Technical analysis

OCBC’s Christopher Wong notes that Bank Negara Malaysia (BNM) kept the OPR at 2.75% and struck a slightly firmer tone, with growth expected to stay resilient into 2027. The economist still projects an OPR normalisation to 3.00% in January 2027.

The Mexican Peso appreciates against the US Dollar, testing two-year highs near 16.85 as the USD/MXN sets aside a strong US Nonfarm Payrolls report, which was ignored by the Peso’s bears.

Commerzbank highlights that Bank Negara Malaysia kept the OPR at 2.75% but shifted to a more hawkish bias, removing language that policy is "appropriate" and signalling vigilance on cost pressures.

The USD/CHF registers modest gains of over 0.30% as the Greenback is boosted by a solid US Nonfarm Payrolls report, pushing the pair above the 50-day Simple Moving Average (SMA) to reach a daily high of 0.8126. At the time of writing, trades at 0.8098.

OCBC’s Christopher Wong notes that USD/IDR has pulled back as a softer Dollar and lower UST yields support the Indonesian Rupiah. He highlights Bank Indonesia Governor Destry Damayanti’s emphasis on a stability-first approach, prioritizing Rupiah and macro stability while still supporting growth.

Commerzbank says China’s August Services PMI rebound highlights some resilience in private-sector activity, but weak retail sales, soft inflation and higher unemployment still point to fragile domestic demand.

The Pound Sterling retreats some 0.09% against the US Dollar as the latest US inflation report reaffirmed what Fed Chair Warsh said that the labour market is “consistent with full employment.” GBP/USD trades near Friday’s opening price of 1.3512.

DBS Group Research economist Chua Han Teng notes that Bank Negara Malaysia (BNM) held the Overnight Policy Rate at 2.75% while dropping language that the current level is appropriate. DBS expects rates to remain unchanged through 2026 but sees risks tilted towards a one-off policy normalisation.

OCBC’s Christopher Wong notes that strong foreign-currency inflows linked to the RBI’s special measures have bolstered the Indian Rupee (INR) and strengthened the central bank’s FX buffer.

Nordea expects Eurozone inflation dynamics to stay persistent, with headline inflation projected above the ECB’s target at least until spring 2027.

Cleveland Fed President Beth Hammack wrote that the current monetary policy stance in the Fed is not restrictive, emphasizing that inflation is too high, at an article on LinkedIn. She added that local contact views indicate that “now is the time for the Fed to hike to control inflation.”

ING’s Muhammet Mercan notes the Central Bank of the Republic of Türkiye (CBRT) has normalised liquidity via weekly repo auctions, bringing effective funding costs down to the 37% policy rate.

AUD/USD resumes its advance on Friday after a brief bout of weakness following a stronger-than-expected United States (US) employment report.

Gold (XAU/USD) price retreats by about 0.80% on Friday, after registering losses of over 2% following the release of an upbeat US jobs report.

The Dow Jones Industrial Average trades just short of 53,400, roughly 325 points or 0.6% lower on Friday, after August Nonfarm Payrolls (NFP) printed 162K against a 56K forecast at 12:30 GMT and pushed the probability of a September hike above 60%.

Silver (XAG/USD) trades around $66.20 at the time of writing on Friday, down 1.18% on the day, after recovering part of its sharp post-Nonfarm Payrolls (NFP) decline.

EUR/USD sees sharp two-way price swings on Friday after a stronger-than-expected United States (US) employment report triggers fresh volatility. The pair initially fell to an intraday low of 1.1585 before recovering as the US Dollar (USD) struggled to sustain its gains.

Commerzbank’s Commodity Research team, led by Barbara Lambrecht, notes that uncertainty over crude flows through the Strait of Hormuz and conflicting transit data are clouding the outlook for Brent.

Rabobank's Senior Macro Strategist Bas van Geffen expects the European Central Bank (ECB) to hike its deposit rate by 25bp to 2.50% next week and then hold at that level for an extended period.

The United States Dollar Index (DXY) rises some 0.17% following a stellar Nonfarm Payrolls report, with the economy creating nearly three times as many jobs as expected by most economists, as revealed by the Bureau of Labour Statistics (BLS).

ING’s Peter Virovacz expects Hungarian industrial production to rebound in July, helping avoid a third-quarter GDP decline despite August headwinds from heatwave-related energy issues.

USD/CHF trades higher on Friday as stronger-than-expected United States (US) Nonfarm Payrolls (NFP) data trigger fresh volatility. The pair jumped to 0.8126 following the release before giving back part of its advance. At the time of writing, USD/CHF trades around 0.8102, up nearly 0.34% on the day.

