• AUD/USD +0.5% from Thur post-FOMC 0.7075 low, eyes shifting to RBA outlook

• RBA officials (including Bullock) before parliamentary committee on Fri

• Futures pricing implies 85.0% chance of RBA policy rate hike on Sep 29

• Saudi Arabia & Houthis exchange fire as Middle East war continues to spread

• U.S. President Trump to meet with Chinese leader Xi Jinping next week

• AUD hourly Bollinger bands narrowing, DXY -0.1% from recent highs

• 0.7078 100-DMA may provide short-term support, downside open to 0.6920 below

• Overnight range 0.71065-275 support 0.7078 0.6920, resistance 0.72825 0.7661
AUD Hourly Bollinger Study & DXY Daily 55/100/200-DMA


AUD Daily 21/55/100-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

JP Morgan likes short USD/JPY exposure into September BoJ meeting.

"Fed was a small hawk but did little to change view in USDJPY; much more important will be the BoJ tonight and the local flow picture. There was evidence enough that Ueda was at least trying to be more hawkish so now that he has had more time to prepare for this meeting - given all the hype - it will be interesting to see how he delivers the presser, for me anything that suggests we are good to keep the newly priced quarterly cadence is positive JPY," JPM notes.

"Given how well priced the meeting is, the more likely surprise here is that they go 50bp rather than unchanged. JPY longs continue to get cut at pace by DHF who are almost back to flat on the month (when USDJPY was 159) meanwhile more evidence of modest local RM demand in our franchise overnight. In other news Takaichi’s cabinet reshuffle was pretty muted and contained no market- relevant victims. Stay short USDJPY," JPM adds.

• NY opened near 1.1475 after 1.1456 traded overnight, rally then extended

• Downward moves in USD, US yields , oil helped fuel the rally

• Gold, silver and equity gains added fuel as they helped drive USD selling

• USD/CNH's drop to a fresh 3-3/4 year low contributed buoyancy to EUR/USD

• EUR/USD hit 1.1498 then dipped as USD & oil firmed in NY's afternoon

• The pair traded up +0.12% late which had daily techs warn EUR/USD bears

• Daily RSI diverged & the pair couldn't hold below the 61.8% Fib of 1.1325-1.1711
eurusd

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

• NY opened near 0.7110 after 0.7084 traded overnight, rally extended in early NY

• USD, US yield , USD/CNH drops helped lift AUD/USD to 0.7128

• Rallies in gold, silver, copper and stocks also contributed to buoy AUD/USD

• Yields, USD firmed in NY's afternoon, AUD/USD neared 0.7115 late, was up +0.37%

• Falling monthly RSI. pair's hold below the 10- & 21-DMA are concerns for bulls

• September's monthly inverted hammer candle adds to those concerns
audusd

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

MUFG Research previews the September BoJ policy decision.

"Early tomorrow, ahead of the London open, the BoJ will announce its monetary policy decision with market pricing signalling a near 100% expectations of a 25bp rate hike to 1.25%. We certainly expect the general message from the communications to signal a clear plan to raise rates further which will go some way to endorsing the OIS rate curve priced for further hikes. It would also be consistent with the BoJ aligning itself to the coordinated efforts between Japan and the US to strengthen the yen," MUFG notes.

"That said, there is a notable risk that Governor Ueda’s comments could fall short of what markets are expecting given 90bps of hikes are priced over the next 12mths...The US-JP 2-yr spread is 30bps higher so any disappointment in Ueda matching market pricing could see USD/JPY bounce more notably higher. That said, the retracement in USD/JPY today is notable and suggests from an FX perspective the expected faster pace of BoJ tightening is becoming a more important influence on FX direction," MUFG adds

(Updates)

• Shares of gold miners gain, tracking rise in bullion prices [GOL/]

• Spot gold up 2.2% at $4,356.04 per ounce, rebounding from a near six-week low hit during previous session, supported by easing oil prices and a lower U.S. dollar, while investors assessed the latest Federal Reserve rate hike and policy cues

• Top miners Newmont and Barrick Gold each up ~3%

• U.S.-listed shares of South African miners Gold Fields

rise 3.4%, Harmony Gold jump 3.9%, AngloGold Ashanti gain 2.7% and Sibanye-Stillwater up 4.6%

• Canadian miners Agnico Eagle Mines rises 3.4% and Kinross Gold adds 3%

(Reporting by Pooja Menon in Bengaluru)

Bank of America Global Research reviews the September FOMC decision.

'The Fed sent a strongly hawkish message at its September meeting. The statement removed the language around inflation being partly due to supply shocks. I.e., no more excuses. The SEP showed stronger growth, higher inflation and a lower u-rate across the forecast horizon, despite two hikes this year. And Chair Warsh made it clear in his presser that the job isn't done. He repeatedly emphasized the strength of the economy and noted that the Fed's job is to prevent commodity shocks from broadening out. We remain comfortable with our call for two more 25bp hikes this year, in October and December," BofA notes.

