The euro slipped against a mixed dollar on Friday after slightly hotter-than-expected U.S. CPI boosted expectations of a Fed rate hike next week to a near certainty.

Headline CPI increased 0.4% in August, matching the median estimate, while the core reading rose an above-forecast 0.3%, its largest increase since April. Annual readings of 3.4% and 2.4%, respectively, remain above the Fed target of 2%.

Markets odds of a Fed hike next week jumped to 90% from about 70% on Thursday.

U.S. consumer sentiment weakened in early September as higher gasoline prices and trade tensions fueled inflation concerns.

WTI oil held near $100/bbl as Iran planned a regional meeting to discuss commercial shipping routes, while Houthi militants advanced in Yemen.

EIA said Saudi Arabia's crude supply fell to its lowest level in more than three decades in August.

As an energy summit approaches, the White House is considering using the Defense Production Act to boost U.S. refining capacity.

ECB President Christine Lagarde said the central bank will remain data-dependent, while chief economist Philip Lane warned that energy prices could hit consumption this autumn.

On the eve of a BRICs summit, Indian Prime Minister Narendra Modi and Russian President Vladimir Putin agreed to deepen India-Russia ties.

DXY edged up and the volatility curve steepened with one-month DYX implieds slipping to 5.48% as bearish risk reversals eased.

EUR/USD eased amid Fed tightening expectations though failed to move out of its September range near 1.16 as bearish momentum faded.

EUR/CHF rose to its highest level since April 2025, with Swiss National Bank Chairman Martin Schlegel warning that higher energy prices are boosting hike expectations outside Switzerland.

GBP/USD remained rangebound despite firmer Fed hike odds as resilient UK data keeps sterling underpinned above its 1.3475 September low, with nearby resistance around 1.3550.

USD/JPY slid after failing to hold CPI-driven gains, though momentum eased near its 153.30 100-week moving average as U.S. shares and yields advanced, leaving resistance in place near 154.60 and the 155 pivot level.

AUD/USD rebounded from a CPI-driven drop to 0.7150 and recovered to 0.7187; a move back above the 21-DMA keeps the bias bullish, with support at 0.7150 and resistance at 0.7187.

Treasury yields were up as much as 8 basis points as the curve flattened. The 2s-10s curve fell about 4 basis points to +32.6bp, lowest since July.

The S&P 500 rose nearly 1%, fueled by tech and consumer shares.

WTI oil slid 2.2%, pulling back from a near 4-month high above $100/bbl.

Gold gained 1.1% on broadly higher precious metal prices while copper was flat.

Heading toward the close: EUR/USD -0.16%, USD/JPY -0.44%, GBP/USD +0.07%, AUD/USD +0.19%, DXY +0.10%, EUR/JPY -0.61%, GBP/JPY -0.38%, AUD/JPY -0.24%.(Editing by Burton Frierson Robert Fullem is a Reuters market analyst. The views expressed are his own)

• NY opened near 0.7170 after AUD/USD moved upward in overnight trading

• The pair fell sharply as USD, US yields rallied after Aug. CPI

• The pair fell below the 21-DMA, hit a 7-session low of 0.7150

• Post-CPI USD, yield gains were quickly erased however & both turned down

• Gold, silver, copper, equities rallied sharply and USD/CNH turned lower

• AUD/USD rallied above the 21-DMA, hit the 10-DMA traded 0.7187

• Diverging daily RSI, move back above 21-DMA give daily techs a bullish lean
audusd

(Christopher Romano is a Reuters market analyst. The views expressed are his own)

Bank of America Global Research reviews today's US August CPI report.

"Headline CPI rose 0.4% m/m, in line with expectations. However, core CPI came in firmer than expected at 0.3% m/m (0.29% unrounded), leaving the y/y rate unchanged at 3.4%. The details also prompted us to revise our August core PCE tracking estimate up from 0.26% m/m to 0.30% m/m.," BofA notes.

"Combined with current market pricing of 21bp for next week's FOMC meeting, today's report should greenlight a Fed hike," BofA adds.

• GBP/USD choppy in NY trade, U.S. CPI core m/m came in firm, but the move lacks conviction

• Dollar’s failure to bid on ostensibly positive data suggests the path of least resistance is lower

• Market-implied odds now price an 87% chance of a Fed hike next week, up from 67% pre-CPI

• UK GDP beat forecasts, supporting a more constructive tone for sterling

• Meanwhile, the currency remains surprisingly resilient to the moves higher in yields and oil

• Spot essentially flat on the week, underscoring ongoing indecision
GBPUSD daily chart

Justin McQueen is a Reuters market analyst. (The views expressed are his own). ((Email: ))

ANZ Research discusses the key EUR/USD technical levels to watch going into next week's FOMC meeting.