Royal Bank of Canada (RBC) economist Claire Fan notes Canada’s labour market lost 42,000 jobs in August, partly reversing earlier gains and leaving modest year-to-date job growth. She emphasizes structural factors like demographics and weaker immigration as key drags.

Commerzbank’s Dr. Christoph Balz notes that the U.S. labor market surprised to the upside in August, with Nonfarm Payrolls and private sector jobs both rising strongly while the unemployment rate held at 4.1%. Wage growth continued to slow.

Nomura’s Global Markets Research team, led by Andrzej Szczepaniak, George Buckley and Josie Anderson, expects the ECB to raise the depo rate by 25bp to 2.50% at the 10 September meeting and then pause.

In a post on Truth Social, United States (US) President Donald Trump welcomed the creation of 162K jobs in August, a figure he described as significantly above expectations.

TD Securities strategists note that Canada’s softer August labour report, including weaker employment momentum and slower wage growth, is unlikely to materially change the Bank of Canada’s (BoC) assessment of the labour market.

USD/CAD accelerates sharply higher on Friday, trading around 1.3850 at the time of writing, up 0.39% on the day.

ING’s James Knightley notes that stronger-than-expected US August jobs data, with 162,000 new positions and upward revisions, has increased the perceived likelihood of a September Federal Reserve rate hike.

GBP/USD recovers part of its initial drop on Friday after stronger-than-expected United States (US) employment data briefly lifts the US Dollar (USD). The pair fell to an intraday low of 1.3482 immediately after the release before rebounding. At the time of writing, GBP/USD trades around 1.3512.

ING’s Warren Patterson and Ewa Manthey highlight that central banks, led by China and Poland, continued net Gold purchases in July, supporting structural demand despite a slower pace than last year.

EUR/USD comes under selling pressure on Friday as the US Dollar (USD) strengthens following the release of the upbeat United States (US) employment report. At the time of writing, the pair trades around 1.1605, down roughly 0.18% on the day, after retreating from an intraday high of 1.1633.

USD/JPY trades around 155.85 on Friday at the time of writing, virtually unchanged on the day.

Societe Generale reports that USD/MXN has moved back below 17.00 as Mexican officials engage with US counterparts on trade issues following a widening US-Canada rift. The bank highlights a sharp drop in Mexico’s car imports from China after tariff adjustments aimed at protecting local jobs.

EUR/GBP trades on the back foot on Friday, snapping a four-day winning streak that pushed the cross above 0.8600 to its highest level since July 1. Softer-than-expected Eurozone Retail Sales data weighs modestly on the Euro (EUR).

DBS Group Research expects the European Central Bank (ECB) to raise the deposit facility rate to 2.50%, citing a resilient inflation-growth mix in the Eurozone. The report notes headline inflation has moved further above target, while core pressures remain contained for now.

West Texas Intermediate (WTI) US Oil declines 1.21% on Friday and trades around $88.55 per barrel at the time of writing.

Commerzbank’s Dr. Christoph Balz expects the Federal Reserve to keep rates unchanged, but highlights a significant risk of another 25 bps hike.

MUFG’s Michael Wan highlights a sharp strengthening in the Japanese Yen, with USD/JPY dropping from 160 to around 155.30 as the Dollar broadly weakened and Asian FX gained.

The US Dollar (USD) is marginally up on Friday ahead of the United States (US) Nonfarm Payrolls (NFP) data for August, which will be published at 12:30 GMT.

Silver (XAG/USD) consolidates with marginal losses on Friday following back-to-back daily gains, as traders avoid taking large positions ahead of the US Nonfarm Payrolls (NFP) report.

The Canadian Dollar (CAD) holds minor losses against the US Dollar (USD) on Friday, as the USD/CAD pair trades just above 1.3800 after bouncing from two-week lows at 1.3765.

ING’s Chris Turner notes that dovish comments from Federal Reserve official Christopher Waller have pushed US yields and the Dollar lower, while supporting equities and high-yielding FX.

The Australian Dollar (AUD) trades marginally higher at around 0.7203 against the US Dollar (USD) during the European trading session on Friday. The Aussie pair is broadly firm as the US Dollar remains under pressure, with traders reassessing Federal Reserve (Fed) interest rate expectations.

Gold (XAU/USD) moves quietly on Friday after two straight days of gains, as traders appear reluctant to take fresh positions ahead of the US Nonfarm Payrolls (NFP) report at 12:30 GMT.

The British Pound (GBP) has retreated from session highs just below 1.3550 against the US Dollar (USD) during the London trading session, returning to levels near 1.3520 and turning negative on the daily chart.

