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US Dollar Strength Deepens as Fed Hike Bets Pressure Metals and Major Currencies | 24th September, 2

Dollar Strength Deepens Global markets remain focused on the increasingly hawkish Federal Reserve outlook, with stronger US economic activity and elevated Treasury yields reinforcing expectations for another rate hike. The firmer US Dollar is weighing on non-yielding assets, pushing Gold toward $4,300 and Silver toward $64, while GBP/USD and EUR/USD remain under pressure near recent lows. The Canadian Dollar is holding relatively steady, although uncertainty around oil prices and widening US-Canada yield differentials remain important drivers. Meanwhile, the upcoming Trump-Xi summit and ongoing US-Iran tensions could introduce additional volatility across currencies and commodities. Gold (XAU/USD) Forecast Current Price and Context Gold remains under pressure below the $4,300 psychological level after touching a one-week low. Rising expectations for another Federal Reserve rate hike are lifting US yields and reducing the appeal of the non-yielding metal, while geopolitical tensions are providing only limited support for the safe-haven asset. Key Drivers • Geopolitical Risks: US-Iran tensions remain a source of safe-haven demand, although stronger USD momentum is limiting Gold's upside. • US Economic Data: Stronger US business activity has increased expectations that the Fed may need to tighten policy further. • FOMC Outcome: Markets are increasingly pricing another Fed hike, creating a bearish fundamental backdrop for Gold. • Trade Policy: The upcoming Trump-Xi summit could generate volatility if the two sides signal progress or renewed trade tensions. • Monetary Policy: Higher-for-longer US rates increase the opportunity cost of holding non-yielding Gold. Technical Outlook • Trend: Bearish below the $4,316–$4,359 resistance zone. • Resistance: $4,316, followed by $4,359 and $4,405. • Support: $4,227, followed by $4,101 and $3,940. • Forecast: A sustained break below $4,227 could expose Gold to deeper downside toward $4,100, while a recovery above $4,359 would ease the immediate bearish pressure. Sentiment and Catalysts • Market Sentiment: Bearish, with traders favoring the USD amid rising Fed hike expectations. • Catalysts: Fed commentary, US yields, Iran developments and Trump-Xi summit headlines. Silver (XAG/USD) Forecast Current Price and Context Silver has fallen toward the $64.00 area as traders increase expectations for additional Federal Reserve tightening. Like Gold, Silver is facing pressure from higher US yields and a stronger Dollar, while its industrial component makes it particularly sensitive to changes in global growth expectations. Key Drivers • Geopolitical Risks: Middle East tensions could support safe-haven demand but may not be sufficient to offset USD strength. • US Economic Data: Resilient US activity is reinforcing expectations for additional monetary tightening. • FOMC Outcome: Higher Fed hike expectations remain the dominant short-term pressure on Silver. • Trade Policy: US-China trade developments could influence industrial-demand expectations and Silver sentiment. • Monetary Policy: Higher real yields generally create a challenging environment for precious metals. Technical Outlook • Trend: Bearish while trading below the $66–$68 resistance area. • Resistance: $66.00, followed by $68.00. • Support: $64.00, followed by $62.00 and $60.00. • Forecast: Continued weakness below $64 could open the way toward $62, while a recovery above $66 would be needed to signal improving short-term momentum. Sentiment and Catalysts • Market Sentiment: Bearish as rate expectations favor the US Dollar. • Catalysts: Fed rate expectations, US yields, China trade headlines and broader commodity sentiment. USD/CAD Forecast Current Price and Context USD/CAD is consolidating around 1.4100 after three consecutive sessions of gains. The Canadian Dollar is being pulled in opposite directions by uncertainty in the oil market and the widening interest-rate advantage of the US Dollar. Key Drivers • Geopolitical Risks: US-Iran tensions and potential restrictions around the Strait of Hormuz could create sharp moves in crude oil and, consequently, CAD. • US