• Gold’s upward momentum has weakened as investors take profits ahead of Fed Chair Kevin Warsh’s speech at Jackson Hole.
• Lower Treasury yields and a weaker US dollar have supported gold by reducing the opportunity cost of holding the non-yielding metal.
• A neutral or dovish message from Warsh could reduce expectations of a September rate hike and support another move higher.
• A hawkish warning about easier financial conditions could lift yields and the dollar, triggering a deeper correction in gold.
• Technically, the uptrend remains intact, with resistance at USD 4,775 and the April high near USD 4,890 per ounce.

Gold’s upward momentum is weakening ahead of Federal Reserve Chair Kevin Warsh’s speech at the Jackson Hole symposium. The recent stabilisation in prices appears to reflect profit-taking after the previous rally, as well as growing caution before an event that could materially reshape expectations for US monetary policy.

The key issue is the recent easing in financial conditions. The US Treasury’s announcement that it will increase buybacks of longer-dated government bonds, together with verbal intervention from Treasury Secretary Scott Bessent, contributed to a decline in yields. Although the operations were officially presented as measures intended to improve market liquidity, investors also interpreted them as an attempt to contain the US government’s borrowing costs.

Lower bond yields are generally positive for gold because the metal does not generate interest income. A decline in Treasury yields, particularly in real terms, reduces the opportunity cost of holding bullion. If this is accompanied by a weaker US dollar, gold also becomes more affordable for investors using other currencies.

The most important question is whether Warsh will push back against the recent easing in financial conditions. If the Fed Chair does not express concern about falling yields and effectively leaves the initiative with the Treasury, investors could scale back expectations of an imminent interest-rate increase. Such a scenario would support another leg higher in gold.

The alternative scenario would be a more hawkish speech. Warsh could argue that persistently easier financial conditions make it more difficult to bring inflation back towards the Fed’s target. He may also signal that the central bank is prepared to react if lower yields, rising asset prices and easier access to financing generate renewed demand-side inflationary pressure.

Such remarks could be interpreted as a warning that the September Federal Reserve meeting may take a more hawkish turn. A rise in expectations of a rate increase would probably push Treasury yields higher and strengthen the dollar, putting downward pressure on gold.

The situation is particularly important because US inflation remains persistent. The core PCE price index rose by 3.3% year-on-year in July, remaining clearly above the Fed’s 2% target. At the same time, the Treasury’s efforts to lower long-term yields may partially offset the restrictive effects of monetary policy.

Gold broke above a descending trend line in July, providing an early signal that the previous corrective phase was losing momentum. Two strong bullish impulses followed in August, lifting the price towards USD 4,700 per ounce.

The market is now undergoing a technical correction after two consecutive sessions of declines. However, the pullback remains relatively shallow and there are still no convincing signs that the latest phase of the uptrend has ended.

The nearest resistance is located around USD 4,775 per ounce, corresponding to the highs recorded in May 2026. Above that level, the main target for buyers remains the April peak near USD 4,890. A decisive break above USD 4,890 would confirm the continuation of the broader uptrend and could open the way towards USD 5,400 per ounce. Such an extensive move would, however, probably require a pronounced depreciation of the US dollar.

In the short term, gold’s direction will depend primarily on Warsh’s assessment of the recent easing in financial conditions. A lack of opposition from the Fed Chair could allow the market to retest USD 4,775 and subsequently USD 4,890 per ounce.

Conversely, a hawkish signal accompanied by a higher perceived probability of a September rate increase could encourage profit-taking and initiate a deeper correction. Warsh’s speech may therefore determine whether the current pullback remains a temporary pause within the uptrend or develops into a more substantial reversal.

Opinions are the authors'; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. The provided publication is for informational and educational purposes only.
If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please refer to the MarketPulse Terms of Use.
Visit https://www.marketpulse.com/ to find out more about the beat of the global markets.
© 2026 OANDA Business Information & Services Inc.

• AI demand faces its biggest test: NVIDIA must show Data Centre growth is still accelerating enough to justify a US$5.2 trillion valuation.
• Q3 guidance matters most: A strong guide above current expectations would support the AI trade, while cautious guidance could trigger broader de-risking.
• 216.40 is the key breakout: A move above it may revive the medium-term uptrend, while a daily close below 195.95 would invalidate the bullish setup.

