Dollar Holds Steady Amid Falling U.S. Wholesale Prices and Central Bank Watch

Economic

Forex

Summary:

The U.S. dollar stabilized in early Asian trading after August wholesale prices unexpectedly fell, reinforcing expectations that the Federal Reserve will cut interest rates next week...

U.S. Dollar Movement and Inflation Signals

The dollar index edged slightly higher to 97.822, marking its third consecutive day of gains. The increase follows the Labor Department’s report showing that the Producer Price Index (PPI) for final demand fell 0.1% in August, reversing some of the prior month’s 0.7% jump. Currency strategists interpret the soft PPI reading as a signal that inflationary pressures remain moderate, bolstering market expectations for a rate cut from the Fed. Currently, traders see a near certainty for a 25-basis-point cut at the upcoming September meeting, while an 8% chance exists for a larger 50-basis-point move.

The Fed’s rate-setting decisions remain in focus amid political developments. The Trump administration is appealing a federal court ruling that temporarily blocked the firing of Governor Lisa Cook, aiming to influence policy before the September meeting. Meanwhile, Stephen Miran’s nomination to the Fed was advanced by the Senate Banking Committee, though uncertainty remains whether he will participate in time. These developments add a layer of political risk to expectations for U.S. monetary policy.

Global Currency Reactions

Against the Japanese yen, the dollar remained flat at 147.41 yen, as Japanese wholesale prices rose 2.7% year-on-year in August, indicating persistent inflation pressures. The euro strengthened slightly to $1.1698 ahead of the European Central Bank’s meeting, where rates are widely expected to remain unchanged. Geopolitical tensions, including Poland’s interception of suspected Russian drones, are contributing to cautious sentiment in Europe.

Commodity-linked currencies also showed movements: the Australian dollar climbed to $0.66165, supported by gains in iron ore, crude oil, and gold prices, while the offshore yuan strengthened to 7.1184 per dollar. The New Zealand dollar fell marginally to $0.59375, and sterling remained steady at $1.3527.

Markets are positioning for dovish signals from major central banks as inflation readings remain moderate and global uncertainties persist. Investors are closely watching consumer price data in the U.S. and upcoming policy statements in Europe and Japan, which will likely shape currency and rate expectations in the near term.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Gerik

Economic

Mexico’s Tariff Move and Rationale

President Claudia Sheinbaum unveiled a set of import taxes targeting products from China, South Korea, Thailand, India, the Philippines, and Indonesia, covering goods such as vehicles, auto parts, electronics, textiles, shoes, plastics, and toys. The tariffs, which will apply to about 8.6% of Mexico’s total imports from non-free-trade partners, are intended to strengthen domestic production while indirectly offsetting the impact of U.S. tariffs on Mexican goods, particularly in the automotive sector, which represents 23% of national manufacturing output.

Currently, the products affected already carry an average tariff of 16%, which will now rise to the maximum allowed under international trade agreements. China stands to be the most impacted, given Mexico imported $130 billion of Chinese products in 2024, second only to U.S. imports. The Mexican government emphasizes that these tariffs are consistent with international trade rules, distinguishing them from the punitive measures imposed by the U.S. that have targeted Mexican steel, aluminum, and automotive exports.

Diplomatic Implications

While some analysts, including Oscar Ocampo from the Mexican Institute for Competitiveness, suggest the new tariffs could enhance Mexico’s negotiating position with Washington, the ultimate effect remains uncertain. The Mexican administration insists the move is designed to stimulate domestic production and counter goods sold below market prices, rather than respond to direct U.S. pressure. China has formally opposed the restrictions, arguing they violate its legitimate rights and are unjustly coercive.

Mexico continues to navigate a complex trade environment, balancing domestic industrial protection with diplomatic relations. The new tariffs come as Mexico, the U.S., and Canada prepare to revise their trilateral free trade agreement, and they may play a role in easing the U.S.-imposed automotive tariffs. By taking a stance rooted in international guidelines, Mexico signals its intent to safeguard domestic interests while maintaining credibility in multilateral trade negotiations.

Source: AP

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Commodity

Oil Markets Pause After Recent Gains

Brent crude edged up just 1 cent to $67.50 a barrel, while U.S. West Texas Intermediate (WTI) added 2 cents to $63.69. The modest movement follows Wednesday’s rally, which was driven by Israel’s strike on Hamas leadership in Qatar and Poland’s interception of Russian drones over its territory. Despite these geopolitical flashpoints, neither event posed an immediate threat to global oil supplies, and markets refocused on underlying economic fundamentals.