Economic Data: Strong US manufacturing activity has increased expectations for another Fed hike. • FOMC Outcome: Rising expectations for October tightening continue to support the USD. • Trade Policy: US-Canada trade developments remain an additional risk for the Canadian economy. • Monetary Policy: Wider US-Canada yield differentials remain a structural headwind for CAD. Technical Outlook • Trend: Bullish above 1.4000. • Resistance: 1.4100, followed by 1.4150. • Support: 1.4015, followed by 1.3950. • Forecast: Holding above 1.4000 keeps the bullish structure intact, with a sustained break above 1.4100 potentially targeting 1.4150. Sentiment and Catalysts • Market Sentiment: Moderately bullish USD/CAD. • Catalysts: Oil prices, Fed expectations, US data and Iran-related developments. GBP/USD Forecast Current Price and Context GBP/USD remains near its lowest levels since early July, trading around the 1.3230–1.3225 area. The pair has maintained a negative bias as stronger Fed tightening expectations contrast with the Bank of England's more cautious policy stance. Key Drivers • Geopolitical Risks: Broader risk sentiment and US-China developments could influence demand for the Dollar and Pound. • US Economic Data: Strong US activity continues to support the case for additional Fed tightening. • FOMC Outcome: Rising Fed hike expectations are supporting higher Treasury yields and the USD. • Trade Policy: The Trump-Xi summit could create short-term volatility across the Dollar and risk-sensitive currencies. • Monetary Policy: Fed-BoE divergence remains a key bearish factor for GBP/USD. Technical Outlook • Trend: Bearish below 1.3250. • Resistance: 1.3255, followed by 1.3345 and 1.3410. • Support: 1.3140, followed by 1.3100. • Forecast: Sustained trading below 1.3250 keeps the downside bias intact, with a break below 1.3140 potentially extending the decline. A move back above 1.3345 would reduce near-term bearish pressure. Sentiment and Catalysts • Market Sentiment: Bearish. • Catalysts: Fed expectations, BoE policy guidance, UK economic data and Trump-Xi summit headlines. EUR/USD Forecast Current Price and Context EUR/USD is trading below 1.1400 and has reached its lowest level since late July as the US Dollar extends its gains. The pair remains pressured by the widening monetary-policy advantage of the US, while traders also look ahead to the Trump-Xi summit for potential trade-policy signals. Key Drivers • Geopolitical Risks: US-Iran tensions continue to influence energy prices and inflation expectations. • US Economic Data: Resilient US activity is supporting expectations for further Fed tightening. • FOMC Outcome: Rising expectations for another Fed hike are keeping the USD supported. • Trade Policy: The Trump-Xi summit represents a major near-term catalyst for global risk sentiment and EUR/USD. • Monetary Policy: Diverging Fed and ECB expectations continue to favor the Dollar. Technical Outlook • Trend: Bearish below 1.1400. • Resistance: 1.1400, followed by 1.1450. • Support: 1.1350, followed by 1.1300. • Forecast: A sustained break below 1.1350 could expose the pair to 1.1300, while a recovery above 1.1450 would signal a potential stabilization in the bearish trend. Sentiment and Catalysts • Market Sentiment: Bearish. • Catalysts: Fed rate expectations, ECB policy outlook, US economic data and Trump-Xi summit developments. Wrap Up The US Dollar remains the central driver across today's major markets as rising Fed hike expectations push Treasury yields higher and weigh on precious metals and major currencies. Gold and Silver remain vulnerable while GBP/USD and EUR/USD continue to trade near important technical lows. USD/CAD is holding near 1.4100 as oil uncertainty offsets some of the Dollar's strength. Traders will now focus on incoming US data, central-bank commentary and the Trump-Xi summit, with geopolitical developments adding another potential source of volatility. Ready to trade global markets with confidence? Join Moneta Markets today and unlock 1000+ instruments, ultra-fast execution, ECN spreads from 0.0 pips, and more! Start now with Moneta Markets!

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Publication date:

2026-09-24 05:46:30 (GMT)

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