Ahead of today’s NVIDIA Q2 FY2027 earnings, the setup is clear: the stock is no longer just trading on “Artificial Intelligence (AI) demand is strong”. It is trading on whether AI infrastructure demand is still accelerating fast enough to justify a US$5 trillion-plus market cap, elevated expectations, and the broader AI equity trade.

In the past week, the share price of NVDIA recorded seven consecutive sessions of daily losses from 14 August 2026 to 24 Aug 2026, slipping 7.7% in total, marking its longest and worst downward run since September 2022, before rebounding by 2.2% on Tuesday, 25 August 2026 (see Fig. 1).

NVIDIA reports after the US close on Wednesday, 26 August 2026. Consensus is clustered around US$92 billion in revenue and roughly US$2.08–US$2.09 in adjusted Earnings Per Share (EPS), while NVIDIA’s own Q2 guide is US$91 billion in revenue, plus or minus 2%, with non-GAAP gross margin near 75%.

Here are the five key fundamental factors to focus on.

The main focus is still on Data centre revenue, with consensus pointing to around US$85.7 billion, more than double a year ago. This is the cleanest read-through for hyperscaler AI capex, sovereign AI projects, enterprise AI adoption, and accelerated computing demand.

Share price impact: A strong Data Centre beat would reinforce the view that AI demand remains supply-constrained and likely support a post-earnings rally. A miss, or signs of moderating growth, would raise concerns about “peak AI capex” and could pressure not only NVIDIA but also the wider semiconductor complex.

Traders will watch closely for updates on Blackwell shipments, B-series revenue, Rubin timing and supply availability. S&P Global notes that B-series revenue expectations are highly dispersed, with estimates ranging from US$6.3 billion to US$76.3 billion for Q2, underscoring how uncertain the market remains about the ramp profile. Rubin is also expected to begin contributing this year.

Share price impact: Clear Blackwell execution and confident commentary from Rubin would keep the “next product cycle” narrative intact. Any delay, supply bottleneck, or vague ramp language would be bearish, as NVIDIA’s premium multiple depends on sustained product-cycle leadership.

NVIDIA guided for 74.9% GAAP gross margin and 75.0% non-GAAP gross margin, plus or minus 50 basis points. The market will focus on whether rising HBM memory costs, advanced packaging, and supply chain costs are starting to erode profitability.

Share price impact: Margins holding near 75% would confirm NVIDIA still has strong pricing power. A margin miss would be a bigger problem than usual because investors are already questioning whether AI hardware economics can remain this exceptional at scale.

The reported quarter matters, but Q3 guidance matters more. Wall Street is looking for evidence that the AI spending cycle remains strong into the next quarter, with some previews suggesting Q3 revenue expectations could move above US$108 billion if management delivers another beat-and-raise setup.

Share price impact: A strong Q3 guide would be the cleanest bullish catalyst. In-line guidance may not be enough after the recent rebound, while cautious guidance would trigger a sharper de-risking move because NVIDIA is the bellwether for AI earnings momentum.

NVIDIA’s earnings are now a market-wide stress test for AI capex. Reuters notes that traders are focused on revenue, chip demand, margins and cloud-sector capital spending, with the stock’s earnings move expected to swing around US$280 billion in market value, which translates to an expected price move of around 5.4% in either direction based on NVIDIA’s market capitalisation of roughly US$5.2 trillion.

Share price impact: Strong commentary from hyperscalers and enterprise customers would support the broader AI trade. But if NVIDIA management hints at slower cloud orders, slower customer adoption, energy constraints, or funding stress, the market may rotate away from AI infrastructure winners.

Let’s now unpack the technicals of NVIDIA on a medium-term (multi-week) time horizon.

The recent 9.1% decline (high to low) seen in the price actions of NVIDIA (NVDA) from 17 August 2026 has managed to stall on Monday, 24 August 2026 and staged a rebound as well as formed a “Bullish Harami” candlestick pattern on Tuesday, 25 August 2026, after a retest on its 50-day moving average, acting as a key intermediate support at 208.00 (see Fig. 2).

In addition, the volatility-adjusted relative strength (VARS) of the NVDA/SPY ratio has begun trending upwards since 18 August 2026, with its latest print as of Tuesday, 25 August 2026, breaching above its centreline, indicating potential outperformance of NVIDIA over the benchmark S&P 500.

