Commerzbank highlights that South Korea’s export boom and a large trade surplus, combined with a hawkish Bank of Korea, are supportive for the Korean Won. They argue that changing FX flow dynamics should allow more of the surplus to translate into KRW strength.

The Federal Reserve released its Beige Book, in which the US central bank revealed that economic activity increased modestly since early July, while overall employment rose slightly. Regarding inflation, prices rose in eight districts.

MUFG’s Lloyd Chan remains cautious on the Indonesian Rupiah as domestic inflation accelerates and Gross Domestic Product (GDP) growth stays above 5%. The trade balance has improved slightly but remains weaker than 2025 averages due to higher Oil and gas imports.

OCBC’s Sim Moh Siong and Christopher Wong note that USD/SGD is rebounding alongside a stronger US Dollar (USD), supported by higher US Treasury yields and firmer Fed hike expectations.

Scotiabank strategists Shaun Osborne and Eric Theoret describe GBP/USD as soft but mid-pack within the G10, with domestic data and Bank of England (BoE) events limited ahead of Governor Bailey’s speech.

Russia Unemployment Rate rose from previous 2.2% to 2.3% in July

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ING’s Carsten Brzeski expects the European Central Bank (ECB) to raise rates by 25bp next week, characterizing it as an ‘insurance’ or dovish hike. He notes Eurozone resilience, but stresses that inflation is mainly driven by energy, limiting the case for further tightening.

TD Securities’ Prashant Newnaha now expects the Reserve Bank of Australia (RBA) to raise the cash rate by 25bps to 4.60% at the late-September meeting. The change follows stronger-than-expected Q2 Gross Domestic Product (GDP) and firm discretionary consumption.

OCBC’s Sim Moh Siong and Christopher Wong highlight that higher Oil prices and renewed US-Iran tensions have pushed global bond yields higher and strengthened the US Dollar, with markets fully pricing a 25bp Federal Reserve (Fed) rate hike by October.

In an interview with CNBC on Wednesday, New York Federal Reserve (Fed) Bank President John Williams said that tariffs and the Middle East war are big drivers of inflation over target, per Reuters.

TD Securities strategists argue that Federal Reserve (Fed) decisions in election years remain driven by data rather than politics, with only a small difference in action frequencies versus non-election years.

United States (US) Commerce Secretary Howard Lutnick said during the European trading session on Wednesday that there will be a tariff relief if the company builds in the US.

India’s macroeconomic outlook has strengthened following a sharp Q1-FY27 Gross Domestic Product (GDP) print of 7.8%, prompting financial institutions to upgrade both medium-term growth projections and interest rate expectations.

Commerzbank’s Antje Praefcke notes that markets are fully pricing an European Central Bank (ECB) rate hike next week after Euro Area inflation rose to 3.3%, but she doubts further tightening beyond September as projections show inflation declining into 2027.

EUR/CAD gains ground for the second successive day, trading around 1.6120 during the European hours on Wednesday. The currency cross gains ground as the commodity-linked Canadian Dollar (CAD) faces pressure from declining oil prices.

ING’s Chris Turner notes the Dollar is holding gains after Kevin Warsh’s hawkish comments and a renewed spike in energy prices, with markets now expecting a Federal Reserve rate hike in September.

USD/IDR extends its gains for the second successive day, trading around 17,810 during the European hours on Wednesday.

Societe Generale’s Kunal Kundu now expects the RBI to deliver three 25bp rate hikes, taking the repo rate from 5.25% to 6.00% by early 2027, versus two hikes previously.

Here is what you need to know on Wednesday, September 2:

Deutsche Bank’s Jim Reid notes that rising nominal and real yields pressured global equities, with US and European stocks falling and losses extending across Asia. US technology shares underperformed, while European declines were more moderate.

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ING analysts Warren Patterson and Ewa Manthey note Brent has pushed back above $95/bbl as escalating Persian Gulf tensions revive supply risk and a geopolitical premium.

Antje Praefcke at Commerzbank highlights that markets now price nearly a 70% chance of a September Fed hike after Chair Kevin Warsh’s hawkish speech, but stresses upcoming US inflation data will be decisive.

Danske Research Team notes that EUR/USD slipped below 1.1600 as the US Dollar strengthened on a hawkish Federal Reserve stance and geopolitical tensions. The team highlights that Euro area inflation has moved back above 3%, reinforcing expectations for a September ECB rate hike.

The European Central Bank (ECB) Governing Council member Joachim Nagel said on Wednesday that markets see over 95% chance of a September rate hike.

Bank of Japan (BoJ) board member Hajime Takata said on Wednesday that the central bank needs a different response from conventional semi-annual rate hike pace. 

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is gaining ground for the second successive day and trading around 99.70 during the Asian hours on Wednesday.

AUD/USD inches higher after recovering its daily losses, trading around 0.7150 during the Asian hours on Wednesday.

Bank of Japan (BoJ) board member Hajime Takata said on Wednesday that the central bank must conduct rate hikes nimbly after assessing accommodation in domestic financial conditions and developments.