4.400 after bouncing from three-week lows near $4,280 on Wednesday. The precious metal is drawing support from a weaker USD, as ADP employment data disappointed and New York Federal Reserve (Fed) President John Williams tamed rate hike expectations, but Fed tightening bets remain solid, and bulls are likely to face significant resistance at $4,470.

US Data released on Wednesday revealed that private employment rose 38K in August, the weakest reading since January and well below the 47K increase expected.

Apart from that, New York Federal Reserve President John Williams said that rising bond yields are due to a solid economy, rather than to inflation fears, and suggested that the central bank should “wait and see” before taking decisions on interest rates. This cooled hopes of an immediate rate hike, although futures markets are still pricing a 60% chance of a 25 basis point hike at September's meeting, according to the CME’s FedWatch Tool.

Technical Analysis: Gold bulls have significant resistance ahead

XAU/USD has bounced up from lows and is trading returning to the $4,430 area, but keeps a mildly bearish near‑term tone following an impulsive reversal from last week's highs near $4,700. Momentum indicators are in neutral territory, with the daily Relative Strength Index (14) at 52 and the Moving Average Convergence Divergence (MACD) below zero, which shows that the bullish impulse is fragile.

Gold bulls are likely to be tested at the August 31 high, near $4,470, and, above here at the key 200‑day Simple Moving Average (SMA) at $4,533, which closes the path to last week's high, at $4,690. On the downside, a break of the August 14 low in the $4,310 area confirms a "Head and Shoulders" pattern, and adds pressure towards the August 6 low of $4,220 and the late July lows near $4,000.

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

Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

The Euro (EUR) extends gains against a weaker British Pound (GBP) for the fourth consecutive day on Thursday, following downward revisions of both the Eurozone and UK Services Purchasing Managers’ Index (PMI) figures. The EUR/GBP pair maintains its bid tone, with bulls targeting a previous support area a few pips above 0.8600 after rallying nearly 0.5% so far this week.

Eurozone final HCOB Services Purchasing Managers Index (PMI) figures have been revised down to 51.6 from the 51.7 previously estimated. Later on the day, the final UK S&P Global Services PMI was revised to 52.5 from preliminary estimates of 52.8.

The Euro is drawing support from the monetary policy divergence between the European Central Bank (ECB) and the Bank of England (BoE). Investors are bracing for a quarter-point ECB rate hike later this month, especially after the hawkish comments by ECB Council member and Bundesbank President Joachim Nagel. The BoE, on the contrary, is widely expected to stand pat on rates at its September 17 meeting.

Technical Analysis: Bulls have broken above a triangle pattern

EUR/GBP broke a key resistance area between 0.8580 and 0.8585 on Wednesday, which was also the top of a triangle pattern, providing fresh hopes for bulls. Momentum indicators on the 4-hour chart remain well into bullish territory, although the Relative Strength Index (14) flirts with overbought levels, a warning that the pair might pull back before rallying higher.

Bulls are likely to struggle at a previous support area, now turned resistance, between 0.8600 and 0.8610 (June 23, 25, 30 lows). Further up, the next level would be the triangle pattern's measured target, which lies around the June 29 high, in the 0.8630 area.

On the downside, immediate support is seen at the previous top near 0.8585, followed by Wednesday's low, near 0.8565, and the triangle bottom, near 0.8560.

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

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-0.12%-0.04%-1.39%-0.22%-0.21%-0.16%-0.38%EUR0.12%0.08%-1.31%-0.15%-0.08%-0.10%-0.26%GBP0.04%-0.08%-1.37%-0.22%-0.16%-0.15%-0.34%JPY1.39%1.31%1.37%1.20%1.23%1.23%1.05%CAD0.22%0.15%0.22%-1.20%0.02%0.03%-0.15%AUD0.21%0.08%0.16%-1.23%-0.02%0.00%-0.14%NZD0.16%0.10%0.15%-1.23%-0.03%-0.01%-0.15%CHF0.38%0.26%0.34%-1.05%0.15%0.14%0.15% 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).

