The Mexican peso weakened to near 17.2 per US dollar after touching a more than two-year high of 16.98 on September 11th, following the US Fed’s decision to raise interest rates. The Fed increased its federal funds target rate by 25 bps to 3.75%-4.00%, as widely expected, while a majority of FOMC members projected another hike this year. The narrowing interest-rate differential is supporting the dollar. Mexico’s central bank left its benchmark rate unchanged at 6.50% at its August meeting, noting that inflation is expected to continue declining gradually and converge to the 3% target in the fourth quarter of 2027. Banxico also highlighted that Mexico’s economy rebounded in the second quarter after contracting in the previous quarter, although downside risks to growth persist. The board reiterated that it expects to keep the benchmark rate at its current level amid uncertainty over geopolitical conflicts, global trade policies, and their potential impact on inflation.

Mexican Peso Weakens After Fed Rate Hike

The South Korean Won touched 1389.00 against the USD, the lowest since August 2026. Over the past 4 weeks, US Dollar South Korean Won lost 0.01%, and in the last 12 months, it decreased 0.63%.

South Korean Won Hits 4-week Low

The dollar index rose to 100.4 on Friday, its highest level in one-and-a-half months, continuing to benefit from the latest FOMC decision and a weaker yen. The Federal Reserve raised the target range for the federal funds rate by 25bps to 3.75%-4%, as expected. The Fed also signalled at least one more rate hike this year, while Chair Warsh reaffirmed the central bank’s commitment to taming inflation, helping to restore market confidence in its policy stance and credibility. On the other hand, the Bank of Japan raised borrowing costs by 25bps, as anticipated, but two policymakers voted against the hike, suggesting that the central bank may not proceed with further increases as quickly as initially expected, and sending the yen lower. The dollar is up nearly 1.3% on the week.

Dollar Gains More than 1% on the Week

The Swiss franc weakened past 0.82 per USD, hitting its lowest level since May of 2025, on a widening interest rate differential with the US and selling pressure from new carry trades. The Federal Reserve's first rate hike in three years boosted greenback demand, while the Bank of Japan's policy tightening and a historic Washington–Tokyo intervention to support the yen reduced the currency's appeal as a carry-trade funding source. Traders pivoted to alternatives offering exchange-rate stability and low borrowing costs, such as the Swiss franc, selling franc loans for higher-yielding assets and pressuring the currency lower. Contrasting with other central banks, the Swiss National Bank is expected to hold its policy rate at 0% through year-end, the lowest among major economies, favoring interventions to cap excessive franc strength. Offsetting this downward pressure, persistent Middle East tensions threatening energy supplies lift safe-haven demand.

Swiss Franc Weakens to Over One-Year Low

The euro traded just below $1.15, near its weakest level since late July, and was down nearly 1% against the US dollar as traders scaled back expectations for further ECB rate hikes. The pullback came despite a more restrictive tone from the Federal Reserve, which raised rates this week and signaled scope for further tightening, following a similar move by the ECB last week. Some analysts argued that markets had gone too far in pricing additional ECB hikes, noting that higher energy prices could weigh on growth and ultimately ease inflationary pressures. Money markets now price the ECB deposit rate at just below 2.9% by December, implying roughly a 50% chance of a second hike this year. By November 2027, rates are priced at 3.39%. Elsewhere, the Bank of England held rates steady on Thursday but warned that a prolonged Middle East conflict could prompt tighter policy, while the Bank of Japan raised rates to their highest level in 31 years and signaled further tightening ahead.

Euro Nears July Low as Markets Scale Back ECB Rate-Hike Bets

The British pound was little changed at $1.337 on Friday, remaining near its weakest level since late July, as investors weighed stronger-than-expected retail sales and this week’s central bank decisions. UK retail sales rose 0.5% in August, defying expectations for a 0.2% decline and rebounding from July’s fall. Department stores led the recovery as retailers resolved stock availability issues, pointing to resilient consumer spending despite elevated energy prices and the prospect of tighter monetary policy. The Bank of England held rates steady on Thursday and said it would stop selling very long-dated gilts under its quantitative tightening programme, while warning that a prolonged Middle East conflict could prompt tighter policy. The Federal Reserve and Bank of Japan also raised rates this week and signaled scope for further tightening this year.