"Overall, the DXY still remains about 1% below levels just ahead of June FOMC.  September's FOMC, along with the recent trend of solid US data better opens the upper side of the dollar's distribution and should quiet calls for a return to the "debasement trade". We generally see the dollar ending the year at/around current levels vs. most G10 currencies," BofA adds.

Sterling may struggle to extend its recovery, having bounced from a session low near 1.3350 after the widely expected 6-3 BoE MPC vote to hold bank rate steady, the bid emerging as traders looking further out the short-term curve infer the U.S. and UK will travel similar monetary policy paths into Q4 and 2027.

Though cable appears to be stabilizing, headwinds persist. Near-term, the UK autumn budget due in October is a threat, with PM Andy Burnham needing to navigate a tenuous fiscal position to placate bond vigilantes. To that end, the BoE said long-dated gilts in its Asset Purchase Facility will be replaced as they mature and APF gilt sales paused until April 2027 — ostensibly to soothe fiscal nerves as UK 10- and 30-year yields remain elevated.

Today's hold carried hawkish overtones, the BoE flagging the ongoing Middle East conflict and its inflationary drag and forecasting CPI above 4% in early 2027 — paving the way for hikes. LSEG's IRPR implies roughly 36bp of BoE tightening by the December 2026 meeting and up to 87bp by December 2027, a trajectory close to the Fed's, which may stall further sterling declines.

The geopolitical tensions in the Middle East are expected to impact most developed economies similarly, keeping oil prices and inflation elevated. For the UK, fiscal risk now takes the spotlight: if the budget disappoints and UK yields outrun U.S. Treasuries, GBP/USD likely resumes lower, with the July 28 low at 1.3274 and June 24 low at 1.3140 as downside targets.
GBP$ Chart:

(Paul Spirgel is a Reuters market analyst. The views expressed are his own)

Goldman Sachs Research updates its Fed rates call after yesterday's September FOMC meeting,

"We now expect the FOMC to deliver a second 25bp hike in October, a change from our previous expectation that September would be the only hike. We think October is the most likely time for the next move because it is most natural to deliver hikes that the FOMC presented today as supporting “a timelier return" to the 2% target at consecutive meetings," GS notes.

"We have kept our forecast for the terminal rate unchanged at 3.25-3.5% by adding to the September and December 2027 rate cuts we already expected at third 25bp cut in March 2028. Additional hikes are possible but not our base case," GS adds.

Credit Agricole CIB Research reviews the September FOMC decision.

"The Fed delivered an expected hike at the September FOMC, raising the target range by 25bp to 3.75%-4.00% for its first hike since July 2023. On top of the hike itself, we would characterize the other aspects of the meeting as having a hawkish lean, helping to ease some credibility concerns that had been percolating in the background, with long-end rates relatively contained, if not slightly lower, after the decision," CACIB notes.

"Taking everything together, we think it is unlikely that September’s hike will be a one-and-done, with the Fed likely to deliver additional tightening in the meetings to come. For now, we would lean towards a total of 75bp to remove the insurance cuts delivered late last year," CACIB adds.

• 0.7084-0.7121 traded overnight, AUD/USD opened NY near 0.7110, up +0.32%

• Better risk sentiment buoyed AUD/USD with help from USD, US yield drops

• Rallies in gold, silver, copper & equities along with USD/CNH drop added buoyancy

• AUD/UD rallied back above the 38.2% Fib of 0.6867-0.7238 & daily RSI turned up

• Monthly RSI, monthly inverted hammer candle are concerns for AUD/USD bulls

• US jobless claims, Sep. Philly Fed business index are data risks in NY's morning
audusd

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

• U.S.-listed shares of gold miners gain premarket, tracking rise in bullion prices [GOL/]

• Spot gold up 1.1% at $4,308.39 per ounce after hitting a near-six-week low on Wednesday

• Gold prices climb as a softer U.S. dollar and easing oil prices lend support, while investors assessed the Federal Reserve's latest rate hike and prospects for further policy tightening

• Top miners Newmont , Barrick Gold , up 1.6% and 1.8%, respectively

• South African miners Gold Fields rises 3.4%, Harmony Gold jumps 3.6%, AngloGold Ashanti gains 2.4% and Sibanye-Stillwater up 1.1%

• Canadian miners Agnico Eagle Mines , rises 2.7% and Kinross Gold , adds ~2%

(Reporting by Pooja Menon in Bengaluru)

• USD/CHF broke out to fresh highs after the Fed's hawkish policy decision

• Fed hiked 25bps. Vote was unanimous. Dots pencil at least one more hike this year

• Spot clears the 100-week MA for the first time since March 2025

• A sustained daily close above this level opens path to 0.8350-75 zone

• Former resistance now flips to support at 0.8173-0.8200

• Failed follow-through above 100-week MA would trap longs, raising risk of a pullback
USDCHF weekly chart

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

FX options are sending a volatility warning signal ahead of Friday's Bank of Japan decision, with volatility protection costs reaching their highest levels this year.