These positive technical elements support an increasing likelihood of a medium-term recovery in NVDA.

A bullish breakout above 216.40 may signal the start of a new medium-term bullish impulsive up-move sequence towards the all-time high zone of 227.40/236.54 before potentially setting sights on the next medium-term resistances at 234.10 and 259.70/260.20 (Fibonacci extension clusters).

On the other hand, a break and a daily close below the key medium-term pivotal support at 195.95 would invalidate the bullish reversal scenario, exposing a deeper corrective decline toward the next medium-term supports at 179.95 and 164.55.

Opinions are the authors'; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. The provided publication is for informational and educational purposes only.
If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please refer to the MarketPulse Terms of Use.
Visit https://www.marketpulse.com/ to find out more about the beat of the global markets.
© 2026 OANDA Business Information & Services Inc.

• PCE release focus: The Bureau of Economic Analysis will release the July PCE price index report on Wednesday, August 26, which will serve as a critical signal for Federal Reserve monetary policy.
• Inflation expectations: Consensus estimates call for headline PCE inflation to moderate slightly to 3.6% YoY, while core PCE is projected to hold steady at 3.3% YoY.
• Broader economic data: The PCE release will be accompanied by key household financial metrics, including Personal Income, Disposable Personal Income (DPI), Personal Spending (Outlays), and the Personal Savings Rate.
• Technical outlook (EUR/USD): Following FOMC minutes, EUR/USD broke above its complex head-and-shoulders neckline and key pivot levels toward 1.1710, with immediate resistance ahead at 1.1737 (weekly R1) while oscillators indicate overbought conditions.

The upcoming personal consumption expenditures (PCE) price index report—scheduled for release by the Bureau of Economic Analysis on Wednesday, August 26—serves as a pivotal indicator for investors evaluating the Federal Reserve’s next policy moves, particularly because PCE (specifically Core PCE) is the Fed’s preferred measure of inflation to guide monetary policy. Consensus estimates project July headline PCE inflation to tick down slightly to 3.6% year-over-year while core PCE is anticipated to hold steady at 3.3%, making this print highly scrutinized for signals on whether underlying price pressures are abating or remaining stubbornly elevated.

The upcoming PCE report carries heightened significance, coming on the heels of recent FOMC meeting minutes that revealed a 6–3 division among members and landing directly ahead of both the Jackson Hole Symposium and the September FOMC interest rate decision.

The personal consumption expenditures (PCE) price index is a subcomponent of the broader personal income and outlays report, released simultaneously by the U.S. Bureau of Economic Analysis (BEA). When the PCE data drops, it is released alongside several key measures of household financial health:

• Personal income: Total income received by individuals from all sources, including wages, investment returns, and government transfers (such as Social Security).
• Disposable personal income (DPI): Personal income remaining after current tax payments—a key metric for consumer spending power.
• Personal spending (Outlays): Real and nominal figures showing how much consumers spent on goods (durable and nondurable) and services.
• Personal savings rate: Personal savings expressed as a percentage of disposable income, showing how much buffer households are maintaining.

Gain unique insights through live market analysis with OANDA’s market experts

https://www.oanda.com/us-en/skills-and-insights/webinars/

• Following a downside breakout from a medium-term ascending channel in July 2025, EUR/USD entered a broadening wedge structure (highlighted by the blue trendlines). Price action subsequently printed a positive stochastic divergence in June 2026, followed by an exhaustion gap in July, establishing firm structural support above the monthly S1 pivot at 1.1406. A bullish rally lifted the pair toward the 1.1550 handle, where price consolidated under a confluence of resistance from August 1 through August 19th, 2026, then broke higher following the release of the dovish FOMC meeting minutes, as marked on the chart.

• The aforementioned confluence of resistance comprised the inverted complex head-and-shoulders neckline, the monthly pivot point (PP) at 1.1601, the first monthly support (S1) at 1.1589, and the 9-period exponential moving average (EMA9) and the 9-period simple moving average (SMA9). The resistance level has now turned into support; the range is marked by a blue circle.