Pound Holds Near July Low

The Japanese yen weakened past 157 per dollar on Friday, hitting two-week lows after the Bank of Japan raised interest rates in a widely telegraphed move, with two officials dissenting to the decision.  The currency later pared its decline after Governor Kazuo Ueda said at the post-meeting press conference that the BOJ remains committed to raising rates and adjusting the extent of monetary accommodation based on changes in economic activity, prices and financial conditions. The central bank lifted its policy rate by 25 basis points to 1.25%, the highest since April 1995, as policymakers contend with persistent inflation and disruptions stemming from the Middle East. The hike was opposed by board members Toichiro Asada and Ayano Sato, highlighting some resistance to a quicker tightening cycle. Meanwhile, Japan’s core inflation eased to 1.7% in August from 1.8% in July, marking its first decline in four months.

Yen Remains Volatile as Ueda Reaffirms Tightening Path

The Nikkei 225 Index advanced 1.38% to finish at 65,019 on Friday, extending its winning streak to three sessions after the Bank of Japan raised its policy rate by 25 basis points to 1.25% in a widely telegraphed move. The decision was not unanimous, however, as board members Toichiro Asada and Ayano Sato opposed the increase, signaling some resistance to a more rapid pace of policy tightening. Despite the dissent, Governor Kazuo Ueda said at the post-meeting press conference that the BOJ remains prepared to raise rates further and adjust the level of monetary easing as economic conditions evolve. Meanwhile, official data showed Japan’s core inflation slowing to 1.7% in August from 1.8% in July, its first decline in four months. Technology and AI-related shares led the market higher after similar gains on Wall Street overnight, with Kioxia (9.4%), SoftBank Group (1.1%), Advantest (6%), Lasertec (8.7%), and Taiyo Yuden (4.2%) among the notable advancers.

Japanese Shares Rise After BOJ Decision

The Indonesian rupiah edged higher to below IDR 17,750 per U.S. dollar on Friday, snapping a six-session losing streak as oil prices retreated further, easing concerns over imported inflation. Meanwhile, policymakers continued their efforts to contain food-price volatility after headline inflation accelerated to 3.19% in August. Globally, the dollar index steadied after reaching a seven-week high, with traders assessing the Federal Reserve’s policy outlook following its latest rate decision. For the week, however, the rupiah remains on track for a decline of around 0.7%, which would halt a six-week winning streak. Sentiment was pressured by an uncertain policy outlook, as Bank Indonesia seeks to maintain an adequate interest-rate differential with the U.S. while supporting rupiah stability and economic growth. The central bank will hold its policy meeting next week after leaving borrowing costs unchanged for a second straight month in August.

Rupiah Rises But Set for First Weekly Decline in 7 Weeks

The Chinese Yuan touched 6.69 against the USD, the highest since July 2022. Over the past 4 weeks, US Dollar Chinese Yuan lost 0.55%, and in the last 12 months, it decreased 5.92%.

Chinese Yuan Hits 4-year High

The Japanese yen weakened to around 157 per dollar on Friday, touching two-week lows after the Bank of Japan delivered a widely anticipated interest-rate hike. The central bank lifted its policy rate by 25 basis points to 1.25%, its highest level since April 1995, as policymakers contend with persistent inflationary pressures and ongoing disruptions from the Middle East. The decision was not unanimous, however, with board members Toichiro Asada and Ayano Sato voting against the increase. Attention now turns to the BOJ’s guidance on the scope and timing of further policy tightening. Analysts have indicated that Japan’s tightening cycle may struggle to match the pace of Federal Reserve rate increases, following the Fed’s hawkish hike earlier this week. Meanwhile, Japan’s core inflation slowed to 1.7% in August from 1.8% in July, marking its first decline in four months.

Yen Weakens as BOJ Hikes Rates

The Indian rupee strengthened to around 95.7 per dollar, rebounding from seven-week lows as easing crude oil prices, expectations of foreign portfolio inflows linked to the National Stock Exchange’s $2.3 billion IPO and likely RBI intervention supported the currency. Brent crude fell for a third straight session to around $104.1 a barrel as hopes of alternative routes for Middle Eastern oil to reach markets outweighed supply concerns, while a modest retreat in US bond yields also provided relief. Traders expect sizeable foreign institutional investor demand for the NSE IPO, which closes for subscription on Monday. The rupee held near 96 per dollar on Thursday despite the Federal Reserve’s rate hike, recovering after likely RBI intervention and portfolio inflows linked to global equity index rebalancing. However, strong importer dollar demand and elevated oil prices remain headwinds, while the dollar stays above 100 following the Fed’s hawkish stance.

