CFD Markets Analysis: News and forecasts for 11 March 2025

23:59

Ukraine agrees to 30-day ceasefire if Russia accepts

Ukrainian President Volodymyr Zelensky said late Tuesday that Ukraine agreed to a 30-day ceasefire proposed by the United States if Russia accepts the plan, following critical peace talks between US and Ukrainian officials in Saudi Arabia, per CNN.

As part of the deal, the US immediately ended its suspension on sharing intelligence with Ukraine and will resume security assistance to the country, which was invaded by Russia more than three years ago.

Market reaction

At the time of writing, the Gold price (XAU/USD) is trading 0.04% higher on the day to trade at $2,915.

Risk sentiment FAQs

What do the terms"risk-on" and "risk-off" mean when referring to sentiment in financial markets?

In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.

What are the key assets to track to understand risk sentiment dynamics?

Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.

Which currencies strengthen when sentiment is "risk-on"?

The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.

Which currencies strengthen when sentiment is "risk-off"?

The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.

23:51

Japan BSI Large Manufacturing Conditions Index (QoQ) came in at -2.4, below expectations (6.5) in 1Q

23:50

Japan Producer Price Index (MoM) above expectations (-0.1%) in February: Actual (0%)

23:50

Japan Producer Price Index (YoY) meets expectations (4%) in February

23:48

Canada warns of oil export restrictions amid escalating trade tensions with US

Canada’s Energy Minister Jonathan Wilkinson said late Tuesday that the country may impose non-tariff measures, including restrictions on oil exports to the United States if trade tensions with Washington escalate further.

Wilkinson further stated that tariffs on US-bound ethanol are "absolutely" under consideration as part of potential retaliatory measures, particularly if Trump proceeds with plans to impose a 25% tariff on Canadian goods in April.

Market reaction

At the press time, the USD/CAD pair is down 0.02% on the day to trade at 1.4432.

Tariffs FAQs

What are tariffs?

Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.

What is the difference between taxes and tariffs?

Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.

Are tariffs good or bad?

There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.

What is US President Donald Trump’s tariff plan?

During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.

23:32

EUR/USD rises despite trade war risks as markets pivot to US CPI inflation data EURUSD

EUR/USD rose 80 pips, or 0.76%, on Tuesday.
Fiber markets have evaded the worst of the US’s ongoing tariff spat.
Key US data dominates the rest of the week’s calendar releases.

EUR/USD bidders found the gas pedal on Tuesday, bolstering Fiber further and sending the pair back into the 1.0950 level, albeit briefly. The pair tested into fresh 22-week highs as Euro bulls continue to press further into recovery territory.

US data remains the focal point for fx traders this week. This week, EU economic data is notably sparse; however, significant US data releases are scheduled back-to-back for most of the week. The US JOLTS job openings data was a bit stronger than anticipated, offering some stability to shaken markets. Job postings rose to 7.74M in January, exceeding the forecast of 7.63M and up from December’s revised figure of 7.51M, adjusted down from 7.6M.

On Wednesday, the US Consumer Price Index (CPI) inflation data for February takes center stage. Following an unexpected rise in consumer-level inflation in January, which dashed hopes for a swift return to rate cuts by the Federal Reserve (Fed) in 2025, markets are largely anticipating a lower February figure. Headline CPI inflation is projected to decrease to 2.9%, down from 3.0% year-over-year.

The US Producer Price Index (PPI) inflation report is expected on Thursday. While there's hope for a lessening inflation trend in consumer prices, business-level inflation is likely to remain persistently high, with core PPI inflation expected to maintain a steady rate of 3.6% year-over-year.

Friday will conclude with the University of Michigan Consumer Sentiment Index for March, along with the UoM’s Consumer Inflation Expectations. The UoM sentiment index is predicted to decline slightly to 63.4 from 64.7, reflecting a weakening economic outlook amid Donald Trump’s efforts to ignite a global trade war simultaneously with multiple countries.

EUR/USD price forecast

EUR/USD has closed flat or higher for all but one of the last six consecutive trading session, rising 5.5% in the process. Fiber has climbed nearly 7.6% bottom-to-top from the last major swing low near 1.0175, with bulls easily snapping the 200-day Exponential Moving Average (EMA) in the process.

EUR/USD is now running aground of technical resistance just north of the 1.0900 handle, a technical region that flummoxed Euro bulls the last time around back in October and November of last year.

EUR/USD daily chart

Euro FAQs

What is the Euro?

The Euro is the currency for the 19 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

What is the ECB and how does it impact the Euro?

The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

How does inflation data impact the value of the Euro?

Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.

How does economic data influence the value of the Euro?

Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.

How does the Trade Balance impact the Euro?

Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

23:31

Houthi terrorists vow to resume attacks on Israeli ships

A Houthi spokesman said late Tuesday that they will attack any Israeli ship that violates the group's ban on Israeli ships passing through the Red and Arabian seas, the Bab al-Mandab Strait, and the Gulf of Aden, effective immediately.

The "ban on the passage of all Israeli ships" will continue "until the crossings to the Gaza Strip are reopened and aid, food, and medicine are allowed in," said the Houthi terror group's military spokesperson, Yahya Saree, on behalf of the Houthi leader, Abdul Malik al-Houthi.

Market reaction

At the press time, the WTI price is up 0.14% on the day to trade at $66.42.

WTI Oil FAQs

What is WTI Oil?

WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.

What factors drive the price of WTI Oil?

Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.

How does inventory data impact the price of WTI Oil

The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.

How does OPEC influence the price of WTI Oil?

OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.

23:04

GBP/USD shrugs off tariff fears as Pound continues to recover ground GBPUSD

GBP/USD rose 0.5% on Tuesday, retesting multi-month highs.
UK economic data remains tepid this week, US data and trade policies remain in focus.
Cable touches new 18-week high as recovery mode continues.

GBP/USD extended its recent bullish rally on Tuesday, shrugging off ongoing trade war concerns that are weighing down American market centers. Cable rose a little over one-half of one percent, clipping into the 1.2950 level for the first time in 18 weeks.

US data remains the focal point for GBP/USD traders. UK economic data remains extremely limited on the data docket this week, but key US data releases are lined up one after another throughout most of this week. The US JOLTS job openings data was a bit stronger than anticipated, offering some stability to shaken markets. Job postings rose to 7.74M in January, exceeding the forecast of 7.63M and up from December’s revised figure of 7.51M, adjusted down from 7.6M.

US Consumer Price Index (CPI) inflation metrics for February are front-and-center on Wednesday. Markets are overwhelmingly hoping for a lower print for February after an unexpected uptick in consumer-level inflation in January shattered hopes for a quick return to a rate cutting schedule from the Federal Reserve (Fed) in 2025. Headline CPI inflation is expected to tick down to 2.9% from 3.0% YoY.

US Producer Price Index (PPI) inflation is slated for Thursday. While markets are hoping for an easing inflation outlook in consumer inflation, business-level inflation is expected to remain stubbornly high with core PPI inflation forecast to hold steady at 3.6% YoY.

Friday will close out with University of Michigan Consumer Sentiment Index figures for March, as well as the UoM’s Consumer Inflation Expectations. The UoM sentiment index is forecast to tick down slightly to 63.4 from 64.7 as the US’s economic outlook deteriorates in the face of Donald Trump’s insistence on trying to spark a global trade war with everybody at the same time.

GBP/USD price forecast

GBP/USD is testing into its second straight week of gains as the pair tests into fresh 18-week highs near 1.2950. The 1.3000 major price handle could cap off any further bullish gains as the key handle last served as a significant consolidation level in October and November of 2024.

For now, momentum is squarely in the hands of bidders, but technical oscillators have been pinned in overbought territory since January, and a quick turnaround could be on the cards soon.

GBP/USD daily chart

Pound Sterling FAQs

What is the Pound Sterling?

The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).

How do the decisions of the Bank of England impact on the Pound Sterling?

The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.

How does economic data influence the value of the Pound?

Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.

How does the Trade Balance impact the Pound?

Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

23:02

USD/CAD loses ground below 1.4450 ahead of US CPI data, BoC rate decision USDCAD

USD/CAD loses momentum to near 1.4430 in Tuesday’s late American session.
New tariffs on Canadian steel and aluminum will be 25%, not 50%, the White House said.
The BoC is expected to deliver a 25 basis points (bps) interest rate cut at its March meeting on Wednesday.

The USD/CAD pair trades in negative territory around 1.4430 during the late American session on Tuesday. Uncertainty surrounding the US President Donald Trump administration's trade policy and US recession concerns continue to undermine the US Dollar (USD) against the Canadian Dollar (CAD). Traders brace for the US February Consumer Price Index (CPI) inflation report and the Bank of Canada (BoC) interest rate decision on Wednesday.

Trump reversed his decision to double tariffs on Canadian steel and aluminum to 50%, which he announced late Tuesday. The White House confirmed to Reuters that new 25% tariffs on all imported steel and aluminum will still go into effect on Wednesday, including against allies and major US suppliers Canada and Mexico.

The US Dollar Index (DXY), a measure of the USD's value relative to its most significant trading partners' currencies, declines to new multi-month lows near 103.20 amid the likelihood of a US economic slowdown. The US February CPI inflation report will be in the spotlight on Wednesday. The headline CPI inflation is expected to cool down in February after accelerating in January. If the report shows a softer-than-expected outcome, this could exert some selling pressure on the Greenback against the CAD in the near term.

On the Loonie front, financial markets put the odds of another quarter-point rate cut this week at around 80%, according to LSEG data. That would bring the policy rate to 2.75% from 3.0%. Investors expect at least two further reductions by the end of 2025. The rising speculation of further BoC rate reductions could undermine the CAD and help limit the pair’s losses.

Canadian Dollar FAQs

What key factors drive the Canadian Dollar?

The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.

How do the decisions of the Bank of Canada impact the Canadian Dollar?

The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.

How does the price of Oil impact the Canadian Dollar?

The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.

How does inflation data impact the value of the Canadian Dollar?

While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.

How does economic data influence the value of the Canadian Dollar?

Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.

23:00

South Korea Unemployment Rate fell from previous 2.9% to 2.7% in February

22:11

USD/JPY Price Forecast: Rebounds from YTD lows, bulls target 148.00 USDJPY

Tweezers bottom’ pattern formed at 146.54 signals potential short-term trend reversal.
RSI flattens, suggesting bearish momentum is losing steam.
Key upside resistance seen at 148.00; clearance opens the door toward Senkou Span A at 149.79.

The USD/JPY rises as trade tensions loom due to back-and-forth tariff rhetoric between Canada and the United States (US), which initially weighed on the US Dollar. Nevertheless, as both countries agreed to lift tariffs, the pair advanced and traded at 147.77, up 0.34%.