Data from the U.S. Energy Information Administration indicated a 3.9 million barrel increase in crude inventories for the week ending September 5, against expectations of a 1 million barrel draw. Gasoline stocks rose by 1.5 million barrels, far exceeding forecasts. Rising stockpiles, combined with falling producer prices and softening labor market conditions, signal a slowdown in U.S. demand and broader economic activity, tempering oil price gains despite geopolitical anxieties.

Monetary Policy Influences Market Outlook

Economic indicators suggesting a cooling U.S. economy have reinforced expectations that the Federal Reserve may implement a 25 basis point rate cut at its upcoming mid-September meeting, with analysts noting a small possibility of a larger 50 basis point cut. Such monetary easing could further impact oil demand indirectly by affecting economic growth and consumption. Meanwhile, the European Central Bank is widely anticipated to maintain its current interest rates, providing stability but limited stimulus to energy markets.

While attacks in the Middle East and military incidents in Poland had previously spurred short-term volatility, the current flat oil prices reflect a market increasingly focused on structural factors: oversupply concerns and weakening U.S. demand. Investors appear to be weighing immediate geopolitical risk against the longer-term implications of a softening global economy, underscoring how complex and interconnected energy markets have become.

In essence, oil markets are in a holding pattern where geopolitical shocks may create temporary spikes, but broader economic trends, inventory levels, and monetary policy expectations are the dominant factors influencing price stability.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Winkelmann

Stocks

Forex

Political

China–U.S. Trade War

Economic

Key Points:

● The US-China trade truce extension removed a 145% tariff threat but left tensions unresolved.

● US tariffs hit China’s economy hard, with exports to the US plunging 33% in August.

● Mainland equities remain firm, with the Hang Seng up 30.6% YTD despite trade headwinds.

China Faces Trade Showdown As Tariff Truce Masks Deepening Strains_1

US-China Trade War Truce

The US-China trade truce may have bought 90 days of calm, but beneath the surface, tensions are hardening. With tariffs, supply chains, and rare earths in play, the path to a balanced trade deal looks more fragile than ever.The US and China agreed to extend the trade war truce by a further 90 days in August. The agreement removed the threat of a 145% levy on Chinese shipments until October. However, since the extension, the two sides have made little to no progress toward a trade deal.

Despite the truce extension, tensions have escalated since two days of negotiations resulted in a pledge to uphold the Geneva Trade Agreement. Crucially, China committed to lifting restrictions on rare earth minerals, while the US would remove controls on semiconductor chip shipments.Since the Geneva agreement, the London talks, and the second 90-day truce extension, several events have dampened hopes for a balanced US-China trade deal.

Geopolitical Pressures: US, EU, and India

In recent months, the US administration expanded its tariff policies to target transshipments. Notably, Vietnam agreed to a 40% US levy on transshipments bound for the US, while Indonesian shipments face a 19% tariff.Vietnamese exports to the US declined by 2% month-on-month in August, reflecting the effects of a 20% direct tariff and 40% transshipment levy on trade terms. Coincidentally, Vietnamese imports from China also declined 2%.Rumors suggest the US may introduce a rules-of-origin trade policy, which could further impact China’s trade terms.

The administration may also be using bilateral trade talks to weaken global demand for Chinese goods. This week, reports emerged that Trump pressured Europe to hit China and India with 100% tariffs to dissuade Russian oil purchases and increase pressure on Moscow to reach a peace deal with Ukraine. According to news outlets, the US administration will mirror the EU’s tariff.Notably, Trump’s request followed China-Russia-backed Shanghai Cooperation Organization (SCO). President Vladimir Putin and Indian Prime Minister Narendra Modi attended the summit.While targeting China through the EU, the US has also resumed trade talks with India. President Trump announced progress toward a deal, stating:

“I am pleased to announce that India, and the United States of America, are continuing negotiations to address the Trade Barriers between our two Nations. […[ I feel certain that there will be no difficulty in coming to a successful conclusion for both of our Great Countries!”Trump could pressure India to stop purchasing Russian oil and to step back from China. Could the US President be looking to tilt the balance in his favor ahead of renewed trade talks with China?