Rupee Rebounds on Lower Oil, IPO Inflows

The offshore yuan strengthened to around 6.69 per dollar on Friday, extending gains from the previous session and reaching its strongest level since July 2022, as a firmer daily fixing from the People’s Bank of China continued to support the currency. The central bank set the daily midpoint at 6.7521 per dollar, stronger than Thursday’s 6.7580, marking an upward bias in the fixing for an eighth consecutive session and the longest such run since 2023. The move indicated that the central bank may be increasingly comfortable with a stronger yuan ahead of President Donald Trump’s meeting with Chinese leader Xi Jinping in the US on September 24. A stronger currency could help alleviate some trade tensions between the two economies, as Western officials have argued that an undervalued yuan gives Chinese exporters a competitive edge. Meanwhile, US Treasury Secretary Scott Bessent is also set to meet Chinese Vice Premier He Lifeng this weekend.

Offshore Yuan Strongest Since 2022

The New Zealand dollar slipped to around $0.571 on Friday, moving back near a ten-week low after rising 0.3% in the previous session, as a firmer US dollar continued to weigh on the currency. The greenback clung to a seven-week high after the Federal Reserve hiked rates and signaled further tightening ahead. This outweighed support from better-than-expected domestic data. New Zealand’s GDP growth in the second quarter beat estimates, suggesting some resilience in economic activity despite the severe energy shock from US-Iran war. In addition, the country’s trade deficit narrowed more than anticipated in August, as export growth outpaced the increase in imports. Meanwhile, markets are pricing in a 65% chance that the Reserve Bank of New Zealand will raise its cash rate again to 3.0% at its October meeting. The kiwi was down around 1.6% so far this week, marking its fourth consecutive weekly decline.

New Zealand Dollar Falls Back

The dollar index held around 100.2 on Friday, remaining close to seven-week highs as traders weighed the Federal Reserve’s policy outlook following its latest rate decision and amid softer oil prices. The index is heading for a weekly gain of more than 1% after the FOMC unanimously lifted the fed funds rate by 25 basis points to 3.75%-4%, marking its first increase in three years. Fed officials also indicated that additional tightening could come later this year as they seek to contain rising price pressures, with Chair Kevin Warsh noting that inflation remains elevated. The Bank of Japan is also expected to raise rates, while the Bank of England left borrowing costs unchanged on Thursday but cautioned that prolonged conflict in the Middle East could eventually require a rate hike. Meanwhile, oil prices extended their decline for a third session as Saudi Arabia worked to restore flows through its East-West pipeline, easing inflation worries.

Dollar Steadies as Traders Assess Fed Outlook

The Japanese yen weakened past 156 per dollar on Friday, hovering near two-week lows as investors awaited the latest Bank of Japan policy decision, with markets widely expecting an interest-rate hike. Investors will also seek guidance on the potential for further tightening as policymakers contend with rising inflation and wages, alongside pressure from US Treasury Secretary Scott Bessent for a more aggressive pace of rate increases. Meanwhile, Japan’s core inflation eased to 1.7% in August from 1.8% in July, marking its first slowdown in four months. However, expectations that price pressures could strengthen in the coming months continued to support a hawkish BOJ outlook, with disruptions stemming from the Middle East adding to inflation risks. Earlier this month, the yen climbed to seven-month highs on expectations of more aggressive BOJ tightening, recent joint interventions by Tokyo and Washington, and prospects of greater capital repatriation by Japanese investors.

Yen Slips Ahead of BOJ Decision

The Australian dollar rose above $0.71, attempting to recover from a recent four-week low as hawkish comments from the Reserve Bank’s top official reinforced expectations for further policy tightening. Governor Michele Bullock said upside inflation risks were materializing and warned that higher costs could make inflation more persistent, pointing to the Middle East conflict, rising energy prices and stronger domestic cost pressures. Prior to the testimony, swaps markets priced at least two more rate hikes by the February meeting, with a roughly 87% chance the first occurs on September 29. That marks a notable shift from the start of September, when traders were pricing just one further hike, likely by year-end. The Aussie also benefited from a softer US dollar, alongside lower Treasury yields and easing oil prices, while a rebound in global equities provided additional support for the risk-sensitive currency.

Australian Dollar Attempts Rebound

The Brazilian real traded near R$5.15 per US dollar in September, little changed after the BCB cut the Selic rate by 25 basis points to 13.75%. The BCB left its next steps open, saying that the current environment of uncertainty calls for composure and caution in the conduct of monetary policy. It was the final monetary policy meeting before the presidential election in October. The decision was announced after the US Federal Reserve raised its federal funds target rate by 25 basis points to a range of 3.75% to 4.00%. The narrowing interest-rate differential is a factor supporting the dollar, although it had already been priced into markets, with both rate decisions coming in line with expectations. Meanwhile, gains by Flávio Bolsonaro in recent presidential election polls have supported the real, as markets view Bolsonaro as fiscally restrictive, while elevated domestic yields and weak business activity continue to weigh on the economic outlook.