"Positioning is becoming more supportive. EUR/USD noncommercial net shorts narrowed, leaving scope for further short covering if ECB expectations remain firm. Next week’s euro area ZEW survey data are the key domestic releases. However, the FOMC will likely be the larger catalyst for EUR/USD through its impact on relative rate expectations," ANZ notes.

"Technicals remain constructive but momentum is flattening, consistent with consolidation ahead of the FOMC rather than trend continuation. EUR/USD is trading between 1.1615, the 38.2% retracement of the January–June decline, and 1.1634, the 200- dma. The 50- and 100-dma are rising and providing support at 1.156 and 1.153 beneath. Firm ECB pricing and scope for further short covering favour a break above 1.1634, with initial resistance at 1.1709 and then 1.175.

Dips towards 1.159 should remain supported, although a hawkish Fed and a close below 1.153 would leave the pair vulnerable to a deeper pullback," ANZ adds.

EUR/USD slipped to a seven-session low on Friday after U.S. August month-on-month core CPI surprised to the upside, triggering a spike in the U.S. interest rate complex and dollar as markets raised the odds of a Fed rate hike next week and beyond. Despite this near-term pressure, however, the pair retains upside potential if those hikes actually materialize.

The stronger-than-expected core CPI print boosted the probability that the Fed will hike rates next week. If the Fed follows through and signals that its inflation fight is far from over, it would point to further tightening ahead and underscore the central bank's seriousness about controlling inflation.

Interestingly, price action at the long end of the Treasury curve hinted that this inflation battle may already be underway: after spiking to fresh multi-year and multi-decade highs, both 10-year and 30-year yields reversed course and moved lower.

This reversal suggests a broader dynamic—if the Fed's anti-inflation stance is genuine, economic growth could slow, eventually forcing the Fed toward rate cuts down the road. The pullback in Treasury yields and the dollar may already reflect investors positioning for that outcome.

Should this scenario continue to unfold, the dollar could find it difficult to sustain a rally and might instead weaken further as market participants unwind long-dollar positions. A softer dollar backdrop would be supportive for EUR/USD, potentially fueling a rally toward the 2025 yearly high.
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us30y


us10y

(Christopher Romano is a Reuters market analyst. The views expressed are his own)

Bank of America Global Research highlights some of the key findings from its September FX and rates sentiment survey.

"Both sentiment and positioning turned more bearish on the US dollar. In rates, sentiment remained modestly bearish and near its post-2022 lows, while positioning shifted to a slight underweight from neutral. The spread between US and core European duration exposure points to a meaningful relative underweight in US rates," BofA notes.

"EUR FX sentiment and positioning improved further in September. In core Europe, positioning turned somewhat overweight despite sentiment turning neutral. In peripheral Europe, both positioning and sentiment remained close to neutral levels, albeit low relative to recent history," BofA adds. 

CIBC Research reviews the US August inflation report.

"A hotter than expected core reaffirms the odds of a Fed hike at the next FOMC meeting. Although total CPI came in line with consensus at 0.4% m/m in August, core CPI surprised on the upside at 0.3% (consensus: 0.2%). The acceleration on headline was driven largely by a rebound in gasoline prices as expected. The core measure, rose 0.3% after a 0.2% monthly pace in July. Although core goods posted a modest 0.1% gain, shelter accelerated due to a rebound of lodging away from home (hotels) after two consecutive monthly declines. Public transportation services also posted solid increase for the month due to a small pick up in air fare, which could have been impacted by the higher fuel prices. The annual pace of total CPI held steady at 3.4% from July to August, while core CPI eased slightly from 2.5% to 2.4% (saved by rounding, unrounded was 2.446%)," CIBC notes.

"With core CPI running hotter than consensus on a monthly basis, and accelerated from July's pace, we now think this would tip most FOMC members over in favour of a hike in the upcoming FOMC meeting next week," CIBC adds.

