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Global markets turned their attention firmly toward central-bank policy as traders positioned ahead of Fed Chair Kevin Warsh’s highly anticipated Jackson Hole address. Gold recovered from its recent pullback as softer US Treasury yields provided support, although sticky US inflation continued to keep Fed rate-hike expectations alive. Across currencies, the Australian Dollar remained supported by expectations for further RBA tightening, while the South Korean Won strengthened following a second consecutive Bank of Korea rate increase. The Euro also found support from a more hawkish ECB outlook, while the New Zealand Dollar slipped toward 0.5950 as stronger US inflation reinforced expectations that US rates could remain elevated. With several major central banks leaning toward tighter policy, interest-rate expectations have become the dominant force shaping today’s market direction.
Gold regained positive momentum during Thursday’s Asian session, reversing much of its previous decline toward $4,583. Softer US Treasury yields, partly driven by the Treasury’s bond-buyback strategy, provided support for the non-yielding metal. However, Gold remains below its recent three-month high as traders await Fed Chair Warsh’s Jackson Hole speech for clearer guidance on the future path of US interest rates.
• Jackson Hole: Warsh’s upcoming speech represents the key catalyst for expectations surrounding Fed policy.
• Treasury Yields: Lower US yields are helping Gold recover by reducing the opportunity cost of holding bullion.
• US Inflation: July headline PCE remained at 3.7%, slightly above expectations, keeping Fed tightening risks alive.
• US Dollar: Any renewed Dollar strength could limit Gold’s upside.
• Geopolitical Risks: Uncertainty surrounding the US-Iran situation continues to provide some underlying safe-haven support.
• Trend: Bullish
• Resistance: $4,700
• Support: $4,525 – $4,515
• Forecast: Gold retains a constructive bias while holding above the $4,525-$4,515 support zone. A sustained break through $4,700 could strengthen bullish momentum and expose the next Fibonacci resistance around $4,861. However, a hawkish message from Warsh could lift yields and the Dollar, triggering another correction.
• Market Sentiment: Cautiously bullish ahead of Jackson Hole.
• Catalysts: Warsh’s speech, Fed rate expectations, Treasury yields, US Dollar direction and geopolitical developments.
The South Korean Won strengthened against the US Dollar, with USD/KRW falling toward 1,380, near an 11-month low. The Bank of Korea raised its policy rate by 25 basis points to 3.00%, marking another consecutive hike as policymakers continued their effort to bring inflation back toward target.
• BoK Rate Hike: Higher interest rates are increasing the Won’s relative attractiveness.
• Inflation: South Korean inflation eased to 2.8% in July but remains above the BoK’s 2% target.
• Growth Outlook: The BoK upgraded its 2026 growth forecast to 3.3% from 2.6%.
• Investment Flows: Strong interest in South Korea’s semiconductor and AI sectors has supported KRW demand.
• US Dollar: Sticky US inflation provides some support for USD and could limit further KRW appreciation.
• Trend: Bearish USD/KRW
• Resistance: 1,400
• Support: 1,370
• Forecast: USD/KRW could remain under downward pressure as higher Korean interest rates and strong capital flows support the Won. However, the currency’s significant year-to-date appreciation means the risk of short-term consolidation is increasing.
• Market Sentiment: Bullish for KRW.
• Catalysts: BoK policy expectations, Korean inflation, semiconductor investment flows, US Dollar direction and Jackson Hole.
The New Zealand Dollar slipped toward 0.5950 as hotter US headline PCE inflation strengthened expectations that the Federal Reserve could raise interest rates again. Headline PCE remained at 3.7% year-over-year in July, slightly above the 3.6% forecast, while core inflation held at 3.3%.
• US Inflation: Persistent price pressures are supporting expectations for tighter Fed policy.
• Fed Expectations: Markets continue to price some probability of another rate increase, supporting USD.
• Jackson Hole: Warsh’s comments could significantly reshape the outlook for NZD/USD.
• RBNZ Policy: Expectations for another RBNZ hike provide underlying support for NZD.
• Risk Sentiment: As a risk-sensitive currency, NZD remains vulnerable to more defensive global positioning.
• Trend: Neutral to Bullish
• Resistance: 0.5985
• Support: 0.5905
• Forecast: Despite the current pullback, NZD/USD retains a constructive technical structure above its 100-day SMA. A recovery above 0.5985 could bring 0.6000 into focus, while a break below 0.5905 would increase the risk of a deeper correction toward 0.5845.
• Market Sentiment: Cautious in the near term.
• Catalysts: Jackson Hole, Fed expectations, RBNZ policy, US Treasury yields and global risk sentiment.
The Australian Dollar remained one of the stronger major currencies as hotter domestic inflation reinforced expectations that the Reserve Bank of Australia could tighten policy further. AUD/USD has recently traded around 0.7170-0.7180, with Australian inflation providing enough support to offset renewed hawkish expectations surrounding the Fed.
• Australian Inflation: Stronger-than-expected CPI has increased expectations for another RBA hike.
• RBA Policy: Markets are increasingly considering additional tightening as inflation remains persistent.
• US Inflation: Sticky PCE data supports the Dollar and limits the Aussie’s upside.
• Australian Economy: Softer domestic investment and labor indicators could complicate the RBA outlook.
• Jackson Hole: Warsh’s message could determine whether AUD/USD can maintain its recent momentum.
• Trend: Bullish
• Resistance: 0.7200
• Support: 0.7085
• Forecast: AUD/USD could challenge the psychological 0.7200 level if RBA tightening expectations remain elevated. A hawkish Jackson Hole message from the Fed could slow the advance, while continued strength above roughly 0.7085 would preserve the broader constructive outlook.
• Market Sentiment: Moderately bullish.
• Catalysts: RBA rate expectations, Australian economic data, Fed policy signals, Jackson Hole and US Dollar direction.
The Euro held above 1.1650 as increasingly hawkish expectations surrounding the European Central Bank provided support. Markets are considering the possibility of further ECB tightening as persistent geopolitical pressures and a stronger-than-expected Eurozone economy create upside risks to inflation.
• ECB Expectations: Markets increasingly expect European interest rates to remain restrictive or move higher.
• Eurozone Inflation: Persistent inflation risks strengthen the argument for additional tightening.
• Economic Resilience: Stronger-than-expected Eurozone activity is giving the ECB greater room to maintain a hawkish stance.
• Fed Policy: The relative ECB-Fed outlook remains crucial for EUR/USD.
• Jackson Hole: Warsh’s speech could create substantial Dollar volatility and determine the pair’s next move.
• Trend: Neutral to Bullish
• Resistance: 1.1700
• Support: 1.1600
• Forecast: EUR/USD could remain supported while markets maintain expectations for tighter ECB policy. A sustained break above 1.1700 would strengthen the bullish outlook, while a hawkish shift from the Fed could push the pair back toward 1.1600.
• Market Sentiment: Cautiously bullish.
• Catalysts: ECB policy expectations, ECB Meeting Accounts, Eurozone inflation, Jackson Hole, Fed expectations and US Treasury yields.
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