Brazilian Real Steady After Selic Cut

The South African rand strengthened toward 16.2 per USD, supported by a softer dollar and firmer precious metals prices on the back of easing oil prices. Meanwhile, traders continued to monitor central bank actions. The Federal Reserve delivered an expected 25 bps rate hike and signalled that further tightening may follow amid persistent inflatonary pressures from the Middle East. Expectations for a SARB rate hike increased after the Fed's move, as a narrower yield differential could weigh on the rand and fuel inflationary pressures. The South African Reserve Bank will face a delicate balancing act when it decides on policy on September 23. Inflation has been rising and, aside from a brief dip in July following fuel-price cuts, remains on an upward trajectory. Meanwhile, the economy slipped back into contraction in the second quarter. At the same time, inflation expectations fell in Q3, signaling that price pressures are expected to ease over time.

South African Rand Firms

The British pound held just below $1.34, near its weakest level since late July, after the Bank of England kept rates at 3.75% in a 6-3 vote, and warned that rates could need to rise if inflationary pressures intensify due to the conflict in the Middle East. In prepared remarks, Governor Andrew Bailey said the global energy shock has so far had a limited impact on UK prices and wages, but warned that prolonged volatility could put greater pressure on inflation and increase the need for a rate hike. The MPC also unanimously voted to reduce its stock of UK government bond purchases to zero through a multi-year programme, with an average annual pace of £46 billion through 2034, slower than previously and below the £50 billion expected by markets. The BoE now expects inflation to reach twice its 2% target early next year, while raising its third-quarter GDP forecast to 0.4%. Meanwhile, the Fed raised rates by 25 basis points yesterday and signaled another hike later this year.

Sterling Holds Near Two-Month Low as BoE Keeps Rates Steady

The euro traded just below $1.15, remaining close to its weakest level since late July, as the dollar strengthened after the Federal Reserve raised interest rates yesterday and signaled another hike later this year. US policymakers voted unanimously to lift the benchmark federal funds rate to a range of 3.75% to 4% on Wednesday, the first increase since July 2023, as they seek to contain rising inflation. Updated FOMC projections also showed that a strong majority of officials see another hike as possible later this year. Meanwhile, investors have increased bets on further European Central Bank rate hikes amid renewed inflation concerns. Markets are now pricing the ECB deposit rate at around 2.9% by December, up from the current 2.5%. The ECB raised rates last week for the second time this year to contain an energy-driven rise in inflation, while warning that price pressures could prove persistent, reinforcing expectations for further tightening.

Euro Holds Near Two-Month Low as Fed, ECB Rate Bets Rise

The British pound traded around $1.34, its weakest level since late July, ahead of the Bank of England’s highly anticipated policy announcement, while investors were also digesting the Federal Reserve’s rate hike yesterday. No change in interest rates is expected from the BoE today, but markets will be watching closely for any signals about the future path of policy, with a November hike still priced in, albeit with less conviction as oil prices retreat for a second consecutive session. The outlook for the Middle East remains highly uncertain, however, keeping oil prices elevated and adding to the challenge facing central banks as they try to contain inflation without putting excessive pressure on economic activity. In the US, the Federal Reserve raised interest rates by 25 basis points, the first increase since July 2023, and signaled another hike later this year, as policymakers continue to grapple with persistent inflation pressures.

Sterling Under Pressure Ahead of BoE Rate Decision

The South Korean won weakened to around 1,380 per dollar, hitting a three-week low as the Fed’s rate hike and hawkish guidance lifted the dollar. The Fed raised its policy rate by 25bp to 3.75%-4.00%, its first increase since 2023, and indicated another hike could come later this year, leaving the US-Korea rate gap as wide as 1 percentage point. The wider US-Korea rate differential kept attention on the relative yield advantage of dollar assets, while the dollar index hovered near a seven-week high following the FOMC decision. Additionally, foreign investors remained net sellers of Korean assets, extending a six-straight-session selling streak and adding to demand for dollars. Meanwhile, oil prices retreated from recent highs as Saudi Arabia offered additional crude cargoes and the damaged East-West pipeline was expected to resume operations within days, offering some relief to Korea’s energy import bill, although Brent remained above $100 a barrel.