USD/JPY Price Forecast: Technical outlook

USD/JPY formed a ‘tweezers bottom’ two candle chart pattern near the year-to-date (YTD) low of 146.54, hinting that the downtrend seems overextended after dropping from around 158.00 toward the current exchange rates. Despite being bearish, the Relative Strength Index (RSI) is flat, indicating that selling pressure is fading.

For a bearish continuation, USD/JPY needs to clear the YTD low of 146.54. If surpassed the next stop would be the September 30 swing low of 141.64, followed by the September 16 low of 139.58.

Conversely, if USD/JPY climbs above 148.00 a rally towards testing the Senkou Span A at 149.79 is on the cards.

USD/JPY Price Chart – Daily

Japanese Yen PRICE Today

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the Euro.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.02%	0.01%	0.00%	-0.05%	0.03%	0.00%	-0.02%
EUR	-0.02%		-0.01%	-0.06%	-0.06%	0.00%	-0.02%	-0.04%
GBP	-0.01%	0.01%		-0.02%	-0.05%	0.02%	-0.01%	-0.02%
JPY	0.00%	0.06%	0.02%		-0.03%	0.05%	0.00%	0.01%
CAD	0.05%	0.06%	0.05%	0.03%		0.08%	0.04%	0.03%
AUD	-0.03%	-0.01%	-0.02%	-0.05%	-0.08%		-0.03%	-0.04%
NZD	0.00%	0.02%	0.00%	-0.01%	-0.04%	0.03%		-0.01%
CHF	0.02%	0.04%	0.02%	-0.01%	-0.03%	0.04%	0.00%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

21:45

New Zealand Electronic Card Retail Sales (YoY) down to -4.2% in February from previous -0.5%

21:45

New Zealand Electronic Card Retail Sales (MoM) climbed from previous -1.6% to 0.3% in February

21:43

NZD/USD Price Analysis: Kiwi defends key support but face resistance NZDUSD

NZD/USD stands around 0.5710 area ahead of the Asian session, extending its mild recovery.
Buyers successfully defended the 20-day SMA, but sellers remain active, capping upside momentum.
Technical outlook shows resistance near 0.5750, while support is firm at 0.5660 and the 20-day SMA.

The NZD/USD pair edged higher on Tuesday ahead of the Asian session, moving near the 0.5710 zone after rebounding from recent lows. The uptick of 0.26% reflects some buying interest, yet the broader technical setup suggests that bears are still lurking around, limiting further gains.

From a technical perspective, the Relative Strength Index (RSI) is rising sharply within positive territory, indicating strengthening bullish momentum. However, the Moving Average Convergence Divergence (MACD) remains in negative territory, with flat red bars signaling a lack of strong directional bias. This suggests that while buyers managed to defend key support at the 20-day Simple Moving Average (SMA), further upside could face resistance unless momentum builds.

Looking at support and resistance levels, the first resistance appears around the 0.5750 region, followed by stronger resistance at 0.5780. If bulls manage to push the pair above these levels, a retest of the 100-day SMA could be on the table. On the downside, initial support stands at 0.5690, with stronger demand seen around the 20-day SMA, which remains a critical level for maintaining a positive outlook.

NZD/USD daily chart

21:39

AUD/JPY Price Analysis: Bulls regain ground but downside risks persist

AUD/JPY was seen trading around the 93.00 area ahead of the Asian session, recovering from a three-day losing streak.
Despite the rebound, the pair remains below key resistance, while indicators continue to reflect underlying bearish pressure.

The AUD/JPY pair bounced back on Tuesday ahead of the Asian session, moving near the 93.00 zone after declining for three consecutive sessions. While the daily advance suggests some buying pressure, the broader technical picture remains uncertain as the pair struggles to hold above key resistance levels.

Technical indicators paint a mixed picture. The Relative Strength Index (RSI) has sharply risen but remains in negative territory, indicating that the recovery lacks strong bullish momentum. Meanwhile, the Moving Average Convergence Divergence (MACD) is printing decreasing red bars, signaling that bearish momentum is easing but not entirely absent. This suggests that while selling pressure has subsided, buyers may still need to overcome key resistance before confirming a sustained recovery.

Looking at support and resistance levels, the first resistance lies around the 93.50 region, followed by stronger resistance at 94.00. A break above these levels could provide the bulls with further momentum. On the downside, immediate support is seen at 92.50, with a deeper floor around 92.00. The 20-day Simple Moving Average (SMA) at 95.00 remains a critical level for a broader trend shift.

AUD/JPY daily chart

21:03

US to kick off global 25% tariff on all steel and aluminum imports on Wednesday

White House staff reaffirmed on Tuesday that a global 25% tariff on all steel and aluminum imported into the US would take effect on Wednesday, beginning at midnight Eastern Standard Time. US President Donald Trump has perfected his time performance on announcing and then pivoting away from new tariff threats, after threatening double steel tariffs on Canada during the early hours of Tuesday's US market session and then entirely backing off by the end of the trading day.

Key highlights

25% steel and aluminum tariff begins at midnight.

No exemptions on steel and aluminum tariffs.

25% tariff on steel and aluminum with no exceptions or exemptions will go into effect for Canada and all of our other trading partners at midnight March 12th.

Trump Trade Secretary Navarro: No 50% steel and aluminum tariffs on Canada tomorrow.

Trump Trade Secretary Navarro: April 2nd we begin the process with reciprocity.

20:53

AUD/USD gains to near 0.6300 amid US Dollar weakness AUDUSD

AUD/USD moves higher on Tuesday, approaching the 0.6300 zone as the US Dollar weakens.
US economic uncertainty weighs on the Greenback, with investors awaiting key inflation data.
Technical indicators remain subdued, though AUD/USD recovered after holding a key support area.

The AUD/USD pair rises to near 0.6300 as the US Dollar (USD) slides due to an uncertain United States (US) economic outlook. The pair benefits from a softer Greenback as investors focus on upcoming inflation data, which could influence Federal Reserve (Fed) policy expectations. However, persistent concerns over trade tensions and global growth continue to cap upside potential for AUD/USD.

Daily digest market movers: Australian Dollar strengthens as US Dollar declines

The US Dollar Index (DXY) fell to new multi-month lows near 103.20, pressured by declining bond yields and speculation about a potential US economic slowdown. Market participants are focused on upcoming data releases, including inflation figures, MBA Mortgage Applications, and the EIA’s crude oil inventory report.
Market caution surrounding trade policies and economic recession risks in the US kept gains in check. AUD/USD fluctuated around the 0.6280-0.6270 zone, while the US Dollar Index hovered near 103.30, marking its weakest level since early October.
Commodity markets provided limited support for the Aussie. Copper and iron ore prices attempted to recover after recent declines, though concerns over slowing global demand kept gains subdued.
Trade negotiations between the US and Canada remain in focus. Ontario Prime Minister Doug Ford agreed to suspend planned electricity export tariffs following emergency discussions with US officials. The move comes after US President Donald Trump threatened a 50% tariff on Canadian steel and aluminum, further escalating trade tensions.
Investors are closely watching US inflation data, which is expected to be a key factor in shaping Federal Reserve policy expectations. A higher-than-expected CPI reading could reinforce the case for a prolonged period of restrictive monetary policy.

AUD/USD Technical Analysis: Gains hold but momentum remains weak

AUD/USD rose on Tuesday, moving toward the 0.6300 region during the American session. The pair recovered from earlier losses as the US Dollar weakened, though technical indicators suggest that momentum remains fragile.

The Moving Average Convergence Divergence (MACD) indicator continues to print decreasing red histogram bars, reflecting weakening bearish momentum. Meanwhile, the Relative Strength Index (RSI) is at 48, mildly rising but still in negative territory, indicating cautious sentiment.

The pair is attempting to regain traction but is struggling to hold above its 20-day Simple Moving Average (SMA). A failure to establish support above this level could expose AUD/USD to further downside, with key support emerging near 0.6250. On the upside, resistance is seen around 0.6320, where a break could open the door for further gains.

Australian Dollar FAQs

What key factors drive the Australian Dollar?

One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.

How do the decisions of the Reserve Bank of Australia impact the Australian Dollar?

The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.

How does the health of the Chinese Economy impact the Australian Dollar?

China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.

How does the price of Iron Ore impact the Australian Dollar?

Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.

How does the Trade Balance impact the Australian Dollar?

The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.

20:43

United States API Weekly Crude Oil Stock came in at 4.247M, above forecasts (2.1M) in March 7

20:28

Gold price surges above $2910 as trade war fuels heaven demand

XAU/USD extends gains amid geopolitical tensions despite solid US jobs data
US tariffs on Canadian aluminum and steel imports begin on Wednesday, boosting Gold’s safe-haven appeal.
Markets await US CPI inflation data on Wednesday and PPI on Thursday for the next Fed clues.

Gold (XAU) rallied on Tuesday as the trade war spurred demand for the yellow metal due to its safe-haven appeal. Upbeat United States (US) jobs data was ignored by traders, who continued to pile on Bullion. XAU/USD is trading at $2,917, up over 1%.

Sentiment has recently improved as Canada and the US de-escalated the threat of imposing tariffs. Concerns about an economic slowdown in the US exert downward pressure on US Treasury yields and the Greenback, which is a tailwind for Bullion prices.

Meanwhile, Trump’s trade tariffs on aluminum and steel imports will go into effect on Wednesday. The US Bureau of Labor Statistics (BLS) revealed that job openings rose in February.

Breaking news from Saudi Arabia revealed that Ukraine is ready to accept a ceasefire proposal, US Secretary of State Marco Rubio revealed. Ukraine’s President Volodymyr Zelenskyy added, “It is up to the US now to convince Russia to agree on a ceasefire.”

This could be a headwind for Gold prices, which tend to climb due to high geopolitical tensions and recessionary fears.

Meanwhile, XAU/USD traders eye the release of the Consumer Price Index (CPI) in the US on Wednesday, followed by the release of the Producer Price Index (PPI) on Thursday.

Daily digest market movers: Gold price unfazed by high US yields

The US 10-year Treasury bond yield recovers and edges up six basis points to 4.282% as traders eye the Fed’s interest rate cuts.
US real yields, as measured by the US 10-year Treasury Inflation-Protected Securities (TIPS) yield that correlates inversely to Gold prices, climb five-and-a-half basis points to 1.963%, a headwind for the non-yielding metal.
The Atlanta Fed GDP Now model predicts the first quarter of 2025 at -2.4%, which would be the first negative print since the COVID-19 pandemic.
The US JOLTS report showed that job openings rose to 7.740 million in January, up from 7.508 million, surpassing expectations of 7.63 million, signaling continued strength in the labor market.
The People’s Bank of China (PBoC) continues to purchase Gold, according to the World Gold Council (WGC). The PBoC increased its holdings by 10 tonnes in the first two months of 2025. However, the largest buyer was the National Bank of Poland (NBP), which increased its reserve by 29 tonnes, its largest purchase since June 2019, when it bought 95 tonnes.
Money market traders had priced in 77.5 basis points of easing in 2025, up from 74 bps last Friday, via data from Prime Market Terminal.

