IC – Asia Fundamental Forecast | 25 September 2026
What happened in the U.S. session?
During the U.S. trading session on September 24, 2026, financial markets were influenced by stronger U.S. economic activity, declining jobless claims, and a rebound in new home sales, alongside expectations that the Federal Reserve could maintain a restrictive monetary policy.
The stronger economic data and inflation concerns contributed to rising Treasury yields and supported for the U.S. dollar, while higher yields placed downward pressure on gold, silver, and technology stocks. Oil markets remained sensitive to geopolitical developments and risks surrounding energy supply routes.
What does it mean for the Asia Session?
Holidays in China, South Korea and Taiwan could reduce regional liquidity, while USD strength, elevated Treasury yields, oil above $100, the Trump–Xi summit and USD/JPY intervention risk remain the major themes. Gold and crude oil remain highly sensitive to geopolitical headlines. Later in the global session, U.S. durable-goods data and the revised Michigan sentiment/inflation expectations could create another volatility window.
The Dollar Index (DXY)
Key news events today
Revised UoM Consumer Sentiment (2:00 pm GMT)
Revised UoM Inflation Expectations (2:00 pm GMT)
What can we expect from the DXY today?
The dollar is being influenced by a combination of Federal Reserve tightening expectations, persistent inflation risks, and geopolitical uncertainty. For Friday, traders should monitor U.S. economic releases and Fed-related commentary for potential volatility in USD pairs, particularly EUR/USD, GBP/USD, USD/JPY, and Gold (XAU/USD). Stronger-than-expected U.S. data could support rate-hike expectations, while weaker data could challenge the dollar’s recent support.
Central Bank Notes:
- The Federal Open Market Committee (FOMC) raised the federal funds target range by 25 basis points to 3.75%–4.00% at its September 15–16, 2026 meeting. The decision was approved unanimously by a 12–0 vote, marking a shift from the July meeting, when rates were held at 3.50%–3.75%. The Fed said the move was intended to support its dual mandate and promote a more timely return of inflation toward its 2% objective.
- The labor market remains relatively resilient. The September FOMC statement said job gains have kept pace with workforce growth and that the unemployment rate has changed little. The Fed continues to monitor employment conditions closely alongside inflation when determining the appropriate path for monetary policy.
- Inflation remains above the Federal Reserve’s 2% target and continues to be a key policy concern. The September decision explicitly noted that inflation remains elevated. The latest projections put median headline PCE inflation at 3.7% for 2026, before falling to 2.3% in 2027, 2.1% in 2028, and 2.0% in 2029. Core PCE inflation is projected at 3.4% in 2026, declining to 2.5% in 2027 and 2.2% in 2028.
- Economic activity continues to expand at a solid pace. The Fed highlighted resilient domestic spending, strong productivity growth and robust capital investment, although uncertainty remains elevated partly because of geopolitical developments. The September projections raised the median 2026 GDP-growth forecast to 2.3%, compared with 2.2% in the June projections.
- The September projections show a higher expected policy-rate path than in June. The median projection for the federal funds rate is now 4.1% at the end of 2026, compared with 3.8% in the June projections. The median is projected at 4.1% in 2027, 3.9% in 2028, and 3.6% in 2029. This indicates that policymakers’ projected rate path remains relatively restrictive while inflation is expected to move gradually toward the target.
- Chair Kevin Warsh continues to emphasize the importance of returning inflation to 2%. Ahead of the September meeting, Warsh indicated that the Fed would have further work to do if policymakers could not gain sufficient confidence that inflation was moving toward the 2% objective. The September decision subsequently resulted a 25-basis-point hike, while the Committee continued to emphasize its assessment of incoming economic data and risks.
- The September economic projections show a more balanced growth outlook but continued inflation risks. The median unemployment forecast is 4.1% for 2026 and 2027, while the Fed projects GDP growth of 2.3% in 2026 and 2.4% in 2027. At the same time, PCE inflation is expected to remain substantially above target through 2026 before moving closer to 2% over subsequent years.
- The next meeting is scheduled for 27 to 28 October 2026.
Next 24 Hours Bias
Strong Bullish
Gold (XAU)
Key news events today
Revised UoM Consumer Sentiment (2:00 pm GMT)
Revised UoM Inflation Expectations (2:00 pm GMT)
What can we expect from the Gold today?
Gold is under pressure in Friday’s session from a stronger U.S. dollar and expectations that the Federal Reserve could maintain a restrictive monetary policy, which increases the opportunity cost of holding non-yielding assets such as gold.
Recent reports indicate that spot gold fell to approximately $4,349.94 per ounce on September 21, while expectations of another Fed rate hike in December and elevated Treasury yields continued to weigh on bullion. At the same time, geopolitical tensions involving the Middle East and ongoing safe-haven demand are providing counterbalancing support.