South Korean Won Hits Three-Week Low

The Indonesian rupiah slipped toward IDR 17,750 per U.S. dollar Thursday, extending its losing streak to six sessions as the dollar index climbed to a seven-week high after the U.S. Fed raised rates for the first time in three years and signaled the possibility of further tightening this year to curb sticky inflation. Locally, focus turned to Bank Indonesia’s policy meeting next week, with policymakers having kept key rates unchanged at 5.75% for a second straight month in August, following cumulative tightening of 100bp since May. Inflation risks from higher oil prices and potential El Niño effects are complicating the policy outlook, as the central bank faces the challenge of preserving an adequate interest-rate differential while supporting rupiah stability. Meantime, fiscal pressures may persist as elevated global yields and cautious foreign investor sentiment weigh on Indonesian assets. So far this week, the rupiah has fallen around 0.8%, reversing gains in the prior six weeks.

Rupiah Falls for Sixth Session After Fed Rate Hike

The offshore yuan edged higher to around 6.70 per dollar on Thursday, after holding steady in the previous session, as China broadens currency clearing in a bid to advance the yuan’s internationalization. The Shanghai Clearing House started central counterparty (CCP) services for spot trades in the Singapore dollar, New Zealand dollar and Thai baht on Sept. 14, with twelve banks clearing 996 million yuan ($148 million) in the first session. The move could set the stage for more currencies to be cleared directly against the yuan as Beijing seeks to broaden its global use, alongside efforts by Chinese banks this year to expand clients’ access to direct yuan trading amid growing cross-border trade and investment. Meanwhile, US Treasury Secretary Scott Bessent is set to meet Chinese Vice Premier He Lifeng this weekend for final preparatory talks ahead of the Sept. 24 summit between Presidents Donald Trump and Xi Jinping in the US.

Offshore Yuan Edges Higher

The Indian rupee fell to around 96.1 per dollar, extending losses to multi-week lows as elevated crude oil prices, a stronger dollar and expectations of further US monetary tightening weighed on the currency. Brent crude hovered near $108 a barrel, keeping demand for dollars from oil importers elevated, while the US 10-year Treasury yield approached 5%. The pressure intensified after the Federal Reserve raised interest rates by 25 basis points on Wednesday, its first hike since 2023, and signalled another increase could follow this year. The move pushed the Dollar Index above 100 to its highest level in more than a month, while futures indicated roughly a 50% chance of another Fed hike next month. Foreign portfolio outflows from Indian stocks and bonds added to the pressure, although a $703 million allocation of NSE shares to anchor investors and continued RBI dollar sales could provide some support.

Rupee Breaches 96 as Hawkish Fed, Oil Weigh

The Japanese yen traded around 156.1 per dollar on Thursday after sliding for three straight sessions, pressured mainly by the dollar’s strength following the latest Federal Reserve policy decision. The US central bank raised interest rates for the first time in three years and signaled additional tightening this year to contain inflation. The Bank of Japan is also expected to raise borrowing costs on Friday, with another increase anticipated by the end of January. On the geopolitical front, oil prices eased amid hopes that Saudi Arabia can restore energy flows through its East-West pipeline. The yen had climbed to seven-month highs earlier this month on expectations of more aggressive policy tightening by the BOJ, recent joint interventions by Tokyo and Washington, and prospects for increased capital repatriation by Japanese investors.

Yen Holds Decline on Hawkish Fed Outlook

The dollar index held around 100.3 on Thursday following a sharp gain in the previous session, hovering at seven-week highs after the Federal Reserve raised interest rates for the first time in three years and signaled further tightening this year to contain inflation. The FOMC unanimously increased the fed funds rate by 25 basis points to 3.75%-4%, as expected, in a unanimous decision. Fed Chair Kevin Warsh also said inflation remains too high, while data released last week showed core US inflation rose more than anticipated in August. Meanwhile, President Donald called for rates to be quickly lowered to 1% or below in a social media post, though he stopped short of criticizing Warsh. Elsewhere, the Bank of England is expected to keep rates unchanged today, while the Bank of Japan is scheduled to raise rates on Friday. On the geopolitical front, oil prices eased amid hopes that Saudi Arabia can restore energy flows through its East-West pipeline.

Dollar Towers on Hawkish Fed View

The New Zealand dollar traded around $0.571, an over two-month low, amid a hawkish US Federal Reserve, while investors assessed GDP data at home. The Fed raised interest rates for the first time in three years, bringing the target range to 3.75%-4.00%, and signaled that another hike was likely before year-end, boosting the US dollar. Limiting further losses in the kiwi, however, data showed New Zealand’s economy expanded 0.2% in the three months to June, slightly exceeding the 0.1% market forecast and the Reserve Bank's expectation for no growth. Annual GDP increased 2.6%, also beating the expected 2.2%. The figures pointed to some resilience in economic activity despite the severe energy shock stemming from the Middle East conflict. Earlier this month, the RBNZ raised rates for a second consecutive time but indicated a less aggressive tightening path. However, markets expect the cash rate to reach 3.0% by December, as the recent oil price spike has raised upside inflation risks.