AUD/JPY advances on Friday and trades around 112.65 at the time of writing, up 0.39% on the day.

Bank of England (BoE) Governor Andrew Bailey said on Friday that monetary policymakers have some discretion over how quickly they bring inflation back to target, while stressing that returning inflation to the target remains imperative.

Commerzbank analysts Norman Liebke and Michael Pfister report that the Bank of Canada kept its policy rate at 2.25% but adopted a more hawkish tone as inflation risks rise from higher energy prices and trade tensions with the US.

Gold (XAU/USD) trades flat at the $4,470 area on Friday, as the previous two days’ rebound from $4,280 failed to find acceptance above the $4,500 psychological area.

OCBC’s Christopher Wong notes that the Dollar Index (DXY) has eased alongside lower UST yields after Fed Governor Waller signalled a preference to keep rates unchanged in September if disinflation persists.

Silver prices (XAG/USD) fell on Friday, according to FXStreet data. Silver trades at $66.67 per troy ounce, down 0.46% from the $66.98 it cost on Thursday.

Societe Generale strategists note that the Indian Rupee (INR) rallied to its strongest level against the US Dollar (USD) since late June, helped by active RBI intervention and sizeable FX mobilisation flows.

West Texas Intermediate (WTI), futures on NYMEX, drops to near $88.65 while struggling to move above the $90 mark during the European trading session on Friday.

MUFG’s Lee Hardman notes that the Japanese Yen (JPY) has strengthened sharply, pushing USD/JPY back towards the 155.00 support level that has held several times this year.

Rabobank’s Senior FX Strategist Jane Foley highlights that the British Pound (GBP) is vulnerable as global bond market pressure focuses on high-debt countries facing elections or budget talks.

Eurozone Retail Sales contracted at a 0.6% pace Month-on-Month (MoM) in June, while they were anticipated to rise by 0.3%. June's data revised higher to 0.2% from -0.3%.

ING’s Chris Turner writes that EUR/USD is grinding higher as markets reverse the earlier sell-off triggered by Kevin Warsh’s speech, with the pair moving back toward 1.1650. A softer Dollar backdrop versus EMFX and pro-growth G10 currencies supports the Euro.

The GBP/USD pair attracts some buyers for the second straight day, though it lacks follow-through and remains capped near mid-1.3500s through the early European session on Friday.

The United States (US) Bureau of Labor Statistics (BLS) is set to release the Nonfarm Payrolls (NFP) data for August on Friday at 12:30 GMT. 

Commerzbank’s Tatha Ghose highlights a sharp Forint rally after a Bloomberg report suggested the National Bank of Hungary may pause rate cuts on 22 September and consider lowering its inflation target. While unconfirmed, this aligns with the bank’s less dovish August message.

The Euro (EUR) posts moderate gains against the Japanese Yen (JPY) on Friday, with the EUR/JPY pair trimming some losses after a whopping 500-pip sell-off in the previous two days. Euro bulls, however, remain capped below 182.00, after bouncing up from one-month lows at 180.53 on Thursday.

Geoff Yu at BNY highlights that USD/JPY around 160 has become a credible deterrent level for FX participants, even without clear evidence of official intervention.

Deutsche Bank reports that US equities, led by the S&P 500, rallied as dovish remarks from Fed Governor Waller offset stronger US data. The S&P 500 logged its best day in nearly a month and moved close to record highs, supported by gains in the Magnificent 7 and easing energy prices.

Dow Jones futures inch lower by 0.06% to trade near 53,710 during European hours on Friday. Meanwhile, S&P 500 futures advance by 0.06% to trade near 7,760, while Nasdaq 100 futures rise by 0.38% to trade around 29,640.

The GBP/JPY cross stages a goodish intraday recovery from the vicinity of the 210.00 psychological mark, though it remains on track to register heavy weekly losses.

The Japanese Yen (JPY) is trimming some gains against the US Dollar (USD) on Friday, but still on track to its strongest weekly performance since July’s US-Japan coordinated intervention.

OCBC’s Christopher Wong reports Gold rebounded over 2% towards 4510 as Waller’s comments led markets to pare September Fed hike expectations, lowering UST yields and the Dollar.

Silver price (XAG/USD) retreats to near $66.30 in the European trading session on Friday after posting a fresh five-day high near $68.00. The white metal comes under pressure ahead of the United States (US) Nonfarm Payrolls (NFP) data for August, which will be published at 12:30 GMT.

EUR/CAD declines after opening at a bullish gap, remaining steady at 1.6040 during the early European hours on Friday.