GBP/USD attempted to rebound from a two-week low of approximately 1.3485 on Thursday. Investors are moving away from riskier assets amid concerns about the economic impact of an energy shock triggered by a fresh escalation in the Middle East.

The market is digesting Prime Minister Andy Burnham’s address to the House of Commons. He reaffirmed the government’s commitment to fiscal discipline and reducing the debt burden. The Prime Minister also noted that bringing forward the budget submission date should help reduce speculation about future fiscal measures. Chancellor John Healy’s first major statement on the government’s programme is expected as early as next week.

Money markets continue to price in a 25-basis-point Bank of England rate hike before year-end. Those expectations have been reinforced by the recent acceleration in UK retail price inflation.

Additional pressure on GBP/USD is coming from a more hawkish stance by the Federal Reserve. Following Kevin Warsh’s hawkish comments and rising oil prices, the probability of a US rate hike in September is now estimated at approximately 66%, supporting the dollar.

Technical analysis

On the H4 GBP/USD chart, the market has nearly reached the local downside target at 1.3474 and is forming a narrow consolidation range above this level, currently extending up to 1.3510. A downside breakout would open the way for a further decline towards 1.3450. An upside breakout could lead to a correction towards 1.3520, followed by a resumption of the downtrend. The MACD indicator supports this scenario, with its signal line below zero and trending downward, indicating continued downside momentum.

On the H1 chart, the market has formed a tight consolidation range around 1.3495, extending between 1.3478 and 1.3518. A move lower towards 1.3470 is expected, and a break below this level would open the way for a further decline to 1.3450. The Stochastic oscillator supports this scenario, with its signal line below 50 and trending downward towards 20, indicating continued short-term downside pressure.

ConclusionGBP/USD is hovering near a two-week low as risk aversion prevails amid escalating Middle East tensions and a fresh energy shock. The pound has found limited support from Prime Minister Burnham’s reaffirmation of fiscal discipline, with markets awaiting Chancellor Healy’s statement on the government’s programme next week. Meanwhile, expectations of further Bank of England tightening, reinforced by rising inflation, continue to provide some underlying support. However, hawkish signals from the Federal Reserve and elevated oil prices have strengthened the dollar, putting further pressure on the pair. Technically, further downside towards 1.3450 appears likely, while a corrective move towards 1.3520 cannot be ruled out. The near-term direction will depend on US jobs data and geopolitical developments.

Silver prices (XAG/USD) rose on Thursday, according to FXStreet data. Silver trades at $65.88 per troy ounce, up 0.87% from the $65.31 it cost on Wednesday.

Silver prices have decreased by 7.32% since the beginning of the year.

The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 67.35 on Thursday, up from 67.18 on Wednesday.

Silver FAQs Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.

Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.

Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.

Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.

Silver price (XAG/USD) struggles to extend Wednesday’s strong recovery move above $66.25 during the European trading session on Thursday. The white metal could remain sideways as investors await the United States (US) Nonfarm Payrolls (NFP) data for August, which will be released on Friday.

US jobs rebound seen keeping Fed on hold despite hawkish risksAccording to TD Securities, August Nonfarm Payrolls are expected to “rebound to 95k after July posted a decline of 23k,” with the firm cautioning that “risks to our payrolls forecasts appear hawkish, and we would not rule out an outsized positive surprise.” The unemployment rate is projected to have “gone sideways at 4.1% with balanced risks,” suggesting only limited change in headline labour market conditions.

Investors will pay close attention to the US NFP report as it is expected to influence market expectations for the Federal Reserve’s (Fed) monetary policy outlook.

Analysts at TD say that “a modestly hawkish employment report will reaffirm the Fed's attention on inflation, but it will be by itself unlikely to push the Committee towards hikes,” as they “continue to expect that inflation data can print modestly, allowing the Fed to keep rates on hold for now.”