New Zealand Dollar Holds Decline on Hawkish Fed

The Australian dollar held below $0.71, sitting at a four-week low after the Federal Reserve’s first interest-rate increase since 2023 boosted the US dollar, overshadowing expectations for further RBA tightening. The Fed unanimously raised its federal funds rate by 25 basis points to 3.75%-4.00% as expected, citing elevated inflation, while updated projections showed 16 of 18 officials expect at least one more hike this year. Focus now turns to the Reserve Bank of Australia’s September 29 policy decision, with markets pricing an 85% chance of a 25bp increase from the current 4.35% rate and expectations for the cash rate to reach 4.85% by early 2027. The IMF also flagged persistent inflation and rising energy prices as risks that could require further RBA hikes. Meanwhile, traders continued to monitor developments in the Iran-US war and its impact on oil prices. Crude remains above $100 per barrel, although prices are easing as Saudi Arabia works to restore pipeline capacity.

Australian Dollar Holds at 1-Month Low

The Canadian dollar weakened to near 1.40 per USD in mid-September, its lowest level in more than a month after the US Federal Reserve raised interest rates as expected. The Fed raised the target range for the federal funds rate by 25 bps to 3.75%-4%, reinforcing the US dollar’s advantage over the loonie. Updated Fed projections showed that most policymakers expect another hike before the end of 2026, widening the interest-rate differential between the US and Canada. The Bank of Canada kept its key policy rate unchanged at 2.25% at its September meeting, as widely expected. However, it noted that inflation risks had increased, while new tariffs had made the growth outlook more uncertain. The BoC left the future path of monetary policy open, saying it would adjust policy as needed. Governor Macklem said policymakers were prepared to raise rates if inflation remained elevated.

Canadian Dollar Weakens After Fed Hike

The dollar index rose past the 100 for the first time in nearly seven weeks on Wednesday after the Federal Reserve raised interest rates by 25bps. The decision was unanimous among the FOMC and expected by markets after recent data pointed to elevated gauges of underlying inflation, low unemployment, and a sharp rebound in retail sales that underscores the strong position of consumers despite higher price growth. Projections by the policy-setting committee pointed to a loose consensus that at least one other hike is warranted this year, while unemployment was revised lower and economic growth was revised higher. The decision supported the dollar after earlier remarks by Chairman Warsh raised skepticism over the Fed's willingness to fight inflation through higher policy rates instead of other tools, rekindling a dash to precious metals and other safe currencies. In the meantime, the Bank of England is expected to hold rates unchanged tomorrow, while the Bank of Japan is due to hike.

US Dollar Rises to 7-Week High

AUDUSD decreased to 0.71, the lowest since August 2026. Over the past 4 weeks, Australian Dollar US Dollar gained 0.02%, and in the last 12 months, it increased 6.84%.

Australian Dollar Hits 4-week Low

The Swedish Krona touched 9.82 against the USD, the lowest since August 2025. Over the past 4 weeks, US Dollar Swedish Krona gained 3.2%, and in the last 12 months, it increased 5.75%.

Swedish Krona Hits 13-month Low

The Swiss Franc touched 0.82 against the USD, the lowest since June 2025. Over the past 4 weeks, US Dollar Swiss Franc gained 1.33%, and in the last 12 months, it increased 4.22%.

Swiss Franc Hits 15-month Low

DXY increased to 99.86, the highest since August 2026. Over the past 4 weeks, Dollar Index gained 0.17%, and in the last 12 months, it increased 3.03%.

Dollar Index Hits 4-week High

The Canadian Dollar touched 1.39 against the USD, the lowest since August 2026. Over the past 4 weeks, US Dollar Canadian Dollar gained 0.48%, and in the last 12 months, it increased 1.23%.

Canadian Dollar Hits 4-week Low

The South African rand traded around 16.3 per USD, holding close to its lowest since early August, as the US dollar's strength and still elevated oil prices outweighed support from precious metals prices. Meanwhile, market sentiment remained fragile amid heightened hostilities in the Middle East and further advances by the Houthis. On the domestic economic front, a closely watched gauge of South African inflation expectations fell in the third quarter after surging in the previous quarter due to the oil shock triggered by the US-Iran conflict. The data prompted investors to reduce bets on a possible 25 bps rate hike at the SARB's upcoming policy decision on September 23. Meanwhile, headline inflation eased to 4.3% in July from 5% in June, but the moderation could prove temporary due to domestic fuel price adjustments in August and September. Market participants now wait for inflation figures for August, due next week.