XAU/USD technical outlook: Gold price advances past $2,900

From a technical standpoint, Gold continues to trend up, but buyers need to clear last week’s peak at $2,930 on March 7 high so that buyers can challenge the psychological mark. A breach of the latter will expose the record high at $2,954, followed by the $3,000 mark.

Conversely, if XAU/USD drops below $2,900, the next support would be $2,850 ahead of the February 28 low of $2,832. Up next would be $2,800.

Gold FAQs

Why do people invest in Gold?

Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

Who buys the most Gold?

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

How is Gold correlated with other assets?

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

What does the price of Gold depend on?

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

20:06

US President Donald Trump pivots on tariff threats in record time

Within hours of his declaration via social media to impose a double tariff of 50% on Canadian steel and aluminum, US President Donald Trump has capitulated to pressures from both the market and within his cabinet, floating the suggestion that he may pivot away from his own double-tariff just hours after declaring his intent to double targeted tariffs on Canada on his Truth Social account.

President Trump also leaned back into discussing a possible ceasefire between Ukraine and Russia, but Trump's declarations on the topic have become increasingly non-specific in recent days. Donald Trump also cited that egg and gasoline prices have come down, a claim that remains difficult to corroborate with currently available market data. Egg prices, while they have decreased, have only pared the gains seen since last December, and gasoline price indexes have risen for three consecutive months.

Key highlights

The US had to do tariffs.

US economy is going to blow it away.

Tesla is a great product.

I have to get workers back and factories open.

Musk has never asked me for a favor.

Markets are going to go up and down, but we have to rebuild our nation.

Ontario's Ford to halt electricity tariff.

I respect Ontario's decision to suspend 25% energy surcharge.

Now we have to talk to Russia.

We’re going to meet with Russia later on today or tomorrow.

Hopefully Putin will agree on the plan.

I would invite Zelenskiy back to the White House.

Interest rates have come down.

Price of eggs and gasoline have come down.

Trump: I am looking at reducing tariffs on Canada now, (asked if he would reduce that) probably so.

May back off doubling steel and aluminum Canada tariffs.

I'll let you know if 50% tariffs on Canada are going into effect.

I don't see a recession at all.

I will label violence on Teslas domestic terrorism.

The country is going to boom.

Selloff doesn't concern me.

Some people will make great deals.

I met with IBM, Dell and HP yesterday.

We'll have the greatest markets we've ever had.

I'm very optimistic about the country.

I will talk to Putin, but it takes two to tango.

I think I will talk to Putin this week.

I hope to have a total ceasefire in the coming days.

Big meeting with Russia tomorrow.

I hope buying a Tesla boosts Tesla sales.

19:16

Ontario PM Ford agrees to suspend energy levies on US after Lutnick agrees to trade talks

Ontario Prime Minister Doug Ford agreed to suspend his announced export tariffs on Ontario-produced electricity bound for the US after US Secretary of Commerce Howard Lutnick agreed to emergency trade talks with Canada.

Ontario PM Ford's energy levies were announced Tuesday morning as a direct an immediate retaliation to US President Donald Trump, who vowed via social media post to impose a doubled 50% tariff on all Canadian steel and aluminum goods imported into the US as soon as Wednesday.

President Trump's social media proclamations sent markets into a tailspin, and the reaction from Canada was swift and immediate. The Trump administration's complaints, delivered via White House statement, that Ontario PM Ford's statements were "egregious and insulting" largely fell on deaf ears as the rest of the Trump team scrambles to clean up the mess.

Tariffs FAQs

What are tariffs?

Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.

What is the difference between taxes and tariffs?

Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.

Are tariffs good or bad?

There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.

What is US President Donald Trump’s tariff plan?

During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.

19:03

US White House Press Secretary Leavitt: We're in a period of economic transition

White House Press Secretary Karoline Leavitt addressed the press from the White House on Tuesday, following up on President Donald Trump's declarations of setting additional tariffs on Canada, to begin as soon as Wednesday. Press Secretary Leavitt's commentary covered a range of Trump's planned activities and statements, but fell short of declaring anything concrete.

Press Sec Leavitt wrapped up with an attempted pivot to discussing Ukraine, where firm resolutions remain equally elusive, ending discussions on a US-inspired trade war with Canada by noting that comments from Ontario Prime Minister Doug Ford hurt the Trump administration's feelings.

Key highlights

Trump will welcome NATO Secretary General on Thursday.

Stock market numbers are a snapshot of a moment in time.

We're in a period of economic transition.

Trump will be viewing a Tesla.

Trump has not yet spoken to Canada Designate PM Carney.

Doug Ford's comments were egregious and insulting.

Trump is determined to ensure the US depends on American electricity.

There are continued conversations between the US and Canada on tariffs.

Canada would be wise to not shut off electricity for Americans.

News of Rubio and Waltz meeting with Ukrainians has been positive.

Canada has always been an ally. Perhaps they are becoming a competitor now.

19:01

Forex Today: US inflation data gathers all the attention

There was no respite for the downside pressure in the Greenback on Tuesday, with the currency deflating to levels last seen in early October amid further effervescence around tariff and US recession concerns.

Here is what you need to know on Wednesday, March 12:

The US Dollar Index (DXY) tumbled to new multi-month lows near 103.20 amid shrinking yields and steady speculation over the likelihood of a US slowdown. The release of the Inflation Rate will take centre stage, seconded by MBA Mortgage Applications and the EIA’s weekly report on US crude oil inventories.

EUR/USD extended further its march north, reaching new four-month peaks well past the 1.0900 barrier. The ECB’s Lagarde, Nagel and Lane are due to speak amid an otherwise empty domestic calendar.

GBP/USD resumed its uptrend and flirted with new highs near 1.2970 amid the generalised sell-off in the Greenback. Next on tap on the UK docket will be the RICS House Price Balance on March 13.

USD/JPY hit fresh lows in the mid-146.00s before staging an acceptable rebound amid extra weakness in the US Dollar and declining US and Japanese yields. Japan’s Producer Prices will be at the centre of the debate seconded by the BSI Large Manufacturing index.

AUD/USD managed to capitalise on the US Dollar’s decline, reclaiming the 0.6300 hurdle and beyond and reversing three straight daily retracements. Next on tap in Oz will be the final prints of Building Permits and Private House Approvals, seconded by the speech by the RBA’s Jones.

WTI prices regained some ground and broke above the $67.00 mark per barrel following the increasing selling pressure in the Greenback.

Concerns over the US economy and the weakness surrounding the Greenback lent support to Gold prices, sending them back above the $2,920 region per troy ounce. Silver prices rallied to three-week highs near the $33.00 mark per ounce, reversing three daily pullbacks in a row.

18:37

Canadian Dollar loses ground for a third straight day as trade war heats up

The Canadian Dollar shed 0.3% against the Greenback on Tuesday.
Bank of Canada (BoC) rate call looms large during the midweek session.
US President Trump’s trade war against Canada has hit a new gear.

The Canadian Dollar roiled on Tuesday, falling roughly six-tenths of one percent against the Greenback at its lowest as markets weigh the latest evolution in US President Donald Trump’s self-styled trade war against Canada. The Canadian Dollar is still testing within familiar technical territory against the US Dollar, however, the Loonie is poised for further losses after shedding weight for three straight sessions against the USD, all on rising trade war fears.

The Bank of Canada (BoC) is slated to deliver its latest rate call on Wednesday, however markets are getting thrown for a loop on whether the BoC will be able to deliver its expected quarter-point rate trim as trade war rhetoric from team Trump ramps up. Donald Trump took to his favorite social media app to declare that he’s instructed his Secretary of Commerce to double tariffs on all steel and aluminum imported from Canada to 50%, also to begin on Wednesday.

Daily digest market movers: Canadian Dollar withers again on new tariff threats

US President Donald Trump vowed via social media to impose an additional tariff on Canadian steel and aluminum, bringing the total to 50% and declaring the tariff to go into effect on Wednesday.
Ontario Prime Minister Doug Ford was quick to retaliate against the US with a flat export tax of 25% on all electricity sent to the US, which sent Donald Trump into a further tailspin on social media.
Ontario PM Ford followed up with an additional warning that Ontario could shut up energy exports to the US entirely, which would see 1.5M Americans without power.
White House officials followed up with an announcement that the “paperwork” on additional steel and aluminum tariffs targeted at Canada hasn’t been “signed” in an effort to cross the moat that President Trump continues to dig for the US.
President Trump reiterated his misunderstanding of Canadian cap-trade tariffs on US dairy products that are baked into the USMCA trade agreement, which Donald Trump himself spearheaded during his first term in the White House.
The BoC is slated to cut interest rates by another quarter of a point to 2.75% on Wednesday, but rising tariff concerns could throw a wrench in the works.

Canadian Dollar price forecast

The Canadian Dollar whipsawed against the Greenback on Tuesday, falling 0.9% top-to-bottom at its absolute lowest as markets churn on geopolitical headlines. The Loonie has somewhat recovered its footing, but still remains down for a third straight session against the US Dollar. USD/CAD has risen around 2% in three straight trading days as the Loonie backslides against the Greenback.

USD/CAD 4-hour chart

Tariffs FAQs

What are tariffs?

Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.

What is the difference between taxes and tariffs?

Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.

Are tariffs good or bad?

There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.

What is US President Donald Trump’s tariff plan?

During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.

18:17

US Dollar extends losses amid fresh trade tensions

DXY plunges as US-Canada trade dispute escalates.
US equities retreat, Dow Jones down over 1%.
DXY dips below 103.50, with markets eyeing further downside.

The US Dollar (DXY) continues its downward spiral on Tuesday, with DXY hovering near 103.40 as trade tensions escalate. United States (US) President Donald Trump’s decision to hike tariffs on Canadian steel and aluminum to 50% rattled markets, adding further pressure on the Greenback. Meanwhile, in Europe, Germany’s Green coalition voiced support for a defense spending bill, providing an additional boost to the Euro (EUR). US equities erased earlier gains, with the Dow Jones down over 1%, reflecting broader market concerns.

Daily digest market movers: Trade dispute and policy shifts

The US-Canada trade rift intensified as President Trump moved forward with a sharp increase in tariffs on Canadian steel and aluminum, hitting 50%.
Germany’s Green coalition reaffirmed its commitment to a defense spending bill, reinforcing the Euro’s strength against the US Dollar.
The NFIB Business Optimism Index for February fell short, coming in at 100.7, down from the previous 102.8 reading.
The CME FedWatch Tool indicates a near certainty that rates will remain unchanged in the March 19 meeting, while the probability of a rate cut in May has climbed significantly.

