GBP/USD attracts some sellers on Friday and is pressured by a modest USD strength.

Bets for another oversized Fed rate cut in November should cap gains for the buck.

A relatively hawkish BoE expectations should contribute to limiting losses for the pair.

The GBP/USD pair drifts lower during the Asian session on Friday and moves away from its highest levels since March 2022, around the 1.3435 region touched the previous day. Spot prices slide below the 1.3400 mark in the last hour amid a modest US Dollar (USD) uptick, though any meaningful corrective decline still seems elusive. 

The Greenback attracts some buyers and reverses a part of the previous day's losses amid some repositioning trade ahead of the crucial US inflation data – the Personal Consumption Expenditure (PCE) Price Index due later today. In the meantime, rising bets for a more aggressive policy easing by the Federal Reserve (Fed), along with the upbeat market mood, should cap the upside for the safe-haven buck. 

Despite the fact that several Federal Reserve (Fed) officials this week tried to push back against bets for a more aggressive policy easing, the markets are pricing in a greater chance of another oversized rate cut in November. This overshadowed Thursday's better-than-expected US macro data and should hold back the USD bulls from placing fresh bets, which, in turn, should lend support to the GBP/USD pair. 

Meanwhile, the global risk sentiment remains supported by hopes that interest rate cuts will boost global economic activity. Adding to this, a slew of stimulus measures from the People's Bank of China (PBOC), including Friday's announcement to cut the seven-day repo rate to 1.5% from 1.7% and lower the Reserve Requirement Ratio (RRR) by 50 bps, further boosts investors' appetite for riskier assets.

Furthermore, expectations that the Bank of England's (BoE) rate-cutting cycle is likely to be slower than in the United States (US) should continue to underpin the British Pound (GBP) and contribute to limiting losses for the GBP/USD pair. This makes it prudent to wait for strong follow-through selling before confirming a near-term top for the major, which remains on track to end the week on a positive note.

Source: FXSTREET

The Japanese Yen (JPY) extends its downside for the third successive session following the Tokyo Consumer Price Index (CPI) data released on Friday. The JPY faces challenges as traders expect the BoJ to ponder before further rate hikes.

The Tokyo Consumer Price Index (CPI) increased 2.2% year-over-year in September, down from a 2.6% rise in August. Meanwhile, the CPI excluding fresh food and energy climbed 1.6% YoY in September, unchanged from the previous reading. The CPI excluding fresh food increased 2.0% as expected, compared to the previous rise of 2.4%.

The US Dollar could face pressure following dovish remarks from Federal Reserve officials. Traders are now expected to closely monitor the US Personal Consumption Expenditures (PCE) Price Index data for August, the Fed’s preferred inflation indicator, on Friday for fresh impetus, which is scheduled for release later in the North American session.

Daily Digest Market Movers: Japanese Yen extends losses amid doubts over BoJ policy outlook

According to Reuters, Fed Governor Lisa Cook stated on Thursday that she supported last week's 50 basis points (bps) interest rate cut, citing increased "downside risks" to employment.

US Gross Domestic Product Annualized increased at a rate of 3.0% in the second quarter, as previously estimated, according to the US Bureau of Economic Analysis (BEA) on Thursday. Meanwhile, the GDP Price Index rose 2.5% in the second quarter.

US Initial Jobless Claims for the week ending September 20 were reported at 218K, according to the US Department of Labor (DoL). This figure came in below the initial consensus of 225K and was lower than the previous week's revised number of 222K (previously reported as 219K).

On Thursday, the BoJ Monetary Policy Meeting Minutes expressed the members’ consensus on the importance of remaining vigilant regarding the risks of inflation exceeding targets. Several members indicated that raising rates to 0.25% would be suitable as a way to adjust the level of monetary support. A few others suggested that a moderate adjustment to monetary support would also be appropriate.

Federal Reserve Governor Adriana Kugler said on Wednesday that she “strongly supported” the Fed’s decision to cut the interest rates by a half point last week. Kugler further stated that it will be appropriate to make additional rate cuts if inflation continues to ease as expected, per Bloomberg.

US Consumer Confidence Index fell to 98.7 in September from a revised 105.6 in August. This figure registered the biggest decline since August 2021.