South African Rand Remains Subdued

The euro stabilized around $1.155, close to its weakest level in a month, as the US dollar remained supported ahead of today’s Federal Reserve decision. US policymakers are widely expected to raise interest rates by 25 basis points, marking the first hike in three years, with markets also looking for guidance on the prospect of further tightening. Meanwhile, investors have increased bets on further European Central Bank rate hikes amid renewed inflation concerns. Markets are now pricing the ECB deposit rate at around 2.9% by December, up from the current 2.5%. Further out, the rate is seen reaching 3.4% by November 2027, fully pricing a third hike and implying roughly a 50% probability of a fourth. The ECB raised rates last week for the second time this year to contain an energy-driven rise in inflation, while warning that price pressures could prove persistent, reinforcing expectations for further tightening.

Euro Holds Near One-Month Low Ahead of Fed Decision

The British pound steadied just below $1.35, hovering around its weakest level since early August, as investors digested an in-line UK inflation report ahead of interest rate decisions from both the Bank of England and the US Federal Reserve. UK annual inflation accelerated to 3.1% in August from 2.9% in July, in line with expectations and largely reflecting higher fuel costs. Core CPI, which strips out more volatile components, was unchanged at 2.6%, while services inflation, a key focus for the Bank of England, came in at 3.4%, slightly below expectations of 3.5%. No rate change is expected from the BoE on Thursday, while a November hike remains priced in with less conviction. Markets have also pared back expectations for hikes through the end of next year, with four now priced versus five previously. Elsewhere, the US dollar remained supported ahead of the Fed decision, with policymakers widely expected to raise rates for the first time in around three years.

Sterling Steadies Ahead of BoE and Fed Decisions

The Indonesian rupiah slipped past IDR 17,700 per U.S. dollar on Wednesday, extending its losing streak to five sessions as the dollar index hit a one-month high ahead of the Fed’s policy decision. Markets widely expect the central bank to deliver its first rate hike in around three years, keeping the greenback supported and weighing on emerging-market currencies. Locally, headwinds persisted, with factory activity still weak in August, household sentiment fragile, and retail sales growth slowing. External risks also mounted as crude oil rose above US$100 per barrel amid escalating Middle East tensions, while elevated global yields and cautious foreign investor sentiment added pressure on Indonesian assets. These developments could complicate inflation and fiscal management for new Finance Minister Suahasil Nazara. Bank Indonesia will hold a policy meeting next week after leaving its key rate unchanged for a second month in August, following cumulative tightening of 100bp since May.

Rupiah Slides for 5th Session Ahead of Fed Decision

The New Zealand dollar fell further to $0.574, its lowest level in over two months, as traders prepared for a widely anticipated Federal Reserve rate hike later today, supporting the US dollar. Markets will also watch the Fed’s updated dot plot and economic projections for clues on future rate moves. Investors’ attention is also on New Zealand’s second-quarter GDP data on Thursday, with economists expecting only modest growth from the previous quarter. Market pricing currently implies another rate hike from the Reserve Bank at its October meeting, even as policymakers signaled a slower pace of rate increases. Meanwhile, RBNZ Assistant Governor Karen Silk has resigned after more than four years with the bank. Silk will participate in two more MPC meetings before departing in mid-December.

Kiwi Drops Further Ahead of Fed Decision

The Japanese yen weakened past 155 per dollar on Wednesday, extending its decline for a third consecutive session as the dollar strengthened ahead of an expected interest rate hike by the US Federal Reserve. The yen also came under pressure from rising oil prices, which are increasing import costs for Japan’s oil-dependent economy. Still, the Japanese currency remains supported by expectations of more aggressive policy tightening by the Bank of Japan, recent joint interventions by Tokyo and Washington, and prospects for greater capital repatriation by domestic investors. Markets are currently pricing in roughly an 80% chance of a BOJ rate hike on Friday, with another increase expected by the end of January. Meanwhile, data showed that Japanese exports rose more than anticipated in August, supported by strong demand for AI-related chips despite ongoing supply disruptions stemming from the conflict in the Middle East.

Yen Declines for Third Straight Session

The dollar index climbed to around 99.7 on Wednesday, nearing its highest level in a month as investors awaited the latest Federal Reserve policy decision, with the central bank widely expected to deliver its first rate hike in around three years. Markets are currently pricing in roughly a 92% probability of a 25-basis-point rate increase as policymakers seek to contain inflationary pressures. Traders will also look for signals on another potential hike later this year, with expectations building for a move in October or December. Meanwhile, some analysts cautioned that the dollar could weaken sharply if the Fed does not signal further rate increases or opts to keep rates unchanged. The dollar also moved higher alongside Treasury yields amid rising energy costs, intensifying inflation risks, and growing fiscal concerns. The US 10-year Treasury yield briefly topped 5% to the highest levels since 2007.