According to the CME FedWatch tool, traders see a two-in-three chance that the Fed will increase interest rates in the September policy meeting.

Elsewhere, higher oil prices due to restricted energy shipments through the Strait of Hormuz, a vital passage to almost one-fifth of global energy supply, could fizzle out the recovery move in the Silver price.

Higher oil prices prompt global inflation expectations, a scenario that increases fears of interest rate hikes from central banks. Such a case bodes poorly for non-yielding assets, like Silver.

Silver Technical Analysis

In the daily chart, XAG/USD trades at $66.00. The pair holds above the 20-day Exponential Moving Average (EMA) at $65.51, keeping the near-term bias constructive as price extends its recovery from the mid-$50s area.

The Relative Strength Index (14) at 53.04 sits in neutral territory but leans higher, which suggests buyers still have the upper hand without the market being overstretched.

On the downside, immediate support is seen at the 20-day EMA at $65.51, where a deeper pullback would be expected to attract fresh demand. Looking up, the August high near $71 is expected to remain a key barrier.

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

Silver FAQs Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.

Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.

Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.

Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.

USDJPY drops from peak The Yen (USDJPY) took a step back from its monthly rally as prices hit a firm rejection just above the 160.00 zone. A bearish RSI divergence shows a slowdown in buying momentum.

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note GBP/USD extended its decline to 1.3475 before rebounding, closing at 1.3485. Intraday bias remains lower, but any weakness is seen limited to a test of 1.3465, with 1.3510 marking a shift back to range trading. Over the coming weeks, downside risk persists toward 1.3415, while the broader 1.3210–1.3655 range dominates the 1–3 month outlook.

Pound retains controlled downside bias"24-HOUR VIEW: The following are excerpts from our update yesterday, when GBP was at 1.3515: “Downward momentum is building tentatively, and today we expect GBP to trade with a downside bias, potentially testing the major support at 1.3480 (there is another support level at 1.3500). To sustain the momentum build-up, GBP must hold below 1.3545, with minor resistance at 1.3530.” GBP subsequently dropped to a low of 1.3475, rebounded to 1.3515 before closing 0.23% lower at 1.3485. Although downward momentum has slowed somewhat, the bias for GBP today remains on the downside. However, any decline is likely limited to a test of 1.3465. On the upside, a breach of 1.3510 would indicate that GBP is likely to range-trade rather than trade with a downside bias."

"1-3 WEEKS VIEW: In our most recent narrative from Monday (31 Aug, spot at 1.3540), we highlighted that “the risk for GBP remains on the downside, and the level to watch is 1.3480.” Yesterday, GBP met the technical target, dropping to a low of 1.3475. While the downside risk for GBP remains intact, there has been no clear increase in downward momentum, and it is left to be seen whether the next technical target at 1.3415 is within reach. On the upside, a breach of 1.3545 (‘strong resistance’ level previously at 1.3570) would indicate that the downward pressure from last Friday has eased."

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

By

:

Published: Sep 3, 2026, 07:47 GMT+00:00

$1.35009

+0.13%

Key Points:ADP employment rose by 38,000 versus 48,000 expected, reinforcing signs that U.S. hiring momentum is cooling.Friday's Nonfarm Payrolls report is now the crucial test for whether markets maintain elevated September Fed hike expectations.The ECB retains a comparatively hawkish backdrop as higher eurozone inflation keeps further tightening expectations alive.

GBP/USD

+0.13%

GBP/USD ForecastEUR/USD

+0.14%

EUR/USD ForecastUS Dollar News: Soft ADP Data Tests Fed Hike Conviction The greenback has begun the month with its momentum challenged by the more recent labor data. The August ADP report was 38,000 compared to the 48,000 report that economists expected, and also showed a loss of jobs in manufacturing as well as professional and business services. The report supports signs of cooling hiring, and was lower for Treasury yields. Even with the reports, futures still hint at a 60%–65% likelihood of a rate hike in September by the Fed. Fed Chair Kevin Warsh also kept a hawkish stance at Jackson Hole with his speech, keeping expectations of a rate hike high. Friday’s employment data will be the last big report with the potential to change expectations, and a weak report will drop the likelihood of a rate hike.