DXY Technical Outlook: Multi-month lows as indicators signal oversold conditions

The US Dollar Index (DXY) sinks further, slipping below the key 103.50 level, marking its lowest level since October 2024. The 20-day and 100-day Simple Moving Averages (SMA) continue their bearish crossover, reinforcing negative momentum. The Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) both indicate oversold conditions, suggesting a possible short-term rebound. However, if 103.30 support fails to hold, the next downside target sits near 103.00.

Tariffs FAQs

What are tariffs?

Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.

What is the difference between taxes and tariffs?

Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.

Are tariffs good or bad?

There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.

What is US President Donald Trump’s tariff plan?

During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.

18:08

Mexican Peso holds firm despite Trump’s new tariffs on Canada

Mexican Peso flatlines as trade war escalation limits risk appetite.
USD/MXN trades near 20.33 as US-Canada trade tensions overshadow market sentiment.
Peso struggles despite broad USD weakness with the DXY hitting YTD lows at 103.30.
Investors await Mexico’s GDP data and US CPI this week amid lingering tariff uncertainty.

The Mexican Peso holds firm against the US Dollar and fails to gain traction even though the latter refreshes year-to-date (YTD) lows against a basket of six currencies, revealed the US Dollar Index (DXY). The escalation of the trade war between the United States (US) and Canada keeps the market risk-averse with the Peso failing to rally. The USD/MXN trades at 20.33, down 0.08%.

Earlier, US President Donald Trump escalated tensions with Canada by imposing additional 25% tariffs on aluminum and steel imports as retaliation for applying duties on electricity imported from Ontario to New York, Michigan and Minnesota.

The Mexican Peso was unfazed by the news, yet it remains trading below the 100-day Simple Moving Average (SMA) at 20.34.

Mexico’s economic docket remained empty with traders bracing for the release of quarterly and annually Aggregate Demand figures for Q4 2024. In the US, job vacancies rose, according to the US Bureau of Labor Statistics (BLS), amid uncertainty on tariffs and aggressive government spending cuts.

Even though the data was supportive of the US Dollar, the DXY prolonged its fall to year-to-date (YTD) lows of 103.30, down 0.55%.

This week, US inflation figures will shed some light on what the Federal Reserve (Fed) might do regarding monetary policy. As of writing, money market futures traders are pricing in 83.5 basis points of easing toward the year’s end.

Daily digest market movers: Mexican Peso hovers around 20.30

Despite the recent uptick on headline and core prices, Mexico’s Consumer Confidence data and the ongoing disinflation process in Mexico suggest Banco de Mexico (Banxico) could cut interest rates at the upcoming March 27 meeting.
The US Job Openings and Labor Turnover Survey (JOLTS) report revealed that vacancies increased in January from 7.508 million to 7.740 million, exceeding forecasts of 7.63 million.
A Reuters poll showed that 70 out of 74 economists say the risk of recession has risen in the US, Canada and Mexico.
In the boiler room, trade disputes between the US and Mexico remain front and center. If the countries could agree, it would pave the way for a recovery of the Mexican currency. Otherwise, further USD/MXN upside is seen as US tariffs could trigger a recession in Mexico.

USD/MXN technical outlook: Mexican Peso weakens as USD/MXN climbs past 20.30

The USD/MXN consolidated within the 20.20–20.50 range during the last three days with neither buyers nor sellers able to break the range. Momentum hints that further downside is seen in the near term, according to the Relative Strength Index (RSI).

With that said, the USD/MXN’s first support would be 20.20, followed by the 20.00 figure. If surpassed, the next stop would be the 200-day SMA at 19.59. Conversely, if USD/MXN hurdles toward 20.50, the next resistance would be the March 4 swing high at 20.99 and the YTD peak of 21.28.

Mexican Peso FAQs

What key factors drive the Mexican Peso?

The Mexican Peso (MXN) is the most traded currency among its Latin American peers. Its value is broadly determined by the performance of the Mexican economy, the country’s central bank’s policy, the amount of foreign investment in the country and even the levels of remittances sent by Mexicans who live abroad, particularly in the United States. Geopolitical trends can also move MXN: for example, the process of nearshoring – or the decision by some firms to relocate manufacturing capacity and supply chains closer to their home countries – is also seen as a catalyst for the Mexican currency as the country is considered a key manufacturing hub in the American continent. Another catalyst for MXN is Oil prices as Mexico is a key exporter of the commodity.

How do decisions of the Banxico impact the Mexican Peso?

The main objective of Mexico’s central bank, also known as Banxico, is to maintain inflation at low and stable levels (at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%). To this end, the bank sets an appropriate level of interest rates. When inflation is too high, Banxico will attempt to tame it by raising interest rates, making it more expensive for households and businesses to borrow money, thus cooling demand and the overall economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN.

How does economic data influence the value of the Mexican Peso?

Macroeconomic data releases are key to assess the state of the economy and can have an impact on the Mexican Peso (MXN) valuation. A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only does it attract more foreign investment but it may encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this strength comes together with elevated inflation. However, if economic data is weak, MXN is likely to depreciate.

How does broader risk sentiment impact the Mexican Peso?

As an emerging-market currency, the Mexican Peso (MXN) tends to strive during risk-on periods, or when investors perceive that broader market risks are low and thus are eager to engage with investments that carry a higher risk. Conversely, MXN tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.

17:05

United States 3-Year Note Auction: 3.908% vs previous 4.3%

16:42

Dow Jones Industrial Average drops further as trade war heats up

The Dow Jones tumbled nearly 800 points peak-to-trough on Tuesday.
President Trump kicked off the next leg of his trade war with Canada.
JOLTS came in slightly stronger than expected, but geopolitics dominate.

The Dow Jones Industrial Average (DJIA) shed further weight on Tuesday, dropping nearly 700 points on the day, or 1.76% after United States (US) President Donald Trump vowed to heat up his own trade war with Canada. President Trump took to his Truth Social account early Tuesday, informing his social media followers that he’s instructed his Secretary of Commerce to impose an additional 25% tariff on all Canadian steel and aluminum exports to the US, bringing the new total to 50% on all Canadian metals. The new tariffs are, in theory, slated to go into effect on Wednesday morning.

Donald Trump remains deeply unsatisfied with the conditions of US dairy trade with Canada as outlined in his own bespoke USMCA trade agreement that came out of NAFTA renegotiations that Trump demanded during his first term as US President. Under USMCA, Canada allows a certain amount of US dairy across its borders entirely tariff-free, then imposes steep trade fees to clamp down on dairy imports to prevent US economic dumping. President Trump appears to be entirely unsatisfied with the terms of his own bespoke trade agreement, declaring via social media that his steep Canadian metals tariffs won’t be rescinded until Canada arbitrarily chooses to violate the terms set out for it under the USMCA and drops all cap-trade tariffs on US dairy products entirely.

US JOLTS Job Openings data came in slightly stronger than expected, helping to provide some stability for otherwise rattled markets. Job postings increased to 7.74M in January, climbing above the expected print of 7.63M and rising from December’s 7.508M, which was revised slightly lower from 7.6M.

Dow Jones news

Most of the securities listed on the Dow Jones are printing in the red on Tuesday as markets grapple with the latest iteration of Trump’s self-styled trade war with some of the US’s closest trading partners. Salesforce (CRM) rebounded 1.9% to $278 per share, and Nvidia (NVDA) rose 1.7% to $109 per share as tech darlings pare recent losses amid the cooling AI tech rally.

On the low side, Verizon (VZ) tumbled around 7% to $43 per share, falling after guidance from a Verizon Communications wireless executive warned that new customer additions would likely come in “soft” during the current quarter. Disney (DIS) fell 4.4% to $98.50 per share, and Apple (AAPL) also declined 3.5% to fall below $220 per share as trade war fears ramp up.

Dow Jones price forecast

Now that the seal is finally broken and the Dow Jones has pierced the 200-day Exponential Moving Average (EMA) near the 42,000 key price handle for the first time in over two years, bearish momentum is continuing to drag price action even lower. The Dow Jones Industrial Average is trading at its lowest prices in nearly 26-weeks as the majority equity index tips over into bullish correction territory.

The Dow Jones is down 8.4% from record highs set last November just north of 45,000 as the current bear run heats up. Still, bullish pressure is beginning to cook as technical oscillators pin even deeper into oversold territory, flashing warnings of a topside correction. A supply zone between the 41,000 and 40,000 major price handles could provide a convenient landing zone for bears before the Dow recovers its footing for a fresh push higher.

Dow Jones daily chart

Dow Jones FAQs

What is the Dow Jones?

The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.

What factors impact the Dow Jones Industrial Average?

Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.

What is Dow Theory?

Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.

How can I trade the DJIA?

There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.

15:50

EUR/USD Price Analysis: Bulls reclaim momentum as pair nears November highs EURUSD

EUR/USD was seen trading around the 1.0900 area after the European session, extending its recent rally.
Following a brief pause on Monday, the pair surged by more than 0.70%, approaching its highest levels since November 2024.
Technical indicators remain in overbought territory, signaling potential exhaustion, while key resistance levels lie ahead.

The EUR/USD pair regained bullish traction on Tuesday after the European session, advancing past the 1.0900 zone and continuing its strong upward trend. After stalling briefly on Monday, buyers re-entered the market, fueling a more than 0.70% rally. The pair now hovers near its highest levels since November 2024, with market momentum firmly favoring the bulls.

From a technical perspective, the Relative Strength Index (RSI) has climbed further into overbought territory, rising sharply to indicate strong buying pressure. Meanwhile, the Moving Average Convergence Divergence (MACD) continues to print rising green bars, reflecting sustained bullish momentum. However, these overbought conditions suggest a possible correction could be on the horizon if buyers start to take profits.

Looking at key levels, immediate resistance is now seen near the 1.0930 zone, a break of which could open the door toward the 1.0970-1.1000 range. On the downside, support is aligned near the 1.0850 region, followed by the 1.0800 psychological level, where the 200-day Simple Moving Average (SMA) is positioned.

EUR/USD daily chart

15:32

GBP/USD climbs above 1.2920 as trade war fears weaken USD GBPUSD

Trump imposes an additional 25% duty on Canadian aluminum and steel, triggering retaliation.
JOLTS job openings beat forecasts, rising to 7.74 million in January.
Markets price in 82 bps of Fed rate cuts, increasing July easing expectations.
Traders eye US CPI data on Wednesday and UK GDP figures for further direction.

The Pound Sterling (GBP) extended its gains versus the US Dollar (USD) on Tuesday as the latter continued to plunge due to controversial trade policies by United States (US) President Donald Trump. He announced an additional 25% tariff on aluminum and steel imports from Canada, as the latter applied duties on electricity imported to New York, Michigan and Minnesota. The GBP/USD pair is trading at 1.2945 up 0.53%.