Next 24 Hours Bias
Strong Bearish
The Australian Dollar (AUD)
Key news events today
Employment Change (1:30 am GMT)
Unemployment Rate (1:30 am GMT)
What can we expect from AUD today?
The Australian dollar is heading into Friday, September 25, with attention focused on RBA interest rate expectations, elevated inflation risks, and broader US dollar movements. RBA Governor Michele Bullock’s recent comments about persistent inflationary pressure and the possibility of further tightening have kept the September 29 policy meeting in focus. At the same time, stronger US inflation data and a firmer US dollar have created headwinds for AUD/USD, while developments surrounding China and commodity markets remain relevant to the Aussie.
Central Bank Notes:
- The Reserve Bank of Australia (RBA) is expected to maintain a cautious, data-dependent policy stance heading into its September 2026 Monetary Policy Meeting. The Cash Rate Target remains at 4.35%, following three increases earlier in 2026. The RBA has indicated that monetary policy needs to remain sufficiently restrictive to bring inflation back toward the 2–3% target while allowing the Board to assess the effects of previous tightening on household demand, employment and economic activity.
- Inflation remains the central issue for the September meeting, although headline price pressures have continued to moderate. Australia’s CPI rose 3.8% year-on-year in June 2026, down from 4.0% in May, while trimmed-mean inflation remained at 3.6%. This suggests that underlying inflation is proving more persistent than headline inflation and remains above the RBA’s 2–3% target band. Housing costs continue to be an important source of inflationary pressure, while the end of some electricity rebates has also contributed significantly to household costs.
- The August and September inflation data will be particularly important for determining the RBA’s next move. The ABS is scheduled to release July 2026 CPI on 26 August, giving policymakers a fresh inflation reading before the September meeting. The data will help determine whether the recent moderation in headline inflation is becoming more broad-based or whether services and domestic cost pressures remain stubborn.
- The labour market remains relatively resilient, but there are early signs of moderation. Australia’s unemployment rate was 4.4% in June, while employment increased by approximately 76,300 people and the participation rate rose to 67.0%. The increase in employment gives the RBA room to maintain keep policy restrictive policy stance, although rising unemployment or a significant decline in employment growth could strengthen the case for eventually easing monetary policy.
- Wage growth will remain an important indicator for the September decision. The latest available Wage Price Index showed wages increasing 0.8% quarter-on-quarter and 3.3% year-on-year in the March quarter. The June-quarter wage data is scheduled for release on 19 August 2026, meaning the RBA will have this information available before its September meeting. A stronger-than-expected wage result could reinforce concerns about persistent domestic inflation, while softer wage growth would support the argument that inflation is gradually returning toward target.
- Household demand and economic growth will remain closely monitored. Higher borrowing costs continue to place pressure on mortgage holders and discretionary household spending. At the same time, improving real incomes and easing headline inflation could gradually support consumption later in the year. The RBA will therefore need to balance the risk of keeping rates restrictive for too long against the risk of easing policy before underlying inflation has been sufficiently contained.
- Global economic and commodity-market conditions remain an important risk for Australia. Developments in energy prices, geopolitical tensions and China’s economic performance could have significant implications for Australia’s inflation and export outlook. A renewed increase in energy prices could raise Australia’s inflation outlook, while weaker Chinese demand could weigh on commodity exports, business activity and overall economic growth.
- Financial markets are likely to remain highly sensitive to incoming inflation and employment data. With the cash rate already at 4.35%, markets will closely assess whether the RBA is approaching the end of its tightening cycle or whether another increase could become necessary. A sustained decline in underlying inflation and weaker domestic demand would strengthen expectations for eventual rate cuts, while persistent services inflation, strong wages or renewed energy-price pressures could keep the possibility of another hike alive.
- The next meeting is on 28 to 29 September 2026.
Next 24 Hours Bias
Medium Bearish
The Kiwi Dollar (NZD)
Key news events today
No major news event
What can we expect from NZD today?
New Zealand Dollar — Friday, 25 September 2026
The New Zealand dollar (NZD) remains under pressure, with NZD/USD around 0.5655–0.5670, as broad U.S. dollar strength and elevated Treasury yields weigh on the Kiwi. The NZD has nevertheless received some support from increasingly hawkish expectations for the Reserve Bank of New Zealand (RBNZ): markets are now pricing roughly an 87% probability of another 25bp rate hike in October, up sharply from about 20% earlier this month. The RBNZ raised its Official Cash Rate to 2.75% on September 2, citing elevated inflation of 4.1% in Q2, largely driven by higher fuel prices, while indicating that further tightening could be required depending on incoming data.
Central Bank Notes:
- The Reserve Bank of New Zealand (RBNZ) raised the Official Cash Rate (OCR) by 25 basis points to 2.75% at its 2 September 2026 Monetary Policy Statement meeting. The decision was reached by consensus, marking another step in the Bank’s tightening cycle as policymakers seek to bring inflation sustainably back toward the 2% midpoint.