As the much-anticipated BoJ policy announcement approaches, implied volatility in USD/JPY is drawing significant attention. The measure, which gauges expectations for future volatility, can offer clues about potential foreign exchange reactions to major event risks such as central bank policy decisions.

Ahead of Friday's BoJ announcement, implied volatility trends have diverged across major currency pairs. While overnight expiry implied volatility rose broadly before the US Federal Reserve's policy announcement on Wednesday, it has since retreated. USD/JPY is the exception, with overnight expiry implied volatility rising further, reflecting heightened anticipation and uncertainty surrounding the BoJ decision.

Excluding the broader surge in FX options implied volatility during JPY intervention episodes in late July and early September, overnight USD/JPY implied volatility is at its highest level since the Fed's January meeting and the highest for any BoJ meeting in the past year.

Overnight USD/JPY implied volatility currently stands at 21.0, implying a premium, or break-even, of 136 JPY pips in either direction for a vanilla straddle. That compares with implied volatility of around 16.0, or 100 JPY pips, ahead of the recent Fed decision, highlighting a much higher perceived risk for sharp JPY volatility following the BoJ announcement.

The BoJ is expected to raise interest rates to a 31-year high of 1.25% on Friday. However, analysts caution that the widely anticipated move may not provide sufficient support for the JPY unless Governor Kazuo Ueda adopts a hawkish tone on future rate increases.

Intervention remains a risk after USD/JPY edged up to 156.42 following the Fed decision. Japan has since reaffirmed its commitment to orderly JPY moves through close communication with the US, after being questioned about the Fed's hike, which helped USD/JPY recover more of its early September decline from 160.00 to 152.89.

Elevated USD/JPY implied volatility suggests markets are bracing for a significant reaction to news from the BoJ. While a rate hike is widely expected, the key factor for traders may be the tone of Ueda's guidance on the policy path ahead.
Overnight expiry FXO implied volatility

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

• AUD/USD hits 0.7121 after pushing its recovery envelope from 0.7075

• 0.7075 was four-week low, after USD strengthened on Fed's hawkish hike

• That four-week low approximates to the 100-day moving average

• There is a big 0.7120 option expiry for the 10am ET New York cut

• IMF says Australia may need further interest rate rises to tame inflation

• Markets currently see 87% chance of RBA rate hike on Sept 29

AUDUSD

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

• Cable hit 1.3370 in Asia, its lowest level since July 30

• Drop to 1.3370 spurred by dollar strength on Fed's hawkish hike

• Wednesday's pre-Fed low approximated to the 100DMA; 1.3442

• 1.3400 (former support point) is now a resistance level

• Goldman Sachs expects Fed to raise rates again in October

• BoE is expected to keep its policy rate unchanged at 1100 GMT

GBPUSD

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

• Shares of Pilbara Gold Ltd gain as much as 3.8% to A$0.55, their highest level since September 1

• Gold explorer delivers strong first drill results from its Roe Hills Gold Project in Kalgoorlie, Western Australia

• Around 579,000 shares change hands, nearly 1.8x 30-day average

• Stock up 1.8% YTD

(Reporting by Rudrannsh Mehra in Bengaluru)

• GBP/USD extends decline in Asia after closing 0.7% lower on Wednesday

• Undermined by Fed's 25bps hawkish hike, Warsh's concern on inflation

• 16 of 18 policymakers see at least one additional 25 bps increase this year

• Markets price in 50% chance of Oct hike; Dec move fully priced

• 63bps of Fed hikes priced by Mar; Fed-BoE policy diverge in near-term

• BoE rate decision Thu, hold expected; repeat of July's 6-3 vote likely

• 1.3368, 76.4% Fibo of July-Aug rally threatened ; break opens 1.3345, 1.3300

• Resistance 1.3420, 1.3445-50; Wed range 1.33745-1.3493, Asia 1.3370, 1.3386
GBP:

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

• EUR/USD heavy in Asia, 1.1456-73 EBS, still feeling effects of hawkish Fed

• FOMC voted to hike 25 bps as expected, more hikes look to be in store

• EUR/USD now below ascending, widening 1.1485-1.1502 daily Ichimoku cloud

• First time below this cloud since July 31, low then 1.1455, support

• Massive option expiries today to again help contain spot action

• 1.1400-20 E4 bln, 1.1430 E1.6 bln, 1.1435-50 E2.1 bln, 1.1460-95 E3.3 bln

• The 1.1500 strike along to see E4.6 bln in expiries today

• EUR/CHF in contrast still very much bid, 0.9462-72 EBS, at recent highs

• Carry demand continuing? Sideways for now but bias still up?