Sterling up 0.38% as US tariffs on Canada fuel risk aversion

The market mood remains dismal due to the ongoing trade war, favoring most G10 currencies except the Greenback. The US Job Openings and Labor Turnover Survey (JOLTS) report revealed that vacancies increased in January from 7.508 million to 7.740 million, exceeding forecasts of 7.63 million.

GBP/USD erased Monday’s losses and is climbing past 1.2900 as market participants continue to price in additional easing by the Federal Reserve (Fed). Data from the Chicago Board of Trade (CBOT) showed that investors estimate the US central bank to ease policy 82 basis points.

Despite the recent uptrend in GBP/USD, analysts suggest it will likely stall in the medium term. Nick Rees, Head of Macro Research at Monex Europe, said that while US recession fears were “overdone,” currency markets “could be wrong for an extended period.”

Meanwhile, traders will be eyeing February’s US inflation report on Wednesday. Most analysts foresee continuing the disinflation process, which could increase the chances for a Fed rate cut in July. Across the pond, investors are eyeing the release of January's Gross Domestic Product (GDP) figures.

GBP/USD Price Forecast: Technical outlook

GBP/USD remains upward-biased after carving a successive series of higher highs and higher lows. Nevertheless, the trend has lost some steam as the Relative Strength Index (RSI) reaches overbought conditions, which could pave the way for a correction. Despite this, if the pair clears 1.2950, a move to 1.3000 is likely. Otherwise, a drop below 1.2900, could exacerbate a retracement towards the 200-day Simple Moving Average (SMA) at 1.2789.

British Pound PRICE Today

The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Canadian Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.74%	-0.50%	0.25%	0.24%	-0.06%	-0.11%	-0.10%
EUR	0.74%		0.25%	1.02%	0.99%	0.69%	0.64%	0.65%
GBP	0.50%	-0.25%		0.61%	0.74%	0.44%	0.39%	0.41%
JPY	-0.25%	-1.02%	-0.61%		-0.01%	-0.31%	-0.37%	-0.34%
CAD	-0.24%	-0.99%	-0.74%	0.01%		-0.29%	-0.34%	-0.33%
AUD	0.06%	-0.69%	-0.44%	0.31%	0.29%		-0.04%	-0.02%
NZD	0.11%	-0.64%	-0.39%	0.37%	0.34%	0.04%		0.02%
CHF	0.10%	-0.65%	-0.41%	0.34%	0.33%	0.02%	-0.02%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

15:03

Trump imposes additional 25% tariffs on Canada

United States (US) President Donald Trump revealed on his Truth Social account that he is imposing an additional 25% tariff, to 50% on aluminum and steel imports from Canada to the US. He added it would go into effect on March 12 morning.

Trump’s condition for removing tariffs is that Canada drops farm tariffs of 250% to 390% on various US dairy products, as shown in his post. He added that he would declare a national emergency on electricity in New York, Michigan, and Minnesota after Ontario’s premier imposed 25% tariffs on electricity.

Moreover, he threatens to apply duties on cars on April 2.

Market’s reaction

The USD/CAD rallied from 1.4410 to 1.4477 before clearing the 1.4500 psychological figure, with buyers eyeing March’s peak at 1.4542.

Canadian Dollar PRICE Today

The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the Australian Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.77%	-0.43%	0.03%	0.55%	0.12%	0.01%	-0.20%
EUR	0.77%		0.36%	0.84%	1.33%	0.90%	0.79%	0.59%
GBP	0.43%	-0.36%		0.61%	0.97%	0.55%	0.43%	0.24%
JPY	-0.03%	-0.84%	-0.61%		0.49%	0.06%	-0.06%	-0.24%
CAD	-0.55%	-1.33%	-0.97%	-0.49%		-0.42%	-0.54%	-0.73%
AUD	-0.12%	-0.90%	-0.55%	-0.06%	0.42%		-0.10%	-0.30%
NZD	-0.01%	-0.79%	-0.43%	0.06%	0.54%	0.10%		-0.19%
CHF	0.20%	-0.59%	-0.24%	0.24%	0.73%	0.30%	0.19%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).

14:50

US JOLTS Job openings increased to 7.74 million in January

According to Tuesday’s Job Openings and Labor Turnover Survey (JOLTS) from the US Bureau of Labor Statistics (BLS), job openings totaled 7.74 million at the end of January. This figure, which came in above analysts’ expectations of 7.63 million, follows the 7.508 million positions reported in December (revised from 7.60 million).

In the news release: “Hires held at 5.4 million, and total separations changed little at 5.3 million. Within separations, quits (3.3 million) and layoffs and discharges (1.6 million) changed little.”

Market reaction

The Greenback remains well on the defensive, navigating its seventh consecutive day in the red and dragging the US Dollar Index (DXY) to multi-month lows near 103.40.

US Dollar PRICE Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Canadian Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.74%	-0.37%	0.03%	0.52%	0.13%	0.00%	-0.24%
EUR	0.74%		0.38%	0.77%	1.28%	0.88%	0.78%	0.52%
GBP	0.37%	-0.38%		0.61%	0.89%	0.50%	0.39%	0.15%
JPY	-0.03%	-0.77%	-0.61%		0.49%	0.10%	-0.00%	-0.24%
CAD	-0.52%	-1.28%	-0.89%	-0.49%		-0.39%	-0.49%	-0.74%
AUD	-0.13%	-0.88%	-0.50%	-0.10%	0.39%		-0.09%	-0.34%
NZD	-0.01%	-0.78%	-0.39%	0.00%	0.49%	0.09%		-0.25%
CHF	0.24%	-0.52%	-0.15%	0.24%	0.74%	0.34%	0.25%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

14:21

EUR/USD to push forward towards 1.12 – Rabobank EURUSD

Last week we revised up our EUR/USD forecasts significantly mostly on the back of the will of the German coalition-in-waiting to change the country’s debt brake and unleash a substantial amount of fiscal spending, Rabobank's FX analyst Jane Foley notes.

Investors switch their focus to US growth risks

"That said, we have been of the view that following the recent shift higher in EUR/USD there would be scope for pullbacks, or at least a period of consolidation. So far, there are no convincing signs of pullbacks which is suggestive of the strength of the buying momentum behind the EUR’s uptrend. Tomorrow’s release of the US CPI inflation data could be the next real test for EUR/USD bulls."

"The market consensus suggests that the US inflation trend will ease slightly, though the Bloomberg economists’ survey suggests that there is some variation in this view. Even data in line with the median hints that the Fed is likely to be wary about cutting rates as much as the market is currently expecting."

"That said, investors have clearly switched their focus to US growth risks. If the US inflation data are robust and the market chooses to overlook the implications for Fed policy, the momentum driving EUR/USD higher could find fresh incentive near-term. On balance we retain our new target of EUR/USD1.12."

14:18

USD/JPY surges to near 148.00 as Trump tariffs weigh on Japan’s economic outlook USDJPY

USD/JPY rises sharply to near 148.00 as Japan is unlikely to avoid tariffs by the US.
An expected increase in the US JOLTS Job Openings data for January has offered temporary support to the US Dollar.
Both the US headline and core CPI are estimated to have decelerated in February.

The USD/JPY pair recovers strongly to near 148.00 in North American trading hours on Tuesday after posting a fresh five-month low of 146.50 earlier in the day. The pair bounces back as the Japanese Yen (JPY) slumps after comments from Japan’s trade minister Yoji Muto indicated that Japan would not be able to escape tariffs from the United States (US).

Japanese Yen PRICE Today

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the Canadian Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.74%	-0.40%	0.21%	0.31%	-0.08%	-0.11%	-0.19%
EUR	0.74%		0.35%	0.93%	1.05%	0.67%	0.64%	0.56%
GBP	0.40%	-0.35%		0.61%	0.70%	0.32%	0.28%	0.22%
JPY	-0.21%	-0.93%	-0.61%		0.08%	-0.31%	-0.34%	-0.40%
CAD	-0.31%	-1.05%	-0.70%	-0.08%		-0.38%	-0.41%	-0.48%
AUD	0.08%	-0.67%	-0.32%	0.31%	0.38%		-0.02%	-0.02%
NZD	0.11%	-0.64%	-0.28%	0.34%	0.41%	0.02%		-0.07%
CHF	0.19%	-0.56%	-0.22%	0.40%	0.48%	0.02%	0.07%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

"We did not receive a response that Japan would be exempt," Muto said after meetings with Secretary of Commerce Howard Lutnick, US Trade Representative Jamieson Greer, and White House economic adviser Kevin Hassett, Reuters report. Muto added that the US acknowledged contribution from Japanese companies to its economy, but declined to elaborate on his counterparts’ stance otherwise. Japan is the fourth largest trading partner of the US and tariffs on Japan would diminish competitiveness of Japanese products across the globe.

Trump’s tariff fears are expected to force traders to reassess expectations that the Bank of Japan (BoJ) will raise interest rates again this year.

Meanwhile, the US Dollar (USD) has discovered a temporary cushion after posting a fresh four-month low after the release of the US JOLTS Job Openings data for January. The US Bureau of Labor Statistics (BLS) reported that business owners posted 7.74 million jobs, almost in line with estimates, higher than 7.51 million seen in December. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, is still down almost 0.35% near 103.50.

Going forward, investors will focus on the US Consumer Price Index (CPI) data for February, which will be released on Wednesday. Year-on-year headline inflation data is estimated to have grown by 2.9%, slower than 3% in January. In the same period, the core CPI – which excludes volatile food and energy prices – is expected to have decelerated to 3.2% from the prior release of 3.3%.

Japanese Yen FAQs

What key factors drive the Japanese Yen?

The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.

How do the decisions of the Bank of Japan impact the Japanese Yen?

One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.

How does the differential between Japanese and US bond yields impact the Japanese Yen?

Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.

How does broader risk sentiment impact the Japanese Yen?

The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.

14:16

Japan: BoJ to press pause on hikes – Standard Chartered

BoJ likely to keep rates unchanged in March to support financial stability and avoid premature tightening. Revised Q4 GDP indicates risks to a sustained recovery from weak domestic demand. Long-end JGBs have sold off sharply, likely on sentiment, higher Bund yields and end-FY seasonality. 10Y yield differentials have broken below the lows of September, signalling more USD/JPY downside, Standard Chartered's economists Chong Hoon Park and Nicholas Chia note.

Taking a breather

"We expect the Bank of Japan (BoJ) to keep rates unchanged on 19 March, primarily to support financial stability and avoid any premature tightening, which could weaken domestic spending. The central bank is likely to gradually hike rates starting Q2-2025, which would help address inflationary risks without undermining growth, in our view. Q4 GDP grew an annualised 2.2%, driven by exports, but domestic demand remained weak."

