The US dollar currency is anticipated to begin recovering later this year and into 2026 as a lot of negatives are currently priced in the greenback, Valentin Marinov, head of G10 FX research and strategy at Credit Agricole told Bloomberg.
From dollar weakness to emerging borrowers steering away from the dollar and a sharp rise in gold, here we detail all the key market news and drivers for traders to watch out for this September.
Currency: Dollar weakens
On 1 September, the dollar hit a 5-week low and dropped to its lowest level since late July as markets turn their attention to the upcoming U.S. labour market data, which may influence the Federal Reserve’s policy outlook.
The dollar weakness sets the stage for heightened volatility, especially if the upcoming jobs data come in softer than expected which could increase expectations for a Fed rate cut and push the greenback lower.
Emerging borrowers steer away from the US currency dollar
Another interesting trend reported by the Financial Times, is the turn away from the dollar. Several developing countries like Kenya, Sri Lanka, Panama, and Colombia are moving away from dollar-denominated debt and towards cheaper alternatives such as the Chinese renminbi and Swiss franc.
Kenya & Sri Lanka are converting existing infrastructure loans into renminbi to save money as China has lower interest rates than the US, utilising China’s Belt & Road ties. China’s Belt and Road Initiative (BRI) is a plan to develop two new trade routes connecting China with the rest of the world.
The initiative will seek to develop an extended, interdependent market for China, grow China’s economic and political power, and create the right conditions for China to build a high technology economy.
China is Kenya’s biggest bilateral lender, and the country took on the debt to create one of the largest infrastructure projects to date, a $5 billion high-speed railway.
In a similar fashion, Panama secured CHF loans worth $2.4 billion, cutting $200 million in costs. Colombia is also evaluating refinancing of dollar and peso bonds.
This change may offer short-term cost relief but comes with added hedging and currency risk. It demonstrates how such currency strategies are now actively used in national finance management.
Tariff tensions weaken the Rupee
In Asia, the Indian rupee fell to an all-time low against the dollar, dragged down by fresh concerns over U.S. tariffs on Indian exports.
More recently, importer demand briefly took the rupee higher, but the session ended with modest gains—trading around ₹88.16 to the dollar.
For traders, this volatility highlights how geopolitics and macro policy decisions can have a big impact on currencies.
Renminbi rally
In contrast to the rupee, China’s renminbi is strengthening, trading at its highest level against the dollar since Donald Trump’s election win in 2020.
The trend indicates managed appreciation and reflects Beijing’s growing confidence in the RMB as more central banks and sovereign borrowers change funding strategies.
Sterling & Yen tumble on fiscal worries
Meanwhile, the Japanese yen and British pound are both on the back foot. Rising investor worry about public finances, particularly in the UK, has seen more forceful drops against the dollar.
These changes could lead to bigger repricing in developed-market currencies and create short opportunities on GBP/USD and JPY crosses.
Currency traders flock to safe-haven gold
Uncertainty and fear have turned investors towards the safe-haven gold. Gold prices rallied above USD 3,500/oz, all-time highs, as U.S. rate cut bets and policy uncertainty intensify. Silver also surged above USD 40/oz—levels last seen in 2011.
The metal’s surge to record highs was driven by continued weakness in the greenback, worries about the Fed’s independence and increased geopolitical risks.
The uncertainty surrounding global trade policy, especially Trump’s tariffs, has also supported the demand for gold as a hedge against economic and political instability.
In an environment where there are obvious growth risks and the potential of monetary easing, investors are expected to continue to favour bullion.
The renewed geopolitical risks stemming from Russia’s attack on Ukraine and the Israel-Hamas conflict offer additional support to the safe-haven gold.
For traders, this is a two-fold opportunity: go long on precious metals as a hedge and watch for new flows into gold-backed products on further currency volatility.
Why is this important to traders?
시장 변동성
The weakening dollar, sterling and yen, as well as rupee volatility have created wide spreads and regular pullbacks which are a perfect terrain for scalping, algorithmic trades and opportunistic positioning.
Carry trades & alternative pegs
Those nations transitioning into yen, CHF, or CNY may pave the way for fresh carry trades. Hedged positions against FX risk need to be watched by traders while establishing cross-currency plays.
Macro & geopolitics influence FX
Tariff news, Fed expectations, and changes in sovereign debt strategy are dictating FX direction. Traders must monitor labour data, sovereign issuance calendars, and central bank comments closely.
Hedging costs drift away from Taiwan
According to Bloomberg, Taiwan insurers are enjoying declining hedging costs, thanks to the weak TWD and resurgent carry trades.
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Disclaimer: This material is for general informational and educational purposes only and should not be considered investment advice or an investment recommendation. T4Trade is not responsible for any data provided by third parties referenced or hyperlinked in this communication.
