US stock indices rally after in-line CPI data and a less dovish ECB. Asia Pacific equities surge to fresh highs. The US dollar continues its bearish trend.
Dow Jones bullish breakout towards a fresh record high, US dollar at tipping point, Gold’s bullish momentum revived
On Thursday, 12 September, the US stock market roared back in bullish unison. All four major benchmark US stock indices closed in the green, outperforming the prior laggards, the Dow Jones Industrial Average and the small caps Russell 2000.
The Dow Jones broke out of its four-week consolidation, climbing 1.4% to notch a fresh all-time high. Meanwhile, the Russell 2000 surged 1.8%, bringing it within 1.5% of its record peak of 2,459 set in November 2021.
The tech-heavy S&P 500 and Nasdaq 100 increased by 0.9% and 0.6%, respectively, to hit fresh record highs. The current bullish trend seen in the US stock indices has been reinforced by the latest US core CPI inflation data, which came in within expectations and the same growth rate as last month (August: 3.1% y/y, consensus: 3.1% y/y, July: 3.1% y/y), which kept the Fed dovish pivot narrative alive
The European Central Bank (ECB) kept its key deposit facility rate unchanged at 2% for the second consecutive monetary policy meeting as expected. In her press conference, ECB President Lagarde has signalled that the ECB’s interest rate cut cycle is likely over, saying the bank remains in a "good place" and that risks to the economy have become more balanced.
A less dovish ECB, coupled with another set of weak US initial jobless claims data for the period ending 5 September, reinforced the ongoing medium-term US dollar bearish trend since 1 August 2025. The US Dollar Index recorded an intraday loss of -0.3% to close Wednesday’s US session at 97.50, just a whisker above the key long-term support of 97.30.
In today’s Asia session, the US Dollar Index is trading almost unchanged ahead of the key University of Michigan’s US consumer sentiment data, which will be released later today. Minor outperformance is seen in the EUR (0.1%) and AUD (0.06%) among the major currencies against the greenback at the time of writing.
After two days of a -1.6% pullback seen on Gold (XAU/USD) from its current all-time intraday high of US$3,675 printed on Tuesday, 5 September 2025, it has started to show signs of bullish momentum revival above the US$3,600 key short-term support. It recorded an intraday rally of 0.5% today to trade at US$3,653 at the time of writing.
Asia Pacific equities are set to finish the week on a strong note as Fed rate cut expectations for 2026 gain momentum. Japan’s Nikkei 225 rose 0.9%, marking its third straight advance and another record high at 44,768. Hong Kong’s Hang Seng Index climbed 1.1% to a four-year peak, putting it up 3.8% for the week and on track for its best weekly performance since March.
Our YouTube video above contains more insights and the latest intraday technical analysis on our Chart of the Day, AUD/USD.