"In January, industrial production contracted (-1.1% m/m), PMI remained below 50, and real wages fell (-1.8% y/y), limiting consumption. Core inflation excluding food and energy (2.5% y/y) has exceeded the BoJ’s target since last July, fuelled by a weak JPY and high energy prices."

"Past instances show that rate hikes by the BoJ have led to economic slowdowns, notably in the 1990s and in 2007. We, therefore, expect the BoJ to hold rates in March before cautiously tightening in Q2-2025. A sudden hike could also unwind JPY carry trades, disrupting global markets. The BoJ will also look to manage external pressure from the US while safeguarding domestic economic resilience. Clear communication with financial markets will be crucial to prevent volatility."

14:14

GBP firmer but lags EUR gains – Scotiabank

Pound Sterling (GBP) is firmer on the session, with the EUR’s gains still proving the GBP with its essential dynamism, Scotiabank's Chief FX Strategist Shaun Osborne notes.

GBP lags EUR gains driving a jump in EUR/GBP

"The pound has lagged the jump in the EUR, however, resulting in a jump in EURGBP back above 0.84 to ate January levels. UK data reports remain few and far between. The British Retail Consortium’s February survey of retail activity reflected softer than expected sales last month, with non-food sales falling 0.1%."

"GBP is still effectively in consolidation mode, holding within the consolidation range that formed late last week and held yesterday. Cable gains need to push on through the consolidation range ceiling (1.2948) to progress towards 1.30/1.31. Support is 1.2860."

14:12

EUR trading turns a little choppy – Scotiabank

Spot trading is turning a little choppy on the day as the Euro (EUR) probes the 1.09 area but further EUR gains look likely as investors focus on the massive loosening in Eurozone fiscal policy and the jump in yields that resulted and contrast that with lower yields and growth concerns in the US that is chipping away at the 'US exceptionalism' narrative, Scotiabank's Chief FX Strategist Shaun Osborne notes.

EUR advance extends through 1.09

"European stocks continue to outperform US equities by a significant margin despite continued volatility across markets. In YTD terms, the performance split is massive—around 15% percentage points. Solid stock gains amid a massive loosening in European (German) fiscal policy suggest the outperformance may extend and extend the EUR a bit more of a lift."

"New highs for spot—the EUR is close to regaining the peak reached around the US election at 1.0935 back in November—keeps the technical trend positive and the focus on the topside for spot. The 1.0957 point is the key technical level to focus on in the near term—it’s the 76.4% Fib retracement of the 1.12/1.01 drop and the final, major resistance point ahead of return to 1.12. Support is 1.0725 and 1.0795/00."

14:08

The CAD is a little firmer on the session – Scotiabank

Tariff concerns are keeping the Canadian Dollar (CAD) on the defensive and the US Dollar (USD) trading well above its estimated fair value, according to our measure, at least, Scotiabank's Chief FX Strategist Shaun Osborne notes.

CAD gains modestly but trades well below estimated FV

"USD/CAD’s estimated equilibrium has eased to around 1.41 (1.4103 today) over the past few days, reflecting some narrowing in US/Canada spreads. Markets are fully priced for a BoC rate cut this week but US 2Y yields have fallen some 45bps over the past month as US slowdown concerns have mounted around tariff uncertainties and DOGE-inspired austerity."

"The USD still looks overvalued relative to the tariff regime that is in place at the moment and that should—at the very least—limit USD/CAD’s ability to push higher."

"USD/CAD is marginally softer on the session after peaking near 1.4475 in late trade yesterday (now resistance). Spot formed a bearish 'shooting star' candle on the 6-hour chart around that move and the subsequent losses in the USD 'confirm' the bearish turn. USD weakness may extend to 1.4355/60 in the short run."

14:05

USD slide resumes after brief pause – Scotiabank

After a brief pause yesterday as stocks slumped, the US Dollar (USD) slide is resuming this morning as US growth concerns continue to weigh on sentiment. US bond yields have edged fractionally lower, in contrast to mostly higher yields in Europe, keeping the shift in spreads running against the USD, Scotiabank's Chief FX Strategist Shaun Osborne notes.

USD may be on the cusp of another, sharp leg lower

"The NFIB Small-Business Optimism index fell slightly more than expected in February, the just-released data shows, with respondents citing uncertainty around President Trump’s policies as a factor. The economic outlook component saw its sharpest fall in nearly three years while more companies raised prices, or plan to do so in the coming months."

"On the session so far, the USD is down against all majors except the CHF and JPY (amid signs that global stocks have steadied). European FX is generally firmer, with the EUR carving out another solid advance on the day. It’s another quiet day data-wise. There is a 3Y auction (13ET for the results). Later, Japan releases PPI data and the BSI activity surveys which may provide some guidance for trends in the BoJ’s tankan survey due at the end of the month."

"Technically, the DXY’s renewed weakness today suggests another potentially significant leg lower is about to unfold for the index. The DXY managed to steady near to the 104 level yesterday but the failure to regain that point in a sustained way keeps the focus on the downside and a further 2-4% drop in the next few weeks."

14:00

United States JOLTS Job Openings above expectations (7.63M) in January: Actual (7.74M)

13:49

AUD/USD gains to near 0.6300 amid weakness in US Dollar AUDUSD

AUD/USD rises to near 0.6300 as the US Dollar slides due to uncertain US economic outlook.
Australia’s Westpac Consumer Confidence increases significantly to 4% in March.
Investors await the US inflation data, which will influence expectations for the Fed’s monetary policy outlook.

The AUD/USD pair moves higher to near the key level of 0.6300 in Tuesday’s North American session. The Aussie pair gains as the US Dollar (USD) faces significant selling pressures amid fears that the tariff agenda of United States (US) President Donald Trump will lead to economic turbulence in the near term.

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, posts a fresh four-month low near 103.50.

Investors expect Trump tariffs to accelerate price pressures as their impact will be borne by US importers. Such a scenario will diminish the purchasing power of households who have been already battling to high inflationary pressures.

To get cues about the current status of US inflation, investors will focus on the Consumer Price Index (CPI) data for February, which will be published on Wednesday. The US inflation report is expected to show that the headline CPI decelerated to 2.9% from 3% in January. In the same period, the core CPI – which excludes volatile food and energy prices – is estimated to have grown at a slower pace of 3.2% compared to 3.3% seen earlier.

In the Aussie region, Westpac Consumer Confidence has increased significantly to 4% in March from 0.1% in February, the highest level in four months. Consumer Confidence has increased due to the Reserve Bank of Australia’s (RBA) interest rate cut decision on February 18. The RBA reduced its Official Cash Rate (OCR) by 25 basis points (bps) to 4.1% but guided a cautious outlook as the battle against inflation is not over yet.

Australian Dollar FAQs

What key factors drive the Australian Dollar?

One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.

How do the decisions of the Reserve Bank of Australia impact the Australian Dollar?

The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.

How does the health of the Chinese Economy impact the Australian Dollar?

China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.

How does the price of Iron Ore impact the Australian Dollar?

Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.

How does the Trade Balance impact the Australian Dollar?

The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.

12:55

United States Redbook Index (YoY) declined to 5.7% in March 7 from previous 6.6%

12:24

US Dollar hits a fresh four-month low on German spending deal optimism

The US Dollar trades broadly in the red on Tuesday, devaluing further against most major peers.
The German Green coalition is said to be back on track for a defense spending bill.
The US Dollar Index heads to the lower range of 103.00 and could break below it.

The US Dollar Index (DXY), which tracks the performance of the US Dollar (USD) against six major currencies, is eking out lows not seen since October 2024. The index trades above 103.50 at the time of writing on Tuesday. The Greenback faces headwinds on early European comments from the German green coalition, who said to be back on track for an agreement on a German defense spending bill. This pushes the US Dollar (USD) lower in favor of the Euro (EUR).

On the economic data front, the US JOLTS Job Openings report for January will catch most of the attention. Traders are already spooked by recession fears, so a further decline in job openings could add to that conviction and see further downside momentum for the DXY. The US NFIB Business Optimism Index for February already released fell to 100.7, missing the 101 estimate and further down from the previous 102.8 reading.

Daily digest market movers: Some dots to connect

In the early European trading session, a headline was published that the German Green coalition leader said to be hopeful on a defense spending deal this week, Bloomberg reported. This news represents a 180-degree shift from the headline that triggered some US Dollar (USD) strength on Monday, where the Green Party was unwilling to support any defense spending deal.
At 14:00, the US JOLTS Job Openings report for January will be published. Expectations are for an uptick to 7.75 million openings against the 7.6 million from December.
Equities are trying to brush off the doom and gloom from Monday. European equities are higher while US futures are in positive territory.
The CME Fedwatch Tool projects a 95.0% chance for no interest rate changes in the upcoming Fed meeting on March 19. However, the chances of a rate cut at the May 7 meeting increase to 47.8% and to 89.9% at June’s meeting.
The US 10-year yield trades around 4.20%, off its near five-month low of 4.10% printed on Tuesday last week.

US Dollar Index Technical Analysis: Not a one-day event

The US Dollar Index (DXY) faces more selling pressure on Tuesday as recession fears are not going away. Traders remain concerned about tariffs’ impact and uncertainty on the US economy. Seeing the performance in US equities year-to-date, there is not much reason to be happy and no reason to support a stronger Dollar in the current narrative.

There is an upside risk at 104.00 for a firm rejection. If bulls can avoid that, look for a large sprint higher towards the 105.00 round level, with the 200-day Simple Moving Average (SMA) at 105.03. Once broken through that zone, a string of pivotal levels, such as 105.53 and 105.89, will present as caps.

On the downside, the 103.00 round level could be considered a bearish target in case US yields roll off again, with even 101.90 not unthinkable if markets further capitulate on their long-term US Dollar holdings.

US Dollar Index: Daily Chart

US-China Trade War FAQs

What does “trade war” mean?

Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.

What is the US-China trade war?

An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.

Trade war 2.0

The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.

12:01

Brazil Industrial Output (MoM) below expectations (0.4%) in January: Actual (0%)

12:00

Brazil Industrial Output (YoY) came in at 1.4%, below expectations (2.2%) in January

11:31

USD/CAD Price Forecast: Trades lower amid caution ahead of BoC monetary policy meeting USDCAD

USD/CAD slides to near 1.4400 amid weakness in the US Dollar.
US President Trump’s tariff agenda has prompted uncertainty over the US economic outlook.
The BoC is expected to cut its borrowing rates by 25 bps to 2.75% on Wednesday.

The USD/CAD pair declines to near 1.4400 in European trading hours on Tuesday after correcting from the four-day high of 1.4470 posted on Monday. The Loonie pair weakens as the US Dollar (USD) underperforms across the board amid fears that the United States (US) could face economic turbulence in the near term due to President Donald Trump’s ‘America First’ policies.