The euro still supports a firm policy with eurozone inflation reaching 3.3% in August from July’s 2.9%. This increase was largely due to the Iran conflict and the resulting energy costs. The markets have priced in the expected 25 basis point increase with the deposit rate most likely to reach 2.50% for this hike. With core inflation reaching 2.4%, a more cautious slow pace of tightening is expected, rather than a prolonged hiking period.

Sterling is facing the harder of the two domestics. Gilt yields for the ten year have reached their highest level since 2007 at 5.294% with energy costs, inflation, and fiscal concerns and spending all reaching a high prior to the October budget. The BoE is still expected to hold Bank Rate at 3.75% in September, but a 25 basis point hike is expected in the coming year at later dates.

The movement of the FX theme for September 3 is expected to be data-dependent. Soft U.S. hiring diminishes the conviction of the Fed Funds rate hike, and the ECB retains the most compelling case for forward tightening. In the meantime, fiscal stress is holding back GBP, despite higher than desired inflation.

For September 3, the FX theme appears to be increasingly data dependent. Soft U.S. hiring diminishes the conviction of the Fed Funds rate hike, and the ECB maintains the most persuasive case for front-running tightening.

U.S. Dollar Index Technical Analysis: DXY Breaks Rising Structure as 99.12 Support Comes Into Focus Dollar Index Price Chart – Source: Tradingview The U.S. Dollar Indexis currently trading at 99.23 on the 2-hour chart after dropping below the recovering channel from the August lows. What is interesting is how quickly the index was rejected at the 99.80 – 99.86 range. DXY lost 99.62, 99.48, and 99.35 very quickly, which shows how much the structure of the bullish recovery has weakened.

The first area I will be watching is 99.12, as the downwards support zone begins there. Breaking below this would expose 98.90, 98.72, and 98.56. In the opposite direction, looking at the previous support zone of 99.35 – 99.48 and adding 99.62, the resistance zone starts to form there.

RSI has dropped and begun to enter oversold territory, so a bounce in the index is possible, but I also believe that the DXY will drop furtherwhen trading below the 99.48 range. I will reverse that opinion if the index breaks above the 99.62 range, but I believe the rallies will be corrective in nature rather than a strong downtrend.

GBP/USD Technical Analysis: Sterling Bounces From 1.3477 but 1.3526 Resistance Keeps Bears in Control

GBP/USD Price Chart – Source: Tradingview Currently, GBP/USD is trading at the 1.3500 level on the 4-hour chart as price rebounds from the support zone of 1.3477. What I want to point out is that price is bouncing out of a support zone, but is below both moving averages and the 1.3526 support area which is now an area of resistance.

1.3526 is the first resistance area, followed by the resistance area of 1.3565 and 1.3601. Beyond those, resistance is expected to cluster around the area of 1.3656-1.3676. 1.3477 is the next support area, with potential support at 1.3435 and 1.3400 should 1.3477 break.

RSI is recovering from deeply oversold territory. This leads to believing that the pair may continue to climb, however, I am still bias to the below 1.3526 and 1.3565 bearish resistance zone. Should 1.3565 bullish resistance zone break, I will black a resistance call. Until then I believe this is a corrective rally in a weaker bullish short-term trend.

EUR/USD Technical Analysis: Euro Rebounds From 1.1571 but 1.1610–1.1625 Is the Real Test EUR/USD Price Chart – Source: Tradingview EUR/USD is currently trading at 1.1608. The pair has been bought aggressively on the 1.1571 support level, and what has been interesting is how quickly the pair has bounced from oversold levels. That said, the level that is currently more important is the previous support zone and the descending trendline.

The pair has bounced directly into the zone, rather than the bounce itself.