China’s Economy Under Strain

US tariffs have started to affect the Chinese economy. Exports to the US fell 33% year-on-year in August, slowing total export growth to 4.4% compared with 7.2% in July. Unemployment has risen from 5% to 5.2%, with youth unemployment soaring to 17.8% in August, up from 14.5% in July. The sharper increase in youth unemployment highlighted structural labor market challenges. Rising unemployment also weighed on retail sales, raising doubts about Beijing’s 5% GDP growth target.Beijing responded to the slowing economic momentum, pledging fresh stimulus measures. On Wednesday, September 10, China’s National People’s Congress Standing Committee held a plenary meeting, vowing to utilize fiscal policy to support stable employment and trade.

Robin Brooks, Senior Fellow at the Brookings Institution, commented on China’s trade data and economic outlook, stating:“China is in a tough spot. Its exports to the US are down 24% q/q in Jun ’25. Exporters have only 2 options: (i) transship to the US; (ii) export goods to other countries at a discount to generate demand. Either way, a big hit to profitability and a deflationary shock for China.”

Mainland Stock Markets Hold Firm

Mainland China equity markets have avoided a sharp reversal of year-to-date (YTD) gains despite cracks forming in the economy and margin squeezes.The CSI 300 and the Shanghai Composite Index have risen 12.97% and 13.74% YTD, tracking the Nasdaq Composite Index (13.34%). However, the Hang Seng Index leads the way, rallying 30.61% YTD, benefiting from Mainland China and overseas investor inflows.Beijing’s pledges to support the economy have bolstered demand for Mainland and Hong Kong-listed stocks. However, trade developments, China’s housing crisis, and domestic demand will be key market forces in the near term.

Weakening external demand could impact the labor market. Rising unemployment may weigh on consumer sentiment and spending, undermining Beijing’s efforts to boost consumption.However, addressing the housing sector crisis and reaching a trade deal with the US could change the narrative. Crucially, a trade deal would likely boost external demand, easing margin pressures. Rising margins could spur job creation and lift domestic consumption.

China CSI 300 – Nasdaq Composite Index – Daily Chart – 110925

The Road Ahead: Consumption, Tariffs, and Stimulus

For investors, China’s bid to boost domestic consumption and soften trade shocks will influence sentiment. Beijing’s stimulus efforts and trade developments will determine whether the markets can maintain their bullish momentum.However, traders should continue assessing Chinese economic data for clues on the effectiveness of Beijing’s policy measures. Retail sales and industrial production on September 15 will reveal whether July’s softer data was isolated or part of a deteriorating trend.

Softer retail sales and industrial production, alongside deflationary pressures, could bring Beijing’s 5% GDP growth target into question. Conversely, a rebound in retail sales and industrial production could send Mainland China’s equity markets to fresh 2025 highs.

Why are Mainland China’s equity market performances crucial for Beijing?

Leading economist Hao Hong recently remarked on Mainland China’s market trends and consumer confidence, stating:“There’s no quick fix to boosting household confidence except for a stock market rebound.”

Source: FX Empire

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Winkelmann

Cryptocurrency

Forex

Stocks

Key Points:

● Sol Strategies lists on Nasdaq, enhancing market access.

● $94M in Solana held at inception.

● Support from Multicoin Capital and Jump Crypto.

SOL Strategies began trading on the Nasdaq on September 9, 2025, with $94 million in Solana holdings under the ticker symbol 'STKE.'This uplisting enhances Solana's institutional credibility and market access, significantly impacting the cryptocurrency's U.S. exposure and liquidity.Sol Strategies has commenced trading on the Nasdaq Global Select Market, under ticker symbol 'STKE', marking a significant milestone with $94 million in Solana holdings. This uplisting from the Canadian Securities Exchange occurred on September 9, 2025.