Dollar Firms Up Ahead of Fed Decision

The Australian dollar steadied around $0.71, holding its recent decline near a four-week low as a firmer US dollar and higher Treasury yields weighed on the currency ahead of the Federal Reserve’s policy decision. The greenback strengthened as markets widely expected the Fed to raise interest rates by 25 basis points, its first increase in around three years, while the US 10-year Treasury yield climbed above 5%, its highest level since 2007, as surging oil prices and persistent inflation concerns reinforced expectations for tighter policy. Oil prices held near a four-month peak above $105 a barrel after fresh Houthi attacks on Saudi Arabia and the postponement of Gulf-Iran talks. Domestically, the Reserve Bank of Australia’s hawkish stance continues to provide some support, with markets pricing an 85% probability of a rate increase to 4.60% at its September 29 meeting. Investors now await comments from Governor Bullock, which is scheduled to appear before Parliament on Friday.

Australian Dollar Under Pressure Ahead of Fed Decision

The Hong Kong Dollar touched 7.84 against the USD, the lowest since August 2026. Over the past 4 weeks, US Dollar Hong Kong Dollar lost 0%, and in the last 12 months, it increased 0.82%.

Hong Kong Dollar Hits 4-week Low

The South African rand weakened to around 16.3 per USD, the lowest level since early August, pressured by a stronger US dollar and higher oil prices. The greenback strengthened ahead of an expected Fed rate hike, weighing on emerging-market currencies. Meanwhile, the oil shock is particularly significant for South Africa because the country relies on imports to meet much of its energy needs, raising both the import bill and inflation risks. Falling gold and other precious metals prices are adding to the strain by reducing the value of key export revenues.

South African Rand at Over 1-Month Low

The Indonesian rupiah weakened toward IDR 17,700 per U.S. dollar on Tuesday, extending losses for a fourth straight session as the U.S. dollar index firmed ahead of the Fed’s policy decision later this week. Locally, elevated oil prices heightened inflation concerns after headline figures accelerated to 3.19% in August. As a net oil importer, Indonesia remains vulnerable to higher global energy costs, which could add pressure to both inflation and the fiscal position. On the policy front, Bank Indonesia is set to hold its next meeting next week after keeping its benchmark rate unchanged for a second consecutive month in August, following a cumulative 100bp tightening since May. Meanwhile, Suahasil Nazara was sworn in as new finance minister, replacing Purbaya Yudhi in a surprise reshuffle, the third change in less than two years. Suahasil pledged budget discipline, including the 3% deficit cap, as external headwinds mount from rising U.S. Treasury yields and oil above $100 per barrel.

Rupiah Falls for 4th Session Amid Dollar, Oil Pressures

The South Korean won weakened to around 1,353 per dollar, retreating from a near two-year high amid rising expectations for tighter Federal Reserve policy. Markets were pricing in a roughly 92% chance of a 25-basis-point rate hike this week, while the 10-year Treasury yield remained elevated near 5%, keeping the dollar firm. Higher crude prices also added to inflation risks, with oil climbing above $100 a barrel amid escalating Middle East tensions and raising concerns over higher energy import costs for South Korea. A vessel was recently struck in the Strait of Hormuz, while Saudi Arabia kept its East-West crude pipeline shut following drone attacks, threatening further disruptions to regional oil supplies. Foreign investors also sold a net 3.2 trillion won of local stocks, adding to the won’s decline. Meanwhile, persistent semiconductor exporters’ dollar sales helped limit the won’s losses.

South Korean Won Weakens Further

The Indian rupee fell to around 95.8 per dollar, remaining near seven-week lows as persistent oil price gains, elevated US Treasury yields and growing expectations of a Federal Reserve rate hike weighed on the currency. Brent crude rose above $107 a barrel, extending its monthly rally to more than 18%, as stalled US-Iran talks, fresh Houthi attacks on Saudi Arabia and disruptions to energy infrastructure heightened concerns over supply shortages. The surge in oil prices fueled inflation worries and pushed the US 10-year Treasury yield to 5% for the first time in nearly three years, while markets see a Fed rate hike on Wednesday as almost certain. Meanwhile, the RBI has repeatedly intervened near 95.80 per dollar, helping limit further losses. Market participants also digested fresh data as India’s inflation rate rose to 4.82% in August from 4.45% in July, its highest since December 2024 and in line with expectations, reflecting renewed energy price pressures and a weaker rupee.

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