1.161–1.1625 and 1.1659 are immediate resistance level regions currently. Above 1.1659, buyers would be focused on 1.1686 and 1.1711. Sellers continue to define 1.1571 as the first major support level on the downside with 1.1547 and ultimately 1.1517.

RSI recovering in oversold territory favors the bullish scenario. I’m neutral, but I favour market bears, as long as EUR/USD is below 1.1625. A decisive close above 1.1625 would lead me to a more bearish outlook. A retest of the area around 1.1571 would also be of interest.

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Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.

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The NZD/USD pair posts modest gains around 0.5855 during the early European trading hours on Thursday, supported by stronger-than-expected Chinese economic data. Attention will shift to the US August employment data, which will be released later on Friday.

China’s services activity expanded at a faster pace in August, with the Services Purchasing Managers' Index (PMI) rising to 51.4 from 50.4 in July, RatingDog showed on Thursday. This figure came in above the market consensus of 50.6. This report provides some support to the China-proxy Kiwi, as China is a major trading partner of New Zealand.

On the other hand, Federal Reserve (Fed) Chair Kevin Warsh’s speech at the Jackson Hole symposium has bolstered expectations of a rate hike in September. Warsh said last week that recent inflation data had been moderate, but this was not enough to consider underlying inflation trends to have improved substantially. Warsh further stated that the Fed must be confident that inflation is moving toward the target level clearly and quickly enough. 

His hawkish comments could underpin the Greenback and act as a headwind for the pair. The probability of a Fed rate hike in September rose to 66.1% after Warsh’s speech, according to CME Group FedWatch tool. 

RBNZ lifts rates as Commerzbank highlights gradual withdrawal of stimulusAccording to analysts at Commerzbank, the Reserve Bank of New Zealand has raised the Overnight Cash Rate (OCR) by 25bp to 2.75% “as expected,” with policymakers judging that “a gradual removal of monetary stimulus was appropriate to return inflation sustainably to the target.” The bank notes that the move underscores the RBNZ’s focus on carefully normalising policy while keeping inflation anchored within its mandated range.

Technical Analysis: Rallies of NZD/USD could remain limited in the near termIn the daily chart, NZD/USD is consolidating after its recent pullback, holding just above the 100-day simple moving average (SMA) and the lower Bollinger band, which together define a tight demand zone. However, the Relative Strength Index (14) at 43.46 stays below the midline and hints at mildly bearish momentum, suggesting that rallies could remain limited while this indicator fails to recover toward 50.

On the topside, initial resistance level emerges in the 0.5900-0.5910 zone, representing the psychological level and the Bollinger middle band. A stronger supply anticipated at the upper boundary of the Bollinger Band near 0.5988.

On the downside, the immediate support level is seen at the 100-day SMA at 0.5845, followed by the lower limit of the Bollinger band at 0.5827. A clear break would open the door to the July 27 low of 0.5771. 

(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 Pound-New Zealand Dollar rate could hold above NZ$2.30 if the Kiwi remains pressured by dovish RBNZ guidance, although cautious BoE signals may weigh on Sterling. The Pound to New Zealand Dollar (GBP/NZD) exchange rate jumped to a six-week high on Wednesday in the wake of the Reserve Bank of New Zealand’s (RBNZ) latest interest rate decision.

At the time of writing, GBP/NZD was trading at around NZ$2.3189. Up around 1.1% from the start of Wednesday's session.

Latest — Exchange Rates:

Pound to New Zealand Dollar (GBP/NZD): 2.310327 (+0.76%)

Euro to New Zealand Dollar (EUR/NZD): 1.985161 (+0.94%)

New Zealand Dollar to Dollar (NZD/USD): 0.583857 (-0.94%)

DAILY RECAP:

The New Zealand dollar (NZD) plunged on Wednesday despite the Reserve Bank of New Zealand (RBNZ) delivering another interest rate hike,

The RBNZ raised its Official Cash Rate (OCR) by 25 basis points to 2.75%, following its September policy meeting, marking its second consecutive hike after raising rates in July.