Donald Trump’s tariff agenda is expected to increase input costs for US business owners, which they will pass on to consumers. Such a scenario would result in a decline in households’ purchasing power, diminishing the overall demand.

The US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, slumps to near 103.35, the lowest level seen in four months.

Meanwhile, the Canadian Dollar (CAD) has been underperforming for over a month as Trump has imposed 25% tariffs on Canada but has provided a one-month exemption on goods that come under the United States-Mexico-Canada Agreement (USMCA).

On Wednesday, investors will focus on the Bank of Canada’s (BoC) monetary policy decision. Analysts at Citi expect the BoC to cut interest rates by 25 basis points (bps) to 2.75% as Trump tariffs have intensified fears of a recession.

USD/CAD holds above the 100-period Exponential Moving Average (EMA), which is around 1.4200, suggesting that the overall trend is bullish.

The 14-period Relative Strength Index (RSI) oscillates in the 40.00-60.00 range, suggesting a sideways trend.

Going forward, an upside move above the March 10 high of 1.4470 will open the door toward the psychological resistance of 1.4500 and the January 30 high of 1.4595.

On the contrary, a breakdown below the February 14 low of 1.4151 by the pair would expose it to the December 9 low of 1.4094, followed by the December 6 low of 1.4020.

USD/CAD daily chart

Canadian Dollar FAQs

What key factors drive the Canadian Dollar?

The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.

How do the decisions of the Bank of Canada impact the Canadian Dollar?

The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.

How does the price of Oil impact the Canadian Dollar?

The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.

How does inflation data impact the value of the Canadian Dollar?

While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.

How does economic data influence the value of the Canadian Dollar?

Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.

10:32

S&P 500: Next potential supports are at 5520 and 5400/5370 – Société Générale

S&P 500 recently broke below the lower limit of its range since December confirming a short-term downtrend. It has also crossed below the 200-DMA first time since November 2023, Société Générale's FX analysts note.

Risk of a larger decline is present

"If the index fails to overcome the lower band of previous range at 5770pts, there could be risk of a larger decline. Next potential supports are located at 5520pts, the 23.6% retracement of the whole uptrend since 2022 and September low of 5400/5370pts."

10:28

DXY: Next potential supports are at 102.90/102.60 and 101.90 – Société Générale

The Dollar Index (DXY) has experienced a steady downtrend after facing strong resistance near 110.15 in January, Société Générale's FX analysts note.

Signals of a meaningful bounce are not yet visible

"It has recently given up the 200-DMA (105) and is drifting towards November low of 103.30. Daily MACD is within deep negative territory denoting a stretched down move; however, signals of a meaningful bounce are not yet visible. The MA at 105 could be first layer of resistance in case a brief rebound materializes."

"Below 103.30, next potential supports are at projections of 102.90/102.60 and 101.90."

10:25

AUD/USD: Consolidation above recent lows – BBH AUDUSD

AUD/USD is consolidating above recent lows, BBH FX analysts report.

RBA to pay particular attention to labor market development

"Australia’s February NAB business survey was mixed and does not move the dial on near-term RBA rate expectations. Business conditions rose 1 point to 4 while business confidence fell 6 points to -1 largely reversing January’s improvement."

"The employment sub-index edged down 1 point to 4 but remains above long-term average of around 3.0 indicative of encouraging labor market conditions. The RBA signaled it will pay particular attention to labor market development to guide future policy decision."

"Cash rate futures continue to imply almost 75bps of easing in the next twelve months with the next 25bps cut priced-in for May."

10:25

Silver Price Forecast: XAG/USD advances to near $32.50 as USD Index dives on US economic concerns

Silver price gains sharply to near $32.50 amid weakness in the US Dollar.
Escalating US economic concerns have kept the US Dollar on the backfoot.
Investors await the US CPI data for fresh cues on the interest rate outlook.

Silver price (XAG/USD) jumps sharply to near $32.50 in Tuesday’s European session. The white metal strengthens as the US Dollar (USD) faces a sharp sell-off, with investors turning cautious over the United States (US) economic outlook due to President Donald Trump’s tariff agenda. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, slumps to near 103.35, the lowest level seen in four months. The lower US Dollar makes precious metals, such as Silver, more attractive to investors.

Market participants worry that tariff policies by President Trump would result in an economic slowdown in the US. On Friday, Trump said, "There is a period of transition because what we are doing is very big.” Historically, periods of transition result in economic turbulence in the short term. Signs of heightened economic tensions improve the safe-haven demand for precious metals, such as Silver.

Meanwhile, investors await the US Consumer Price Index (CPI) data for February, which will be released on Wednesday. Investors will pay close attention to the US inflation data as it will influence market speculation for the Federal Reserve’s (Fed) monetary policy outlook. The US CPI data is estimated to have grown at a slower pace. Signs of a slowdown in inflationary pressures would boost market expectations that the Fed will cut interest rates in a May policy meeting. The likelihood for the Fed to cut interest rates in May has increased to 51% from 37% a day ago, according to the CME FedWatch tool. The scenario of lower interest rates bodes well for non-yielding assets, such as Silver.

Silver technical analysis

Silver price strives to revisit the key resistance of $33.40 plotted from the February 14 high. The 20-day Exponential Moving Average (EMA) near $32.07, continues to support the Silver price.

The 14-day Relative Strength Index (RSI) oscillates inside the 40.00-60.00 range, suggesting a sideways trend.

Looking down, the upward-sloping trendline from the August 8 low of $26.45 will act as key support for the Silver price around $30.00. While, the October 22 high of $34.87 will be the key barrier.

Silver daily chart

Silver FAQs

Why do people invest in Silver?

Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.

Which factors influence Silver prices?

Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.

How does industrial demand affect Silver prices?

Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.

How do Silver prices react to Gold’s moves?

Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.

10:18

USD/CNH: Downward pressure remains intact – UOB Group

USD is likely to trade in a 7.2400/7.2700 range vs Chinese Yuan (CNH). In the longer run, downward pressure remains intact; should USD break below 7.2260, the next level to watch is 7.2000, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Below 7.2260, the next level to watch is 7.2000

24-HOUR VIEW: "Our view for USD to trade sideways yesterday was incorrect. Instead of trading sideways, USD rose to a high of 7.2697, closing at 7.2637 (+0.23%). Despite the advance, there has been no significant increase in momentum, and instead of continuing to rise, USD is more likely to trade in a 7.2400/7.2700 range."

1-3 WEEKS VIEW: "In our most recent narrative from last Thursday (06 Mar, spot at 7.2440), we indicated that “the downward pressure remains intact, and should USD break below and hold below 7.2260, the next level to watch is 7.2000.” Since then, USD has not been able to make further headway on the downside. That said, we will continue to hold the same view for now, provided that the ‘strong resistance’ at 7.2800 (no change in level) is not breached."

10:15

USD/JPY: Upside risk to wages supports the increasing trend in private demand – BBH USDJPY

USD/JPY is drifting lower on broad USD weakness, BBH FX analysts report.

USD broad weakness pushed USD/JPY down

"Japan’s final Q4 real GDP print was revised 0.1pts lower to 0.6% q/q on weaker private demand activity. Private demand fell -0.3% q/q in Q4 compared to a preliminary estimate of -0.1%. The sharper decline was driven by residential investment which dropped -0.2% q/q from an initial read of 0.1%."

"Household consumption was flat from an initial estimate of 0.1% while non-residential investment rose 0.6% q/q from an initial estimate of 0.5%. Going forward, upside risk to wage growth supports the moderate increasing trend in private demand."

10:13

Gold pops up whilst Greenback deepens losses again

Gold flirts with a 1% surge on Tuesday, paring back initial losses for this week.
Headlines on German defense spending possible deal hit the US Dollar and support Gold.
Traders are bracing for the upcoming Fed meeting on March 19.

Gold’s price (XAU/USD) is popping back above the $2,900 round level and even trades above $2,910 at the time of writing on Tuesday. The move comes in a domino effect originated by the headline from the German Green coalition leaders, who said this morning to have given the green light to a deal on defense spending. That boosted confidence in the Euro (EUR) and triggered a new leg lower in the US Dollar Index (DXY), which opened the door for Bullion to surge.

Meanwhile, traders are still cautious after a tariff war is spiraling out of control outside the United States (US). Canada has hit several Chinese imports, which met with counter-tariffs from China on Canadian goods such as canola Oil. The demands from US President Donald Trump are being met for now as Canada and Mexico can see further easing on their own tariffication if they also impose levies on Chinese goods.

Daily digest market movers: Thai Baht flying

US President Donald Trump’s signals that the economy could first suffer as he reshapes trade policy with tariffs stoked concerns about a potential recession. The precious metal, a traditional haven asset, can face selling pressure during sudden market selloffs, Bloomberg reports.
Thailand’s currency, Thai Bhat (THB), has received a boost this year from a rally in Gold prices. Strategists warn though that the rally will not be enough to protect the country from tariff risks. The THB is up around 1.2% against the US Dollar this year, more than double the gain of a broad gauge of Asian currencies. A key reason is Thailand’s role as a Gold-trading hub in the region, which boosted confidence in the currency, Bloomberg reports.
The CME Fedwatch Tool sees a 95.0% chance for no interest rate changes in the upcoming Fed meeting on March 19. However, the chances of a rate cut at the May 7 meeting increase to 47.8%.

Technical Analysis: Opening a window

For once, it is not a headline on tariffs which is boosting the precious metal. This time, it is a domino effect where a weaker US Dollar opens the door for Gold to move higher. There are not yet aspirations for a new all-time high, but it is good to see the initial weekly loss erased and Gold returning to flat on the week.

Gold is back above the $2,900 round level and, from an intraday technical perspective, it is back above the daily Pivot Point at $2,895. At the time of writing, Gold is knocking on the door of the R1 resistance near $2,910. Once through there, the intraday R2 resistance at $2,933 comes into focus on the upside, converging with last week’s highs.

On the downside, the firm support stands at $2,880, which has held Gold’s price on Monday and Tuesday. In case that level breaks, look at the S1 support around $2,873. A small leg lower could target $2,857, the convergence of the S2 support and the March 3 low.

XAU/USD: Daily Chart

Gold FAQs

Why do people invest in Gold?

Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

Who buys the most Gold?

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

How is Gold correlated with other assets?

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

What does the price of Gold depend on?

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

10:01

USD/JPY: The next technical target is at 146.05 – UOB Group USDJPY

US Dollar (USD) could continue to decline vs Japanese Yen (JPY), but it remains to be seen if it has enough momentum to reach 146.05. In the longer run, USD is expected to continue to decline; the next technical target is at 146.05, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

USD is expected to continue to decline

24-HOUR VIEW: "USD fell to a low of 146.94 last Friday and then rebounded to close largely unchanged at 148.03 (+0.05). In early Asian trade yesterday, when USD was at 147.70, we indicated that 'slowing downward momentum suggests any decline is unlikely to reach 147.00 again.' We underestimated the momentum as USD breached both the support levels and plunged to 146.61. Today, USD could continue to decline, but it remains to be seen if it has enough momentum to reach 146.05. To sustain the momentum, USD must remain below 147.60 (there is another resistance at 147.15)."