• 0.7176-0.7151 traded overnight, a 7-session low was struck

• The drop was aided by US yield gains, AUD/JPY drop

• AUD/USD rallied off the low, neared 0.7170, was up +0.18% early NY

• Gold, silver, equities rallies & USD/CNH drop helped lift AUD/USD

• The pair rallied back above the 21-DMA, daily RSI diverged on today's low

• US Aug. CPI in focus, an above estimate result could send AUD/USD down
audusd

(Christopher Romano is a Reuters market analyst. The views expressed are his own)

• Cable gravitates to 1.3500-10 option expiries before US CPI data at 1230 GMT

• 1.3527 was early London high, after unexpectedly positive UK July GDP

• US August CPI is forecast up 0.4% MM, 3.4% YY; core f/c 0.2% MM, 2.4% YY

• Hotter prints might lift dollar, depress GBP/USD to/through 1.3475

• 1.3475 was three-week low last week (1.3493 was Thursday low)

• UK inflation expectations fall after BoE changes survey provider

GBPUSD

(Robert Howard is a Reuters market analyst. The views expressed are his own)

Sept 11 (Reuters) - USD/JPY's latest recovery attempts will likely by limited by key technical resistance, which should keep the overall bias on the downside.

The USD/JPY continues to trade below the 154.66 Fibonacci level, a 23.6% retrace of the 160.39 to 152.89 (September) EBS fall. The 14-day momentum reading remains negative since last week, reinforcing the underlying bearish market structure.

Japanese Finance Minister Satsuki Katayama said on Friday that the government will continue to closely communicate with the United States to ensure orderly foreign exchange markets. The risk of further coordinated yen intervention continues to exert downward pressure on USD/JPY.

USD/JPY is at risk of breaking below the recent 152.89 low, which would unmask the major 151.94 level, a 50% retrace of the 139.89 to 163.99 (April to July) rise.

However if there is a break and sustained trading above the 154.66 Fibo, that would signal a shift in the overall bias back to the upside.
Daily Chart


Weekly Chart

(USD/JPY Martin Miller is a Reuters market analyst. The views expressed are his own)

• EUR/USD within 1.15-1.17 range since July. The 200dma 1.1634 caps recovery to 21 Aug high since May at 1.1711

• 100-dma (now 1.1559) underpins since mid August. Hedging of huge 1.1550-1.1650 options add congestion of late

• Rising energy and inflation concerns help underpin USD as markets await Friday's US CPI - key to next weeks Fed policy decision

• FX option implied volatility is high for Friday's CPI and next weeks Fed - recognising that the events could generate volatility

• However, benchmark 1-month expiry vol just above long term lows as continued range trading and low realised vol caps demand

• Risk reversal options show an almost neutral directional premium - consistent with the lack of EUR/USD direction

• That said - broader option prices reflect mild FX unease and risk reversals do show a very small lean toward EUR/USD downside

• Related - FX options wrap - Oil spike sharpens Fed bets as CPI looms large
EUR/USD daily chart (EBS)


EUR/USD 25 delta risk reversals


Benchmark 1-month expiry FXO implied volatility

(Richard Pace is a Reuters market analyst. The views expressed are his own)

• USD/JPY peaked at 154.66 Thursday, it has slipped from 154.61 to 153.97 on Friday

• Fin Min Katayama stressed Japan's close cooperation with US on FX

• Spot continues to trade below 154.78 Fibo, a weekly close below would be bearish

• 154.78 Fibo, a 38.2% retrace of the 139.89 to 163.99 (April to July) EBS rise

• USD/JPY and EUR/JPY tend to move in tandem, log correlations are high above +0.5

Daily Chart


Daily Chart


Correlation Chart

(Martin Miller is a Reuters market analyst. The views expressed are his own)

• AUD/USD holds below 0.72 before US August CPI data at 1230 GMT

• 0.71505-0.71752 is Friday range-to-date (0.71505 is low since Sept 2)

• US CPI forecast up 0.4% MM, 3.4% YY. Core f/c up 0.2% MM, 2.4% YY

• Hotter prints could increase probability of Fed hike next week, lift USD

• 10-year UST yield rose to 4.97% in Asia, highest level since 2023

• Citi expects RBA to raise rates twice before 2027 (next decision Sept 29)

AUDUSD

(Robert Howard is a Reuters market analyst. The views expressed are his own)

• Cable rises to 1.3527 as pound gains on unexpectedly positive UK July GDP

• Up 0.4% vs zero forecast. 1.3527 is intra-day high (1.3499 was Asia low)

• 1.3527 is six pips shy of rally high from Thursday's 1.3493 intra-week low

• UK July GDP beat is boost for hawks advocating BoE rate hike in Q4

• US CPI data due at 1230 GMT; 0.4% MM, 3.4% YY f/c. Core f/c 0.2% MM, 2.4% YY

• Hotter CPI prints could increase risk of Fed rate hike next week, inflate USD

GBPUSD

(Robert Howard is a Reuters market analyst. The views expressed are his own)