On Tuesday, BoJ Governor Kazuo Ueda indicated that the central bank has time to evaluate market and economic conditions before making any policy adjustments, signaling that there is no urgency to raise interest rates again. Ueda also noted that Japan's real interest rate remains deeply negative, which is helping to stimulate the economy and drive up prices.

Technical Analysis: USD/JPY holds position above 145.00, nine-day EMA

USD/JPY trades around 145.10 on Friday. Analysis of the daily chart shows that the pair is moving upwards within an ascending channel, indicating a bullish bias. Additionally, the 14-day Relative Strength Index (RSI) remains slightly above the 50 level, confirming an emergence of a bullish sentiment.

On the upside, the ongoing bullish bias could lead the USD/JPY pair may explore the region around the upper boundary of the ascending channel at 146.90 level, followed by its five-week high of 147.21 level, which was recorded on September 3.

In terms of support, the USD/JPY pair may test the nine-day Exponential Moving Average (EMA) at the level of 143.89, aligned with the lower boundary of the ascending channel.

USD/JPY: Daily Chart

Source: FXSTREET

In the fast-paced world of content creation, artificial intelligence is reshaping industries and how we communicate.

Yet while AI excels in speed and scale, human insight is still critical for capturing cultural context and linguistic nuance — especially in regions like the Middle East, where dialects and cultural subtleties matter.

This is where STUCK?, a groundbreaking platform created by Asmaa Naga, comes into play, combining the raw power of AI-driven large language models with the nuanced understanding of human experts to create accurate, high-quality content in English and Arabic.

“During COVID, I began to see how my experience in language and my awareness of corporate linguistic needs could help me create a solution to bridge a gap,” Naga, who taught at the British Council in Jeddah for 11 years prior to launching the platform, told Arab News.

Established in 2022, STUCK? employs a group of language models, each specializing in different aspects of language processing.

“One model is designed to handle large contexts, another excels in translation, while another has exceptional proficiency in understanding Arabic,” said Naga.

AI’s ability to quickly analyze massive datasets and generate content has already revolutionized whole sectors. However, there is still a catch. While AI is excellent at processing language, it often lacks the emotional intelligence and cultural depth only humans can provide.

This is especially crucial in regions where subtle differences in dialect, phrasing or cultural references can dramatically change the meaning or tone of a message.

STUCK? was designed with these challenges in mind. The platform combines multiple AI models, each specialized in different areas such as translation or contextual understanding, to offer a comprehensive solution for creating and localizing content.

But what truly sets STUCK? apart is its ability to handle not just Modern Standard Arabic but also regional dialects, including Levantine, Egyptian and those spoken within Saudi Arabia such as Najdi and Hijazi.

AI-generated content in English or any other widely spoken language has become more advanced over the years, but Arabic — especially its regional dialects — presents unique challenges. It has numerous dialects that vary not only by country but even within regions of a single nation.

For instance, the Arabic spoken in Riyadh differs from that spoken in Jeddah, and that is just within Saudi Arabia. This complexity makes it difficult for standard language models to capture differences accurately.

For industries operating in the Middle East, from healthcare and cultural heritage to oil and gas, accurate communication in the correct dialect can be the difference between success and failure.

But despite the technology’s sophistication, the team behind STUCK? recognize that AI alone cannot fully meet the demands of complex content creation. This is why the platform offers three service tiers — fully human, fully AI, and a blended approach that combines the two.

For routine tasks, AI or the blended model offers quick and efficient solutions. But for high-stakes projects that require a more refined touch — such as marketing campaigns or culturally sensitive communications — the human approach ensures the content resonates with the target audience.

“Users generally do not need guidance to make this choice,” said Naga. “They usually know the importance of the content they want to create or translate and the level of customization needed.”

This flexibility makes STUCK? a highly adaptable tool. In the oil and gas sector, for example, where terminology is highly specialized, the platform’s ability to onboard industry-specific language experts ensures accuracy.

Indeed, it is not just about translating words — it is about making sure the content speaks the industry’s language in both the literal and figurative sense.

AI models are continuously trained and fine-tuned to generate content that responds appropriately to user prompts. But the process does not end with AI generation — human editors review the AI-produced content to ensure it aligns with cultural and linguistic standards. 