However, as the decision itself was widely anticipated, much of the subsequent market reaction centred on the RBNZ’s forward guidance.

This saw the 'Kiwi' tumble as policymakers suggested that hiking this month reduces the risk that the OCR needs to rise again later.

While able to roar higher against the New Zealand Dollar, the Pound (GBP) was left muted against most of its other peers on Wednesday.

Sterling sentiment was muted amid a continued rise in UK borrowing costs, with UK 10-year yields hitting their highest levels since 2008, while 30-year yields climbed to a 28-year high.

The rise in borrowing costs is not unique to the UK, with global bond yields surging over the past couple of days amid growing inflation concerns and expectations for further monetary tightening from central banks.

However, the rise in UK borrowing costs is particularly concerning as the government prepares to deliver its Autumn Budget next month, reducing the amount of fiscal headroom that Chancellor John Healey has to work with.

Near-Term GBP/NZD Forecast: Focus Shifts to BoE Bailey Turning to the second half of the week, the next key catalyst of movement for the Pound to New Zealand Dollar (GBP/NZD) exchange rate will be a scheduled speech by Bank of England (BoE) Governor Andrew Bailey on Friday.

Fresh global inflation concerns have recently bolstered expectations the BoE will tighten monetary policy later in the year.

However, Bailey has previously been cautious in regard to potential rate hikes, which could place significant pressure on the Pound later in the week if he strikes a similar tone.

Meanwhile, the fallout from the RBNZ's rate decision as well as global bond market jitters could see the 'Kiwi' languish through the latter half of the week.

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

NZDCAD : ⬇️ Sell

– NZDCAD reversed from resistance zone

– Likely to fall to support level 0.8050

NZDCAD currency pair recently reversed from the resistance zone between the multi-month resistance level 0.8258 (which has been reversing the price from February) and the upper daily Bollinger Band.

The downward reversal from this resistance started active minor ABC correction ii which just broke the key support level 0.8120 – that stopped earlier wave iv, b and 2.

NZDCAD currency pair can be expected to fall further to support level 0.8050 (low of the previous minor correction ii).

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The GBP/USD pair trades in positive territory around 1.3490 during the early European trading hours on Thursday, bolstered by a weaker US Dollar (USD). Traders await the Bank of England (BoE) Governor Andrew Bailey’s speech and US August jobs data later on Friday for fresh impetus. 

Federal Reserve (Fed) Chair Kevin Warsh delivered unexpectedly hawkish remarks at the Jackson Hole meeting last week, boosting market expectations for a rate hike next month. Warsh pledged to return inflation to the 2% target and indicated rates could rise further. 

“The emphasis on inflation risks, together with Warsh’s explicit commitment to achieving price stability and his reluctance to pre-commit to future policy actions, reinforces the elevated risks of policy tightening this year, although it could also be the case of talking without action, said UOB analysts. 

On the UK’s front, BoE policymaker Catherine Mann said that the UK economy had shown signs of ‌stronger growth since the last monetary policy meeting. Mann added that the labour market had stabilised and inflation had been a little stronger than expected.

Financial markets on Tuesday were fully pricing a BoE rate hike by the end of the year but only around 15% odds of a rate increase at the September policy meeting, according to Reuters. 

Pound sentiment steady as UK politics offer few fresh cuesStrategists at Scotiabank note that the domestic political backdrop remains quiet, with “political developments… equally limited, offering little to market participants in search of domestic drivers.” They “continue to highlight the importance of sentiment – specifically, politically-related sentiment – in driving the recent strength in the Pound following the arrival of PM Burnham in late June,” even as the current lack of new policy signals leaves investors with fewer fresh catalysts to trade on.