• EUR/USD on back foot on broadly strong USD, Asia 1.1607-17 EBS

• Higher crude, inflation concerns cited, despite hawkish ECB view

• EUR/USD off from 1.1654 high Wednesday, to 1.1592 low yesterday

• Back below 200-DMA at 1.1633 but still above 100-DMA down at 1.1558

• Spot also below 1.1614 200-HMA now, 100-HMA above at 1.1625

• Massive E6.7 bln option expiries today between 1.1500-1.1600 supportive

• Total E4.5 bln above between 1.1620-1.1725 to help limit moves up

• EUR/JPY off after early blip up to 179.53 EBS in Asia, off since to 179.15

• Still well above 177.86 low Tuesday after profit-takes by recent JPY longs

• Below 179.43 descending 100-HMA but at top of 178.67-179.26 hourly cloud

• Cloud still descending, break above Ichimoku cloud likely in short run

• EUR/GBP more buoyant after push up to 0.8600 yesterday, NY close 0.8595

• Descending 100-DMA above at 0.8699, support from ascending 100-HMA at 0.8589

• Some option expiries today n 0.8620-30 window just above

• EUR/CHF 0.9440-45 EBS, best since 0.9447 peak on August 18, 2025

• Carry demand seen remaining strong

• Some option expiries today at 0.9400, 0.9450 today, E730 mln at 0.9500

• Related comments , , ,

• And , also , for more click on [FXBUZ]

EUR/USD:


EUR/USD nearby option expiries into next week:


EUR/CHF:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• Shares of Jiangxi Copper drop 11.2% to HK$34.18, lowest level since July 30, leading a slide in Hong Kong-listed mining stocks as metal prices dip

• Stock last down 10%, set for biggest one-day pct decline since June 23; top pct loser in Hang Seng Composite Index on materials stocks , which is down 5.5%

• Copper prices fell on Thursday after Reuters reported White House has yet to decide on refined copper tariffs as officials assess concerns higher prices could raise manufacturing costs

• Gold prices also lingered near one-week low on Friday as expectations of a U.S. rate hike strengthened, with attention turning to U.S. CPI data later in the day

• Shares of miners MMG and CMOC Group drop 9.8% and 10.1%, respectively

• Zijin Mining and China Nonferrous Mining Corp

fall 7.3% and 7.6%

• Shanghai-listed stocks of Zijin Mining , CMOC , and Jiangxi Copper fall 6.7%, 6.9% and 9.3%

(Reporting by Donny Kwok)

• Australian gold stocks decline as much as 4% to their lowest point since August 20

• Shares of Northern Star Resources and Evolution Mining slip about 4% each

• Gold prices extend losses on Friday, a day after robust U.S. inflation data and rising oil prices increased bets for a Federal Reserve rate hike next week [GOL/]

• Gold sub-index down for a fifth consecutive session

• If losses hold, sub-index on track to log weekly loss of nearly 7%, its worst since mid-July

• Sub-index down ~2%, YTD

(Reporting by Sneha Kumar in Bengaluru)

• USD/JPY saw some bounce yesterday, spec short-coming, US PPI firm in places

• Some specs look to have booked some more profits on recent shorts

• Market still seen net short JPY however, Japan exporter offers eyed too

• Upside limited to 155.00 area, just above?

• Eyes now on US CPI out tonight, expectations for YY 3.4%, core 2.4%

• USD/JPY 154.32-61 EBS so far in Asia, 154.66 high o/n, on quiet side today?

• Spot now above 154.11 descending 100-HMA, Ichi tenkan 154.33, kijun 153.97

• Hourly Ichimoku cloud 153.45-66 and likely support for now

• Some massive option expiries in area today - 153.00 $2.9 bln, 154.00$3.1 bln

• And 154.50 $550 mln, 155.00 $1.1 bln, 155.50-75 $546 mln, 156.00-30 $1.2 bln

• JGB-US Treasury rate differentials wider, 2s towards @260, 10s @194 bps

• US CPI data tonight likely to affect US rates again, Fed expectations

• Middle East conflict re-escalation, higher crude fanning inflation fears too

• Related comments , , ,

• And , , , also

• US markets , , ,

• On US PPI/economy , , ,
USD/JPY:


USD/JPY nearby option expiries into next week:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• Australian heavyweight miners down over 4%; mining sub-index set for weekly loss of 3.9%

• Copper prices fall after Reuters reported the White House was yet to decide on refined copper tariffs amid concerns over higher prices and manufacturing cost impact [MET/L]

• World's top miner BHP sheds as much as 4.1% to A$60.79, headed for a 2.5% weekly drop

• Rio Tinto sheds 3% to A$169.3; pure-play copper producer Sandfire Resources plunges as much as 8.3%, biggest intra-day pct loss since June 9