- Inflation remains the key reason behind the RBNZ’s tightening stance. Annual consumer inflation increased to 4.1% in the June 2026 quarter, driven largely by higher fuel prices associated with the Middle East conflict. The RBNZ expects inflation to remain above 3% for the remainder of 2026 before returning to the 1–3% target range next year and moving toward the 2% midpoint.
- Energy prices and geopolitical developments remain an important upside risk to inflation. Higher petrol and diesel prices have increased transportation and production costs, feeding into prices for goods and services such as food and air travel. The RBNZ remains concerned that renewed increases in energy prices could make inflation more persistent than currently expected.
- The RBNZ indicated that further OCR increases may still be required this year, but policy is not on a predetermined path. Future decisions will depend on the balance of risks to medium-term inflation, including inflation expectations, domestic price pressures, economic activity and the response of households and businesses to tighter financial conditions.
- New Zealand’s economic recovery appears to have resumed, although growth remains uneven. Economic activity was lacklustre during the June quarter as higher fuel costs reduced household purchasing power. However, stronger export prices and resilient demand from trading partners are supporting income growth and investment, particularly in export-oriented sectors.
- Household demand and the housing market remain areas of weakness. Weak income growth, job insecurity and relatively flat house prices continue to weigh on household spending and residential investment, particularly in Auckland and Wellington. The RBNZ nevertheless expects the recovery to strengthen gradually as inflation declines and purchasing power improves.
- The labour market remains relatively soft, but the Bank expects conditions to improve as economic activity strengthens. High unemployment and subdued household demand remain concerns, but stronger economic growth should gradually encourage businesses to increase hiring. This creates a delicate balance for the RBNZ between containing inflation and avoiding unnecessary weakness in employment and output.
- The RBNZ continues to see strong export performance as an important support for the economy. New Zealand’s agricultural and other export sectors are benefiting from resilient global demand and strong commodity prices, helping offset weakness in domestic consumption and residential investment.
- The next meeting is on 28 October 2026.
Next 24 Hours Bias
Medium Bearish
The Japanese Yen (JPY)
Key news events today
No major news event
What can we expect from JPY today?
USD/JPY remains sensitive to U.S. Treasury yields, Fed commentary, Japanese intervention warnings, and further BOJ-rate expectations. With USD/JPY approaching the 159–160 psychological area, intervention headlines could produce sharp two-way volatility. Oil and Middle East developments are also relevant because higher energy prices can add to Japan’s import costs and influence the yen.
Central Bank Notes:
- The BOJ raised its policy rate by 25 basis points to 1.25% at its September 17–18 meeting, the highest level in 31 years. The decision passed 7–2.
- The BOJ said underlying inflation remains firm and is increasingly consistent with its 2% price-stability target, supported by wage growth and services prices.
- Further rate hikes remain possible, but the BOJ will continue to assess wage growth, inflation, economic activity and financial-market conditions before making additional adjustments.
- The Bank continues its gradual reduction of Japanese Government Bond purchases, while retaining flexibility to respond if market volatility becomes excessive.
- Japan’s economy continues to expand moderately, supported by domestic demand and business investment, although global trade uncertainty, geopolitical risks and higher energy costs remain important risks.
- Yen weakness remains a key concern, as depreciation can increase imported inflation. The BOJ is closely monitoring exchange-rate movements and their impact on prices and financial conditions.
- Governor Kazuo Ueda signalled that the September hike reflects growing confidence that inflation is becoming more sustainable, while the two dissenting members preferred to wait before tightening further.
- Looking ahead: The BOJ remains on a gradual normalization path. Future hikes will depend mainly on inflation, wages, domestic demand and financial conditions rather than a fixed timetable.
- The next meeting is on 29 to 30 October 2026.
Next 24 Hours Bias
Medium Bearish
Oil
Key news events today
No major news event
What can we expect from Oil today?
Oil remains highly headline-sensitive heading into Friday. Brent crude rebounded above $104 per barrel on Thursday, while WTI traded around the low-$90s, after renewed uncertainty over the U.S.–Iran conflict and limited progress in diplomatic talks revived concerns about Middle East supply disruptions. At the same time, the EIA reported a larger-than-expected 2.97 million-barrel increase in U.S. crude inventories for the week ended September 18, which is a bearish factor for prices, while gasoline and distillate inventories declined.
Next 24 Hours Bias
Strong Bullish
Risk Warning: Trading in securities involves significant risk. Prices may fluctuate and securities can become entirely valueless. You may incur losses that exceed your potential profits, and in some cases, losses may exceed the amount you have deposited. Securities, futures, options, and contracts for differences are complex financial instruments and are not suitable for all investors. Engaging in such transactions requires a sound understanding of the associated risks. Please read and ensure you fully understand our Risk Disclosure.
Our leverage is dynamic and may change at any time. Such changes may affect your positions and margin requirements. You are responsible for monitoring your positions and maintaining sufficient margin at all times