Leah Wald, the CEO, leads SOL Strategies alongside Kyle Samani, chairing the $1 billion Solana treasury. Samani, co-founder of Multicoin Capital, is pivotal for the institutional endorsement of the Solana ecosystem.The launch brings increased liquidity and regulatory oversight for Solana-focused investments, providing greater access for U.S. investors. The support from notable crypto venture funds enhances the institutional confidence in Solana's potential.Given the backing from Multicoin Capital, Galaxy Digital, and Jump Crypto, Sol Strategies is poised to strengthen the Solana ecosystem's foundation. "The uplisting to Nasdaq marks a significant milestone for our company and underscores our commitment to enhancing the Solana ecosystem." - Leah Wald, CEO, Sol Strategies

This event holds potential implications for financial markets and regulatory landscapes, serving as a landmark for Solana-focused trading on major exchanges. The commitment indicates future opportunities for expanding Solana’s influence and infrastructure.Historical precedents, such as the listing of Coinbase on Nasdaq, suggest possible surges in market interest and funding. The focus remains on regulatory adaptations and the broader acceptance of blockchain-based financial instruments.

Source: CryptoSlate

Risk Warnings and Disclaimers

Add to Favorites

IC Markets

Economic

Political

Forex

Stocks

US Markets Mixed After Inflation Drop – Dow Down 0.5%

US stock indices had a mixed trading day yesterday after key PPI data came in well under expectations, pushing the market to lock in more Fed rate cuts in the coming months. The Dow dropped 0.48% to 45,490, while the S&P and Nasdaq again notched up fresh record closes as AI stocks powered higher (Oracle up 36%), finishing at 6,532 and 21,886 respectively. Treasury yields pulled back after the data, the 2-year down 1.2 basis points to 3.544% and the 10-year down 3.9 basis points to 4.045%. However, the dollar remained relatively steady, with the DXY up 0.02% to 97.81. Oil prices jumped higher as geopolitical tensions increased in both the Middle East and Eastern Europe, Brent up 1.66% to $67.49 and WTI up 1.64% to $63.66 a barrel. Gold also gained ground on haven flows, although it stopped just short of another record close, up 0.39% to $3,640.38 an ounce.

CPI Data in Focus Today

Yesterday’s PPI data all but locked in 75 basis points worth of Fed rate cuts by the year-end for many in the market. However, tonight’s CPI data could have a lot more to say about those odds by the end of today’s trading. The market is now 92% pricing in a 25-basis-point Fed rate cut next week, with the odds for 75 basis points by December now sitting at 64%. Tonight’s month-on-month CPI and Core CPI numbers are expected to come in at +0.3%, with the year-on-year number at +2.9%. Anything significantly off these prints will see big moves in Fed rate cut expectations—although probably not for next week—and substantial moves in the market. A lower print will see odds for the three rate cuts increase hugely and put pressure on yields and the dollar, whereas anything “sticky” could see some unwinding of those bets and consequent moves in the opposite direction.

Busy Calendar Day with a Huge Hour of Power Ahead for Traders

It is a busy calendar day ahead for traders today, with big central bank updates coming alongside key data releases, with the cross-over time between London and New York having the potential to really hit markets. Asian markets will see the initial focus on the land of the long white cloud, with Reserve Bank of New Zealand Governor Christian Hawkesby due to speak in Auckland. The big updates for the day will come later, with the European Central Bank due to update the market on its latest interest rate call just 15 minutes ahead of the key US CPI (exp. +0.3% m/m, +2.9% y/y) and Core CPI (exp. +0.3% m/m) data releases. The US Weekly Unemployment Claims numbers are due out at the same time as the CPI data, but expect the inflation numbers to dominate. Just to add a bit more spice to the mix, the ECB press conference is scheduled just 15 minutes after the US data, with traders expecting the EURUSD to be particularly lively in that “Hour of Power.”

Source: IC Markets

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

MarketPulse by OANDA Group

Forex

Technical Analysis

Economic

This week, some data dampened the economic outlook for both the US and Canada. The past four months didn’t show much in that aspect, and participants started to believe that tariffs wouldn’t influence activity that much.However, it seems that the markets were too optimistic for North America. August gave a first warning sign, with the US Non-Farm Payrolls showing the first crack in the labor market, which was confirmed by last Friday’s report.

Canada is also struggling with a regressing GDP in the second quarter, undoubtedly due to downbeat employment figures (-60K in August) and pressure from tariffs on key exports such as metals (aluminum, steel) and lumber.The degrading economic outlook and slowdown in hiring are essentially bringing back hopes for cuts with a 90% priced-in Bank of Canada reduction (from 2.75% to 2.50%) at the upcoming meeting on the same day as the FOMC, September 17th.For the Federal Reserve, a much-anticipated cut should also finally take place (Rates are currently at 4.50%), and the question from which we will get an answer tomorrow is:

Will Consumer Prices take a significant bump, barring the way for a 50 bps cut?

