Rising gilt yields are not saving the British Pound
Sterling has spent Wednesday handing back the last of its August rally, with GBP/USD trading just under 1.3500 after a session low a shade beneath 1.3475.
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Sterling has spent Wednesday handing back the last of its August rally, with GBP/USD trading just under 1.3500 after a session low a shade beneath 1.3475.

The USD/CHF pair advances some 0.13% on Wednesday as the Greenback holds within familiar levels, after depreciating versus the Japanese Yen amid speculation of an intervention in the FX markets. This dragged the pair from around five-week highs to the 0.8120 area.

Gold (XAU/USD) price rises over 1% on Wednesday as the Greenback softens amid speculation of an intervention to bolster the Japanese Yen (JPY), while US Treasury yields hold firm after weak US jobs data. At the time of writing, the XAU/USD pair trades at $4,373.

The Federal Reserve released its Beige Book, in which the US central bank revealed that economic activity increased modestly since early July, while overall employment rose slightly. Regarding inflation, prices rose in eight districts.

MUFGs Lloyd Chan remains cautious on the Indonesian Rupiah as domestic inflation accelerates and Gross Domestic Product (GDP) growth stays above 5%. The trade balance has improved slightly but remains weaker than 2025 averages due to higher Oil and gas imports.

The Bank of Canada (BoC) left its overnight interest rate unchanged at 2.25%, as widely anticipated, but delivered a more cautious message as inflation risks increased and the recovery became harder to assess.

Pairs on Watch - FX:GBPUSD : I am looking for shorts on this pair in line with the DXY breaking to the upside and the higher timeframe continuing to take over. A 1H clear structure forming underneath the low to the left is ideal, possibly maybe retest the previous low for better stop protection and we can get short with the sentiment of the DXY remaining bullish. FX:AUDUSD : I am using this as a hedge pair against the GU short I am looking for. Price is positioned at a low where it could …

ING analysts Warren Patterson and Ewa Manthey note Brent has pushed back above $95/bbl as escalating Persian Gulf tensions revive supply risk and a geopolitical premium.

Antje Praefcke at Commerzbank highlights that markets now price nearly a 70% chance of a September Fed hike after Chair Kevin Warshs hawkish speech, but stresses upcoming US inflation data will be decisive.

Silver price (XAG/USD) recovers its early losses and rebounds to near $64.00 till the early European session on Wednesday. The white metal is broadly under pressure as surging United States (US) Treasury yields due to hawkish Federal Reserve (Fed) bets are hurting non-yielding assets.

Bank of Japan (BoJ) board member Hajime Takata said on Wednesday that the central bank needs a different response from conventional semi-annual rate hike pace.

The Indian Rupee (INR) opens flat at around 94.95 against the US Dollar (USD) on Wednesday, but is close to its two-month low of 94.80 posted the previous day.

USD/CHF gains for the second successive day, trading around 0.8130 during the Asian hours on Wednesday.

NZD/USD gains ground for the second consecutive day, trading around 0.5840 during the Asian hours on Wednesday.

The USD/JPY pair touches a fresh high since July 31 on Wednesday, though it lacks follow-through buying and remains below 160.50 through the Asian session.

Gold (XAU/USD) drops to a nearly four-week low during the Asian session on Wednesday and is now looking to extend the fall further below $4,300 amid a bearish fundamental backdrop.

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is gaining ground for the second successive day and trading around 99.70 during the Asian hours on Wednesday.

The AUD/NZD cross builds on the better-than-expected Australian data-inspired gains and rallies to the 1.2200 mark, or the highest since July 8, after the Reserve Bank of New Zealand (RBNZ) announced its policy decision.

The NZD/USD pair tumbles to near 0.5855 during the Asian trading hours on Wednesday. The New Zealand Dollar (NZD) faces some selling pressure against the US Dollar (USD) after the Reserve Bank of New Zealand (RBNZ) interest rate decision.

The GBP/USD pair declines to near 1.3510 during the early Asian trading hours on Wednesday. Ongoing tensions in the Middle East provide some support to a safe-haven currency such as the US Dollar (USD) against the British Pound (GBP). All eyes will be on the US August jobs report later on Friday.