Technical Analysis: GBP/USD retains a mildly bullish tone above the 100-day SMAIn the daily chart, GBP/USD maintains a mildly bullish near-term bias as it holds above the 100-day Simple Moving Average (SMA) and the lower Bollinger band, suggesting underlying demand on dips. However, price remains capped beneath the Bollinger middle band, while the latest 14-day Relative Strength Index at 46.8 points to subdued momentum rather than a strong trending move.

On the topside, initial resistance is located at the Bollinger middle band at 1.3550. A stronger barrier is seen at the May 8 high of 1.3637, en route to the upper Bollinger band near 1.3665. 

On the downside, the key support level to watch emerges at the 100-day SMA and the lower Bollinger band of 1.3440, forming a tight demand zone that would need to give way to signal a deeper corrective phase. A decisive break below this level could expose the July 13 low of 1.3342. 

(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.

Pound-Euro could recover if stronger UK services data supports Sterling, although rising borrowing costs and firmer ECB rate expectations remain key risks. The Pound Euro (GBP/EUR) exchange rate fell to a near two-week low on Wednesday as UK government bond yields rose to a 19-year high.

At the time of writing, GBP/EUR was trading at €1.1648, its lowest level in 13 days.

Latest — Exchange Rates:

Pound to Euro (GBP/EUR): 1.1641 (-0.15%)

Pound to Dollar (GBP/USD): 1.3489 (-0.18%)

Euro to Dollar (EUR/USD): 1.158749 (-0.03%)

DAILY RECAP:

The Pound (GBP) was subdued on Wednesday as a lack of UK economic data left Sterling without much support.

Concerns about rising government borrowing costs saw GBP struggle against some of its stronger peers. British gilt yields rose again on Wednesday, hitting their highest level since August 2007.

This raised concerns about how higher borrowing costs could constrain the UK economy and prompt tighter fiscal policy from the British government.

Meanwhile, the safer Euro (EUR) attracted some support against the increasingly risk-sensitive Pound amid a risk-off market mood.

However, the common currency’s upside potential was limited by a lack of Eurozone economic data and geopolitical concerns.

EU politicians were preparing a response after Germany formally attributed the drone attack on Leipzig airport last month to Russia, stoking fears about rising tensions between Brussels and Moscow.

Near-Term GBP/EUR Forecast: PMIs to Support the Pound? Looking forward, the final Eurozone and UK services PMIs are due out on Thursday morning, potentially impacting the Pound to Euro exchange rate.

If the data confirms that activity in the British service sector accelerated in August, Sterling could enjoy support.

The Eurozone’s latest producer price index could also affect the pairing. A surge in producer price inflation in July could boost the Euro, if it fuels consumer price inflation expectations and leads to an uptick in European Central Bank (ECB) interest rate hike expectations.

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

Gold prices rose in Philippines on Thursday, according to data compiled by FXStreet.

The price for Gold stood at 8,911.43 Philippine Pesos (PHP) per gram, up compared with the PHP 8,814.83 it cost on Wednesday.

The price for Gold increased to PHP 103,940.70 per tola from PHP 102,814.50 per tola a day earlier.

Unit measure

Gold Price in PHP

1 Gram

8,911.43

10 Grams

89,113.88

Tola

103,940.70

Troy Ounce

277,176.60

FXStreet calculates Gold prices in Philippines by adapting international prices (USD/PHP) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.

Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

(An automation tool was used in creating this post.)

Gold prices rose in United Arab Emirates on Thursday, according to data compiled by FXStreet.

The price for Gold stood at 523.79 United Arab Emirates Dirhams (AED) per gram, up compared with the AED 518.04 it cost on Wednesday.

The price for Gold increased to AED 6,109.41 per tola from AED 6,042.34 per tola a day earlier.

Unit measure

Gold Price in AED

1 Gram

523.79

10 Grams

5,237.94

Tola

6,109.41

Troy Ounce

16,291.74

FXStreet calculates Gold prices in United Arab Emirates by adapting international prices (USD/AED) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.

Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

(An automation tool was used in creating this post.)