• EUR/JPY in stasis post-Fed, pre-BOJ, Asia 178.92-97 EBS, in recent range

• Below 179.30 descending 200-MA, above 178.72 100-HMA, 178.49-67 cloud

• EUR/GBP 0.8566-70 post-Fed, pre-BoE, at top of 0.8538-71 daily Ichi cloud

• In 0.8564-77 hourly cloud, 100-HMA 0.8574 in cloud, 200-HMA 0.8579 above

• Some option expiries today in the 0.8565-75 window

• Related comments , , , also
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)

• AUD/USD +0.05% Thur as dust begins to settle from overnight Fed action

• AUD break below 0.7078 100-DMA may accelerate selloff toward 0.6920 support

• Futures pricing implies near 50/50 chance of another 25 bps FFR hike in Oct

• Saudi Arabia offers to ship oil via Oman, calms supply fears, WTI -0.3% Thur

• RBA officials (including Bullock) before parliamentary committee on Fri

• Range Asia 0.7084-97 support 0.7078 0.6920, resistance 0.72825 0.7661
AUD Daily 21/100/200-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• USD bid across the board on hawkish Fed hike, talk of another in December

• USD/JPY to 156.42 EBS before steadying, talk 156.00 option barriers KO-ed

• Spot off some since, Asia so far 156.30 to 155.94, exporter sales already?

• More Japanese exporter sales eyed into Tokyo fix, looking to lock in 155+

• Most Japanese exporter budget assumptions for fiscal year 155+

• Technically, USD/JPY rally stopped just shy of daily Ichi kijun at 156.64

• Hourly tenkan and kijun now below at 155.66, cloud 154.40-155.02 well below

• Vanilla option expiries today include massive $4.2 bln between 155.40-95

• Also 156.00 $2.7 bln, 156.15-75 total $4.4 bln, lots of gamma plays eyed

• Seems widening of JGB-US Treasury rate differentials peaked Tuesday

• Still wide however with 2s @280 bps, 10s @199 bps at NY close yesterday

• Related comments , , ,

• And , , ,

• Also , on the Fed , ,

• US markets , , ,
USD/JPY:


JGB-US Treasury 2-year interest rate differential:

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

• NZD/USD +0.3% Thur as Q2 GDP beat expectations, but still 0.7% off Wed high

• Fed hiked as expected, decision unanimous, flags further tightening to come

• NZ Q2 production-based GDP +0.2% q/q (poll +0.1%), +2.6% y/y (poll +2.2%)

• NZD cumulative loss 4.3% in 4-weeks, now targeting Jun 26 0.5627 ytd low

• Investors left pondering further Fed hikes after Wed's unanimous decision

• DXY +0.7%, and 2Y UST yields trading close to two-year highs

• RBNZ Assistant Governor Angus McGregor due to speak Thur evening

• Range NZ 0.5705-29, support 0. 0.5627, resistance 0.5995 0.6012
DXY Daily 55/100/200-DMA


NZD Daily 21/55/100-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• AUD/USD -0.8% from Wed 0.7141 high after FOMC delivers hawkish rate hike

• 1st Fed hike in over 3-years, a unanimous decision, FFR target 3.75-4.00%

• Trump says U.S. interest rates should be lower than 1% in garbled messaging

• AUD break below 0.7100 an ominous sign, puts 18-month long uptrend at risk

• Some support near 0.7078 100-DMA & 0.7067 55-DMA, but downside open below

• Broad USD index up 0.7%, 2Y UST yields 4.73% near two-year high

• RBA officials (including Bullock) before parliamentary committee on Fri

• Overnight range 0.7075-0.7141 support 0.6920, resistance 0.72825 0.7661
AUD Weekly 52-WMA


AUD 21/55/100-DMA


DXY Daily 55/100/200-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

Bank of America Global Research previews the BoE September rate decision, due on Thursday.

"We expect the MPC to vote 6-3 for a hold with Pill, Greene and Mann voting for a hike as in July. There is a fairly small risk that Lombardelli votes for a hike. In July she said that her vote for a hold was not a close call and policy would need to be adjusted only if there were to be evidence of risks of significant second-round effects, including from persistently higher energy prices. So far there is limited evidence of second-round effects, but she may conclude that higher energy prices can increase those risks, causing her to vote for a hike. But it's not our base case and we see this as a fairly small risk," BofA notes.

"We expect the guidance that "The Committee stands ready to act as necessary to ensure that CPI inflation remains on track to meet the 2% target in the medium term" to remain unchanged. We expect the tone to shift more hawkish vs. July, highlighting greater upside inflation risks than before and the door kept open to a hike," BofA adds.