• The previously discussed inverted complex head-and-shoulders bottoming structure reached completion on August 19. A decisive bullish breakout above the neckline catalyzed upward momentum, pushing price action through key resistance at the weekly PP (1.1650) and the monthly R2 (1.1671), and printing a session high near 1.1710.

• An immediate resistance lies above price action, R1 weekly at 1.1737, followed by R3 monthly R3 1.1795.

• Oscillator metrics reflect extended momentum, with the 14-period Stochastic (14, 1, 3) holding deep in overbought territory at 85.45 and the 14-period Relative Strength Index (RSI 14) trending firmly higher at 73.19.

EMA: Exponential Moving Average

MA: Moving Average

RSI: Relative Strength Index

% K: Fast Stochastic,

%D Slow Stochastic

MACD: Moving Average Convergence Divergence

Pivot Point: PP – Support: S – Resistance: R

Opinions are the authors'; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. The provided publication is for informational and educational purposes only.
If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please refer to the MarketPulse Terms of Use.
Visit https://www.marketpulse.com/ to find out more about the beat of the global markets.
© 2026 OANDA Business Information & Services Inc.

• Canada inflation & BoC stance: July CPI accelerated to 3.0% YoY, pressuring USD/CAD in the short term, but the Bank of Canada maintains a cautious stance as underlying core metrics continue to moderate.
• Australian labor & RBA dilemma: A sharp contraction in employment pushed unemployment to 4.5%, yet sticky core inflation keeps the RBA constrained in a “higher-for-longer” stance at 4.35%.
• FOMC minutes & rate expectations: Despite hawkish July minutes, markets looked past the rhetoric toward cooler data, with FedWatch pricing for September rate targets rebounding into the 60%–70% range by late August.
• Major currency dynamics: Major pairs rallied against the U.S. dollar during the week of August 17–21, led by NZD/USD (+1.57%) and AUD/USD (+1.33%).

For the week of August 17th, 2026, Statistics Canada released the July CPI report, showing headline inflation accelerating to 3.0% YoY—beating forecasts — driven by surging gasoline and travel costs, while underlying core metrics remained relatively subdued. In response, the Canadian dollar strengthened immediately, pushing USD/CAD down roughly 0.2% to 1.3850 on the day.

Despite the headline beat, Bank of Canada (BoC) policymakers maintain a cautious forward stance. The Governing Council is actively balancing near-term inflationary persistence—driven by upticks in the energy and services components—against emerging downside risks to domestic growth, including softer household consumption and elevated debt-servicing costs. While the 3.0% YoY CPI print temporarily suppresses immediate market expectations for aggressive monetary easing, underlying core metrics (CPI-median and CPI-trim) suggest that broader price pressures continue to moderate toward the 2% target band. Consequently, money markets are pricing in a higher probability of a prolonged policy hold, with rate-cut projections shifted further out along the yield curve as central bankers await further confirmation of sustained disinflation before committing to additional policy adjustments.

This week’s Australian labor force data revealed a surprise cooling in the job market, as headline employment declined by 15,800 jobs in July, significantly missing market forecasts and reversing the previous month’s gain of 80,000 jobs. This contraction was driven entirely by a sharp reduction in part-time roles, which pushed the unemployment rate up to 4.5%—its highest level since late 2021—and contributed to a 0.6% drop in total hours worked. Consequently, the Australian dollar (AUD) faced downward pressure following the report, as investors interpreted the data as a sign of a weaker economic environment, leading the market to dial back expectations for further interest rate hikes from the Reserve Bank of Australia.

However, the initial downward pressure on the Australian dollar proved short-lived, as the currency subsequently staged a strong recovery alongside the broader rally against the U.S. dollar later in the week.

The Reserve Bank of Australia (RBA) finds itself navigating a classic monetary policy dilemma—managing a cooling labor market while stickier price pressures persist. With core inflation, trimmed mean, and weighted median elevated at around 3.6% and headline inflation at 3.8%, both remain above the bank’s 2%–3% target band. However, with the unemployment rate creeping up to 4.5% and net job growth turning negative in July, the RBA is constrained from hiking interest rates further without risking a sharper economic downturn. As a result, the RBA is likely to maintain a “higher-for-longer” policy hold at 4.35%.