Any release below the expected 0.30% raise should flush the US Dollar, and markets would heavily lean towards a 50 bps (currently at 10% pricing).On the other hand, a beat should leave the 25 bps in check but reduce odds for cuts at subsequent meetings (2 meetings after this one: October and December).Let’s dive right into a few charts to get an overview on North American Markets, from US and Canadian equity Markets performance, USD and CAD performance to USDCAD and DXY charts.

North-American Indices Performance

Bringing Back The Cuts To US And Canada_1

North American Top Indices performance since last Monday – September 10, 2025 – Source: TradingView

Same as in previous weeks, the TSX just seems to absolutely disregard the downbeat economic data.Never forget that equities are forward looking and cut expectations in an economy that is still far from in shambles and expected to grow in the decades to come attract buying.US Markets are still holding resiliently against the streak of downbeat employment data also lifted by hopes for increased rate cuts.All indices have marked new record highs in today’s session actually but have since seen some profit-taking flows ahead of tomorrow’s inflation report.

Dollar Index 8H Chart

Bringing Back The Cuts To US And Canada_2

Dollar Index 8H Chart, September 10, 2025 – Source: TradingView

The US Dollar is holding its range as neither the NFP or this morning’s PPI have changed the outlook for future rate cuts.This puts that much emphasis on tomorrow’s CPI report which should be one of the most important one in years. Get ready!With the range still holding, I invite you to check out our most recent Dollar Index analysis to spot your levels of interest for the USD.

US Dollar Mid-Week Performance vs Majors

Bringing Back The Cuts To US And Canada_3

USD vs other Majors, September 10, 2025 – Source: TradingView.

The action in the US Dollar has stayed stubbornly rangebound.

The latest downward revisions to the US Labor data since March 2025 (you can check out the report right here) had initially hurt the USD, but as can be seen in the latest rebound, buyers have held its bid at new range extremes.War headlines around the world still maintain somewhat of a US Dollar demand which slightly reduced after this morning’s welcomed PPI report (are tariff-related price hikes really just a one-off??)Expect high swings for the USD tomorrow as markets will look to confirm the outcome of next week’s FOMC.

Canadian Dollar Mid-Week Performance vs Majors

Bringing Back The Cuts To US And Canada_4

CAD vs other Majors, September 10, 2025 – Source: TradingView.

The Loonie couldn’t hold its past week’s strength with the aggressively low employment figures released last Friday. This week has been atrocious for the Maple Dollar.With more cuts expected ahead, it will be very interesting to see what the Bank of Canada will have to say at next week’s meeting. The BoC would also love a higher rate cut from the USD to help with the CAD’s current downfall.

Intraday Technical Levels for the USD/CAD

Bringing Back The Cuts To US And Canada_5

USDCAD 4H Chart, September 10, 2025 – Source: TradingView

USDCAD has freshly marked some highs at similar levels as the August 26th top, but seems to be consolidating at the current daily peak.It will be very interesting to spot the reactions for the US Dollar and if an eventually stronger USD would also assist the CAD on its perpetual descent.

Levels to place on your USDCAD charts:

Resistance Levels:

● 1.3925 August 22 highs (most recent peak)

● 1.3850 to 1.3860 Main resistance (1.38670 daily highs)

● May Highs 1.40185

Support Levels:

● immediate Pivot 1.38 Handle +/- 150 pips

● Key longer-term pivot Zone 1.3750

● Main Support Zone 1.3675 to 1.3686

US and Canada Economic Calendar for the Rest of the Week

Bringing Back The Cuts To US And Canada_6

US and Canadian Data for the rest of the week

With Markets not budging much from the consequent NFP and PPI reports, everything will depend on tomorrow’s US CPI release (8:30 A.M. ET).With 0.3% expected for both the Headline and Core, reactions will have to be monitored closely as Markets will jump around in all directions.To guide you with tomorrow’s volatility, track the Dollar Index, the FEDWatch Tool (for Interest rate expectations) and the 2-year yield.

Except for tomorrow’s US CPI, some other less-relevant data may still move markets with the Weekly jobless claims tomorrow, Canadian capacity utilization on Friday (8:30) and the following University-of-Michigan Consumer Sentiment at 10:00 A.M.