• YTD, AXMM up 14.5%

(Reporting by Nichiket Sunil in Bengaluru)

• AUD/USD on the defensive in Asia after closing 0.85% lower on Thursday

• Hit hard by rising Fed rate hike expectations and sticky U.S. PPI

• Markets price in a 70% probability of Fed hike on Sep 16, up from 60% Thu

• Surging global bond yields undermine AUD; U.S. 10-yr up 12 bps, nears 5%

• U.S. crude closes 6.7% higher as Middle East war escalates, risk mood sours

• U.S. Aug CPI Fri key for Fed; hotter-than-expected reading will weigh on AUD

• Support at 21-DMA at 0.7155, then 0.7117-22; resistance 0.7200-05, 0.7220

• Thursday range 0.7156-0.7223
AUD:

(Krishna Kumar is a Reuters market analyst. The views expressed are his own.)

MUFG Research discusses the UST buyback program.

"The US Treasury did not provide further updated guidance over the size of future operations. There are 6 further buybacks scheduled for the current quarter up to 3^rd November. If the US Treasury continues to hold 9 bond buybacks each quarter, and purchases up to USD6 billion at each operation then it could give a rough ballpark figure for potential annual purchases of just over USD200 billion. It would be a smaller version of the Fed’s ‘Operation Twist’," MUFG notes.

"Admittedly, it is highly uncertain how long the bigger purchases will be sustained and it is possible the size of operations could even be increased further going forward. For comparison, the Treasury’s long-term debt issuance plans for the current quarter are USD231 billion which are similar to the previous quarter," MUFG adds.

The euro dipped to a five-day low after the ECB delivered an expected 25bp rate hike and annual U.S. headline producer prices came in slightly above forecast, before trimming losses as President Christine Lagarde warned energy costs could keep inflation pressures alive.

ECB policymakers foresee more tightening ahead, potentially as early as October, two sources told Reuters.

Separately, ECB broad member and Bundesbank President Joachim Nagel said the rise of euro-skeptic parties could deter investment in Germany.

In U.S. data, producer prices increased at a monthly rate of 0.4% in August, in line with expectations, and core rose 0.2%. The annual headline rate increased at a surprisingly quick pace of 5.4%, while the previous month was revised higher.

Odds of a 25bp Fed hike next week have risen to nearly 70%, though Friday's CPI report will provide a clearer inflation picture.

WTI surged above $100/bbl on news out of the Middle East including a WSJ report that Iran restarted underground missile production in limited quantity and Iran-aligned Houthis advanced down the Red Sea coast.

EUR/USD pared an ECB- and PPI-driven slide to 1.1592, with a long-tailed candle beneath its 200-day moving average of 1.1633 and rising 21-day moving average offering bulls comfort.

GBP/USD eased after U.S. data but remains anchored near recent high by 1.3566 awaiting a slew of central bank policy decisions including the Bank of England next week.

AUD/USD remained pressured after a post-PPI slide to a six-session low of 0.7157 as metal, equity, and CNH weakness reinforced dollar buying.

USD/JPY remained biased higher as surging oil and rising Treasury yields helped to work off oversold conditions, but pair may struggle to move much beyond 155 ahead of the BOJ policy meeting next week.

Treasury yields were up 8 to 12 basis points as the curve flattened. The 2s-10s curve was down about 1 basis point to +39.2bp.

The S&P 500 slipped 0.67%.

WTI oil surged more than 6%, breaching $100/bbl.

Gold slid about 1.9% while copper dropped 5.3% amid White House indecision on tariffs.

Heading toward the close: EUR/USD -0.18%, USD/JPY +0.52%, GBP/USD -0.24%, AUD/USD -0.82%, DXY +0.25%, EUR/JPY +0.33%, GBP/JPY +0.27%, AUD/JPY -0.35%.(Editing by Burton Frierson Robert Fullem is a Reuters market analyst. The views expressed are his own)

• NY opened near 0.7200 after 0.7223 traded in Asia, slide extended in NY

• US dollar, US & global yields rallied sharply after US August PPI report

• Brent oil rally above $107.70, WTI rally above $102.55 aided those rallies

• Drops in gold, silver, copper, equities & USD/CNH gains reinforced USD buying

• AUD/USD fell to a 6-session low, neared the 21-DMA, traded down to 0.7157

• Small bounce saw 0.7170 neared late, AUD/USD was down -0.69% in NY's afternoon

• Monthly doji, falling daily RSI, drop below 10-DMA are concerns for bulls

• US August CPI in focus, an above estimate result could send AUD/USD lower
audusd

(Christopher Romano is a Reuters market analyst. The views expressed are his own)