The release of the July FOMC meeting minutes revealed a distinctly hawkish division among Federal Reserve officials, highlighted by three dissents favoring an immediate 25-basis-point rate hike and strong warnings regarding upside risks to inflation. Despite this hawkish rhetoric, the foreign exchange market reacted with broad, modest U.S. dollar selling as traders largely dismissed the minutes as backward-looking. Investors prioritized subsequent economic data showing cooling inflation and job losses over the Fed’s July sentiments, shifting their focus toward upcoming commentary at the Jackson Hole Symposium for clearer forward-looking guidance.

Gain unique insights through live market analysis with OANDA’s market experts

https://www.oanda.com/us-en/skills-and-insights/webinars/live-market-analysis

The CME FedWatch tool chart shows that after plunging to a multi-month low near 20% in late July, the market-implied probability of a 350–375 bps target rate at the September 16, 2026, meeting rebounded sharply throughout August. The probability climbed back toward the 60%–70% range by August 21st, reflecting shifting interest rate expectations as traders recalibrated the likelihood of a Fed rate cut in response to incoming economic data and central bank communications over the month.

Over the past trading week (August 17–21), major currencies rallied sharply against the U.S. dollar, driven by a broad mid-week greenback sell-off on August 19 as markets looked past hawkish Fed minutes toward cooler U.S. economic data. The New Zealand Dollar (NZD/USD) led gains across the board, extending its advance to +1.57% after recovering aggressively from early-week lows. The Australian Dollar (AUD/USD) followed with a +1.33% gain, while the Euro (EUR/USD) held solid strength at +1.01%. Meanwhile, the Canadian Dollar (CAD/USD) rose +0.82%, supported by earlier domestic inflation strength, and the British Pound (GBP/USD) settled at a +0.80% gain as major pairs maintained their elevated levels heading into the end of the week.

In summary, the week of August 17–21 highlighted diverging monetary policy dynamics and shifting market expectations across major central banks. While Canada’s headline CPI uptick provides short-term support for CAD despite underlying disinflation, Australia’s cooling labor market contrasts with persistent core inflation, keeping the RBA on a cautious hold. Meanwhile, markets largely looked past hawkish FOMC minutes and priced in a higher probability of September Fed rate cuts, driven by softer economic indicators, driving broad gains across major currency pairs relative to the U.S. dollar.

https://www.statcan.gc.ca/en/subjects-start/prices_and_price_indexes/consumer_price_indexes

https://www.bankofcanada.ca/

https://www.asx.com.au/markets/trade-our-derivatives-market/futures-market/rba-rate-tracker

https://www.abs.gov.au/statistics/labour/employment-and-unemployment/labour-force-australia/latest-release

https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

Opinions are the authors'; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. The provided publication is for informational and educational purposes only.
If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please refer to the MarketPulse Terms of Use.
Visit https://www.marketpulse.com/ to find out more about the beat of the global markets.
© 2026 OANDA Business Information & Services Inc.

• US long-term Treasury yields reached their highest levels since 2007.
• Higher oil prices revived concerns about inflation and the Federal Reserve’s policy outlook.
• The Treasury doubled the scale of its long-term bond buyback programme.
• The intervention stabilised bonds but pushed EUR/USD above 1.17.
• Markets may increasingly view a weaker dollar as the price of lower US borrowing costs.

The sharp rise in US Treasury yields and the subsequent response from the Treasury Department were the main market developments of the week. Increasing borrowing costs, higher oil prices and persistent tensions in the Middle East initially intensified risk aversion. Later in the week, attention shifted to Washington’s attempt to stabilise the bond market, which simultaneously put significant pressure on the dollar.

At the beginning of the week, global sovereign bond markets came under heavy selling pressure. The yield on the 30-year US Treasury climbed to 5.32%, its highest level since 2007. The 10-year yield increased to 4.74%. The sell-off also spread to government bonds in Australia, New Zealand and Japan.

Investors were concerned about rising US government spending, record public debt and the substantial supply of long-dated Treasury securities. Another source of risk was the increasing debt of major technology companies financing investment in data centres and artificial intelligence infrastructure.

Higher energy prices added to the pressure on government bonds. Brent crude rose above USD90 per barrel as the prospects of ending the conflict in the Middle East deteriorated. Donald Trump showed no interest in extending the agreement with Iran, while fighting in Lebanon intensified again.