“We constantly train and fine-tune our AI models to ensure they generate content that is highly responsive to the prompts used,” said Naga.

Source: ARAB

Oil has lost more than 4% in two days despite the development of a rally in stock markets. The most important news for oil is an article in the FT that Saudi Arabia plans to abandon price targeting at $100 per barrel and intends to increase production. This is similar to the events of early 2020 when, after prolonged OPEC+ coordination, Russia and Saudi Arabia decided to join the fight for market share, which we were quickly taking away.

This news is just as important as in 2014 and 2020 when we saw similar course-changing episodes. Even earlier, in 2008, oil also went into freefall mode when it similarly became too plentiful for the economic conditions at the time. In all three cases, the price after the freefall fell into the $30 area.

So why did oil not go straight into freefall upon the release of such news? There are several reasons.

Firstly, this news needs to be confirmed. The freefall in 2020 and 2014 started after the OPEC meetings when the change of targets was announced publicly and officially.

Second, America is replenishing depleted oil reserves, making the process a regular occurrence with the price of a barrel of WTI near $70.

Third, the U.S. economy maintains a strong growth rate and market optimism is fuelled by speculation that China’s stimulus will boost the economy and commodity prices, including oil.

Fourth, America has been very sluggish in ramping up production and has not invested much in developing new wells. This suggests that if the price falls, the supply from the US could start to dwindle quite quickly.

A new drop in the $30 area looks possible, but it is a very pessimistic scenario. Technically, the Brent price is testing support near $70, which was the 2023 low and reversed the price to the upside.

However, the 200-week average, which is now at $82.1, also provided support, and further declines accompanied a dip below it in July.

Testing the area of last year’s lows is the most important frontier. A failure of Brent below $70 could trigger a freefall. But for now, we cannot rule out the possibility of a rebound.

A powerful hurricane was barreling toward Florida on Thursday, with officials warning of “unsurvivable” conditions and a potentially catastrophic storm surge high enough to swamp a two-story house.

Tens of thousands of people were without power and roads were already flooded ahead of what is expected to be one of the largest Gulf of Mexico storms in decades.

Fast-moving Helene strengthened to an “extremely dangerous” Category 4 hurricane Thursday evening, ahead of landfall expected around 11pm (0300 GMT), the US National Hurricane Center (NHC) said.

It was packing winds of 130 miles (215 kilometers) per hour as it churned over the Gulf’s warm waters toward the Big Bend area south of Florida’s capital city Tallahassee.

“EVERYONE along the Florida Big Bend coast is at risk of potentially catastrophic storm surge,” the NHC said on social media.

Tampa and Tallahassee airports have closed, with parts of St. Petersburg, downtown Tampa, Sarasota, Treasure Island and other cities on Florida’s west coast already flooded.

About 125,000 homes and businesses were without power.

“We’re expecting to see a storm surge inundation of 15 to 20 feet above ground level,” NHC director Mike Brennan said. “That’s up to the top of a second story building. Again, a really unsurvivable scenario is going to play out here in this portion of the Florida coastline.”

The accompanying waves “can destroy houses, move cars, and that water level is going to rise very quickly,” Brennan added.

In Alligator Point, a coastal town on a picturesque peninsula in the storm’s path, David Wesolowski was taking no chances.

“I just came to button up a few things before it gets too windy,” the 37-year-old real estate agent told AFP as he boarded up his house on stilts.

“If it stays on course, this is going to look different afterwards, that’s for sure,” he said, before taking his family to higher ground in Tallahassee.

Meanwhile, Patrick Riickert refused to budge from his small wooden house in Crawfordville, a town of 5,000 people a few miles inland.

As in Alligator Point, most residents have bolted and it looked like a ghost town, but Riickert, his wife and five grandchildren were “not going anywhere,” the 58-year-old insisted.

“I am going to hunker down” and ride out the hurricane, as he did in 2018 when deadly Hurricane Michael, a Category 5 megastorm, blew through the Florida panhandle.

The NHC warned of up to 20 inches (51 cm) of rain in some spots, and potentially life-threatening flooding as well as numerous landslides across the southern Appalachians.

The National Weather Service said the region could be hit extremely hard, with floods not seen in more than a century.