The lack of progress in negotiations increased uncertainty surrounding the reopening of the Strait of Hormuz. Prolonged restrictions on shipping through this crucial route could keep oil prices elevated and intensify global inflationary pressure.

More expensive energy also complicated the Federal Reserve’s policy outlook. Two relatively benign inflation readings and weaker US labour market data had previously reduced expectations of a September rate increase. Persistently high oil prices, however, raised the risk of renewed inflation and strengthened the case for the Fed to maintain a restrictive stance.

In the middle of the week, investors turned their attention to the minutes of the Federal Reserve’s July meeting. Markets were looking for evidence of how close FOMC members had been to raising interest rates and whether such a move remained possible in the coming months.

The importance of the document was limited by economic data published since the meeting. Weaker labour market and inflation figures meant that investors were no longer fully pricing in another rate increase by the end of the year.

The new Fed Chair, Kevin Warsh, also intends to limit communication about future monetary policy decisions and give financial markets greater freedom to interpret economic conditions. The lack of a clear signal from the Fed initially helped stabilise the dollar. This changed after the Treasury Department unexpectedly intervened in the bond market.

Washington announced that it would at least double the scale of its buybacks of less liquid long-term government bonds. The operations will cover so-called off-the-run securities with remaining maturities of at least 10 years.

The programme is officially designed to improve market liquidity and reduce the risk of primary dealers being left with securities that are difficult to trade. Its timing, however, led investors to interpret the decision as an attempt to halt the rise in long-term yields.

Only two days earlier, the 30-year yield had reached its highest level in almost two decades. At the same time, US public debt exceeded USD40 trillion.

The expanded programme is initially scheduled to operate for two months from 9 September. With seven buyback operations planned, the Treasury could purchase around USD28 billion of long-term securities in September and October, compared with the previously planned USD14 billion.

The scale of the programme remains small compared with the Federal Reserve’s previous asset purchases. At the peak of quantitative easing, the Fed bought USD120 billion of securities every month.

Unlike the central bank, the Treasury cannot create new money to finance its purchases. The buybacks will therefore probably have to be funded through increased issuance of Treasury bills and other short-term securities.

The programme resembles Operation Twist from 2011–2012 more closely than conventional quantitative easing. Its direct effect on long-term yields is therefore likely to be limited. The more important signal is that the Treasury appears to have a level of borrowing costs beyond which it is prepared to intervene.

The reaction in the foreign exchange market was decisive. Following the announcement, the dollar lost around 0.8% on a trade-weighted basis, while the Dollar Index fell to its lowest level in three months. EUR/USD climbed above 1.17 for the first time since late May.

The dollar weakened despite continued expectations of further Fed tightening and the prospect of increased short-term Treasury issuance. This suggests that investors are beginning to look beyond interest-rate differentials and pay closer attention to the consistency and credibility of US economic policy.

A clear contradiction is emerging. Kevin Warsh argues that market interest rates should contribute to the fight against inflation. The Treasury, meanwhile, responds when higher long-term yields become too painful for the economy and public finances. Such intervention could weaken the tightening of financial conditions and undermine the credibility of the fight against inflation.

Washington’s actions also suggest that, when faced with a choice between higher debt-servicing costs and a weaker currency, the administration may be willing to accept dollar depreciation. Bond buybacks increase demand at the long end of the yield curve and may reduce the term premium, but they also make dollar-denominated assets less attractive.

The expansion of the buyback programme does not imply an immediate dollar crisis. The currency continues to benefit from high interest rates, the depth and liquidity of US financial markets and capital inflows into the technology sector. Periods of dollar weakness may therefore still be interrupted by significant rebounds.

The past week has nevertheless demonstrated that there are politically acceptable limits to the rise in US Treasury yields. If investors conclude that reducing the cost of servicing the public debt has become more important than protecting the value of the currency, downward pressure on the dollar could become more persistent.

The Japanese yen may be the main beneficiary of such a scenario, particularly if the yield gap between the United States and Japan narrows. Gold, the Swiss franc and the euro also remain potential alternatives to the dollar.

Opinions are the authors'; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. The provided publication is for informational and educational purposes only.
If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please refer to the MarketPulse Terms of Use.
Visit https://www.marketpulse.com/ to find out more about the beat of the global markets.
© 2026 OANDA Business Information & Services Inc.