“This will be one of the most significant weather events to happen in the western portions of the area in the modern era,” it warned.

Tornado warnings went out across northern Florida, Georgia and the Carolinas.

Georgia’s sprawling capital Atlanta was forecast to experience tropical storm-force winds and flash flooding from up to 12 inches of rain.

And Tennessee — more than 300 miles from the Gulf Coast — braced for tropical storm conditions statewide.

More than 55 million Americans were under some form of weather alert or warning from Hurricane Helene.

“This is going to be a multi-state event with the potential for significant impacts from Florida all the way to Tennessee,” Federal Emergency Management Agency administrator Deanne Criswell told reporters.

Vice President Kamala Harris said the White House was watching.

“The President and I, of course, are monitoring the case and the situation closely, and we urge everyone who is watching at this very moment to take this storm very seriously,” she told reporters.

Florida Governor Ron DeSantis mobilized the National Guard and ordered thousands of personnel to ready for search-and-rescue operations.

He warned that the powerful storm would be dangerous, and urged everyone to take precautions.

“We can’t control how strong this hurricane is going to get. We can’t control the track of the hurricane, but what you can control is what you can do to put yourself in the best chance to be able to ride this out in a way that’s going to be safe.”

Helene could become the most powerful hurricane to hit the United States in over a year — and almost certainly the biggest.

Hurricane specialist Michael Lowry called Helene “extreme,” noting its tropical storm winds of 39 mph or higher stretched nearly 500 miles across.

Researchers say climate change likely plays a role in the rapid intensification of hurricanes, because there is more energy in warmer oceans for them to feed on.

Source: ARAB

The Commerce Department on Sept 26 released updated estimates of gross domestic product over the past five years, part of a long-standing annual process to incorporate data that isn’t available in time for the agency’s quarterly releases.

The new estimates show that GDP, adjusted for inflation, grew faster in 2021, 2022 and early 2023 than initially believed. The revisions are relatively small in most quarters, but they suggest that the rebound from the pandemic – already among the fastest recoveries on record – was stronger and more consistent than earlier data showed.

Perhaps most notably, the government now says GDP grew slightly in the second quarter of 2022, rather than contracting as previously believed. As a result, government statistics no longer show the US economy as experiencing two consecutive quarters of declining GDP in early 2022 – a common definition of a recession, though not the one used in the United States. (The revised data still shows that GDP declined in the first quarter of 2022, but more modestly than previously reported.)

The official arbiter of recession in the United States is the National Bureau of Economic Research, a non-profit research organisation made up of academic economists. The group defines a recession as “a significant decline in economic activity that is spread across the economy and lasts more than a few months,” and it bases its decisions on a variety of indicators including employment, income and spending.

Few economists in 2022 believed that the US economy met the requirements for a recession. But many feared it was headed for one because of the Federal Reserve’s aggressive efforts to bring down inflation with high interest rates. Instead, growth quickly resumed and has remained surprisingly resilient.

More recently, however, slowing job growth and rising unemployment have led some forecasters, including at the Fed, to worry that resilience might be fading. The revisions on Sept 26 showed that growth was somewhat weaker in late 2023 than had initially been reported, but was slightly stronger early this year.

The government’s estimate of the growth rate of GDP in the second quarter of 2024 was unchanged at 3 per cent. Consumer spending grew slightly more slowly than previously reported, but business investment was revised upward.

The reliability of US economic data has been under increasing scrutiny recently, particularly after an unusually large downward revision last month to estimates of job growth in 2023 and early 2024.

The GDP updates, however, were not large by historical standards, and were in the opposite direction from the jobs revisions. And the new figures more closely align with other data from the period that suggested the economy was on firm footing.

The new data also help resolve what had been a bit of an economic mystery. Gross domestic income – an alternative measure of growth based on income rather than spending – had appeared to be significantly weaker than gross domestic product in recent quarters. That was perplexing because the two measures should, in theory, be identical.

The revisions on Sept 26 narrowed the gap, though they didn’t eliminate it. The government now says gross domestic income increased 2.9 per cent from the end of 2022 to the end of 2023, compared with 3.2 per cent growth in GDP during the same period. (Both figures are adjusted for inflation. 

Source: Straitstimes