1-3 WEEKS VIEW: "Last Friday, USD fell and exceeded our technical target at 147.00. Yesterday, 10 Mar, when USD was at 147.70, we highlighted the following: 'While further USD weakness is not ruled out, the 147.00 level is acting as a kind of ‘low water mark’ now, meaning USD would need remain below this level before further declines are likely.' USD then plummeted to 146.61, closing at 147.26 (-0.52%). Although USD did not close below 147.00, the sharp drop below 147.00 has led to an increase in momentum. From here, we continue to expect USD to weaken, with the next technical target at 146.05. We will maintain our view as long as 148.25 (‘strong resistance’ level was at 148.80 yesterday) is not breached."

10:00

United States NFIB Business Optimism Index came in at 100.7, below expectations (101) in February

09:57

EUR/USD holds strong above 1.0900 – BBH EURUSD

EUR/USD is trading firmer above 1.0900. Germany’s CDU/CSU and SPD coalition are in high-stakes negotiations with the Green party to get the draft debt package passed in the current parliament, BBH FX analysts report.

Coalition needs the support of the Green party for a constitutional amendment

"Germany's new parliament is set to convene by March 25. As part of a counterproposal, the Greens want to raise the threshold for defense spending exemptions from debt rules to 1.5% of GDP compared to 1.0% in the current plan. The CDU/CSU and SPD coalition need the support of the Green party to have the required two-thirds majority for a constitutional amendment."

"As a background, the German government could invest as much as €1 trillion over the next decade. The fiscal package introduced last week includes €500 billion for infrastructure spending and a special measure to amend the constitution to exempt defense spending above 1% of GDP from the constitutional debt brake."

"To appreciate the magnitude of this proposal, Germany invested €1.5 trillion over two decades following the reunification of East and West Germany."

09:50

Spain 9-Month Letras Auction increased to 2.269% from previous 2.248%

09:50

Spain 3-Month Letras Auction dipped from previous 2.431% to 2.359%

09:48

EUR/USD refreshes four-month high as US Dollar slumps on US slowdown fears EURUSD

EUR/USD advances above 1.0900 as the US Dollar extends its downside amid growing concerns over the US economic outlook.
The Euro gains as German Greens agreed to support defense spending plans.
Investors await the US JOLTS Job Openings data for January and the CPI data for February.

EUR/USD posts a fresh four-month high above 1.0900 in European trading hours on Tuesday. The major currency pair strengthens as the US Dollar (USD) underperforms its peers amid escalating fears of an economic slowdown in the United States (US). The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, refreshes the four-month low near 103.30.

Investors have dumped the US Dollar lately amid caution that the US economy could face economic shocks in the near term due to President Donald Trump’s “America First” policies. Market participants had been expecting Trump's policies to be inflationary and pro-growth in the long term but now see severe economic turbulence in the near term, assuming that US employers will bear the pressure of higher tariffs.

Business owners are unlikely to bear the wholesome tariff burden and will pass on the impact to end consumers. Such a scenario would result in a sharp decline in the overall demand as higher prices would diminish the purchasing power of consumers. Deepening fears of Trump tariff-led slowdown have also led to an increase in market expectations that the Federal Reserve (Fed) will reduce interest rates in the May policy meeting. The likelihood for the Fed to cut interest rates in May has increased to 51% from 37% a day ago, according to the CME FedWatch tool.

For more cues on the Fed’s monetary policy outlook, investors will focus on the US Consumer Price Index (CPI) data for February, which will be released on Wednesday. The inflation data is expected to decelerate but remain above the Fed’s target of 2%. On Friday, Fed Chair Jerome Powell said in an economic forum at the University of Chicago Booth School that the Fed policy is not on a “preset course,” and we can maintain “policy restraint for longer if inflation progress stalls”.

In Tuesday’s session, investors will pay close attention to the US JOLTS Job Openings data for January, which will be published at 14:00 GMT. Economists expect US employers to have posted 7.75 million new jobs, marginally higher than the 7.6 million seen in December.

Daily digest market movers: EUR/USD strengthens as Euro outperforms

The strength in the EUR/USD pair is also driven by the Euro’s (EUR) outperformance against its peers. The Euro advances in hopes that Franziska Brantner-led-German Green Party would support clearing the defense spending deal, which will be discussed on Thursday. Hopes for Greens to agree to stretch Germany’s borrowing limit accelerated after positive commentary from Franziska Brantner in an interview with Bloomberg on Tuesday during European hours.
“Of course we are ready to negotiate,” the Green party’s co-head Franziska Brantner said and added, “The situation is dire in Ukraine and we really need Europe to speed up its own defense spending.” Earlier, Greens vowed to oppose restricting ‘debt reforms’. On Monday, Branter said that their party will not likely allow the next Chancellor Friedrich Merz and Social Democratic Party’s (SDP) co-leader Lars Klingbeil to “abuse a difficult European security situation”.
The shared currency had been performing strongly for almost two weeks as an increase in Germany’s spending capability by widening “the debt brake” would stimulate the economy, which had been fractured and contracted in the last two years.
Additionally, German spending plans have also forced traders to reassess bets supporting the European Central Bank (ECB) to cut interest rates two times more by the summer. The ECB has already cut its borrowing rates twice this year, and traders had fully priced in two more interest rate cuts amid firm confidence that the Eurozone inflation will sustainably return to the desired rate of 2% this year and fears of a slowdown due to potential US tariffs.

Technical Analysis: EUR/USD climbs above 1.0900

EUR/USD jumps above 1.0900 on Tuesday. The major currency pair strengthened after a decisive breakout above the December 6 high of 1.0630 last week. The long-term outlook of the major currency pair is bullish as it holds above the 200-day Exponential Moving Average (EMA), which trades around 1.0640.

The 14-day Relative Strength Index (RSI) jumps to near 75.00, indicating a strong bullish momentum.

Looking down, the December 6 high of 1.0630 will act as the major support zone for the pair. Conversely, the psychological level of 1.1000 will be a key barrier for the Euro bulls.

Euro FAQs

What is the Euro?

The Euro is the currency for the 19 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

What is the ECB and how does it impact the Euro?

The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

How does inflation data impact the value of the Euro?

Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.

How does economic data influence the value of the Euro?

Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.

How does the Trade Balance impact the Euro?

Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

09:46

NZD/USD: Unlikely to break the strong support level at 0.5660 – UOB Group NZDUSD

New Zealand Dollar (NZD) is likely to edge lower vs US Dollar (USD), but it is unlikely to break the strong support level at 0.5660. In the longer run, there has been no further increase in upward momentum; a break of 0.5660 would mean that the recovery is not reaching 0.5775, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

No further increase in upward momentum

24-HOUR VIEW: "We noted a slight increase in downward momentum yesterday. However, we indicated that 'this is likely to lead to a lower range of 0.5685/0.5730 instead of a sustained decline.' Our view did not turn out as NZD traded between 0.5691 and 0.5742. There has been a slight increase in downward momentum. Today, NZD is likely to edge lower, but it is unlikely to break the strong support ’level at 0.5660 (there is another support level at 0.5680). On the upside, resistance levels are at 0.5715 and 0.5730."

1-3 WEEKS VIEW: "Last Thursday (06 Mar, spot at 0.5720), we highlighted that the 'current price movements are likely part of a recovery phase that could reach 0.5775.' NZD subsequently rose to 0.5760 and then pulled back. Yesterday (10 Mar, spot at 0.5710), we indicated that 'There has been no further increase in momentum and should NZD break below 0.5660 (‘strong support’ level), it would mean that 0.5775 is out of reach this time round. There is no change in our view."

09:32

ECB’s Rehn: Forecasts, indicators of core inflation suggest that inflation will align with 2% target

09:32

Silver price today: Silver rises, according to FXStreet data

Silver prices (XAG/USD) rose on Tuesday, according to FXStreet data. Silver trades at $32.44 per troy ounce, up 0.98% from the $32.13 it cost on Monday.

Silver prices have increased by 12.28% since the beginning of the year.

Unit measure	Silver Price Today in USD
Troy Ounce	32.44
1 Gram	1.04

The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 89.72 on Tuesday, down from 89.93 on Monday.

Silver FAQs

Why do people invest in Silver?

Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.

Which factors influence Silver prices?

Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.

How does industrial demand affect Silver prices?

Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.

How do Silver prices react to Gold’s moves?

Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.

(An automation tool was used in creating this post.)

09:29

SEK: Some dovish risks after hawkish repricing – ING

The Riksbank’s Executive Board testifies before parliament this morning, and that can bring about some market-moving headlines. Markets have heavily shifted on the hawkish side of the spectrum and now expect the Bank to be done with easing, ING's FX analyst Francesco Pesole notes.

EUR/SEK remains incidentally quite cheap in short term

"A key driver of this shift was the set of hot inflation figures for February, but we suspect markets may be underestimating both the volatility of CPI data and the impact of US tariffs. The risks are skewed to the dovish side – and to the downside for SEK – ahead of today’s parliamentary testimony."

"EUR/SEK remains incidentally quite cheap in short-term valuation terms and signs of instability in EU sentiment can trigger a rebound above 11.0 this week. We still favour a stabilisation in the 11.0-11.20 range in the next two quarters."

09:25

EUR/USD: US cyclical growth narrative becomes an increasingly key driver – Danske Bank EURUSD

EUR/USD remains in the low-1.08-1.09 range in a relatively quiet start to the week, Danske Bank's FX analysts Kristoffer Kjær Lomholt and Filip Andersson report.

Further upside risk in EUR/USD

"Despite declining US yields amid US growth concerns, the broad USD remained well-supported during the US session on risk-off sentiment. In Germany, reports suggest the Greens may withhold support for the debt package in parliament, despite its alignment with their election platform. We still expect them to back it eventually."

"While much of the EUR-optimism appears priced in, confirmation of the debt package or a potential ceasefire deal in Ukraine could provide another boost. Today, focus will be on January JOLTS job openings, offering insight into the US labour market. In RtM USD this week, we analyse the potential implications of a 'Mar-a-Lago Accord."

"While such an event could carry significant consequences for the USD, we see it as unlikely. We maintain a tactical bias toward further upside risk in EUR/USD, with the US cyclical growth narrative becoming an increasingly key driver."

09:13

NZD/USD Price Forecast: Holds position above 0.5700 near 50-day EMA support NZDUSD

NZD/USD trades within the consolidation phase, with the pair moving within a rectangular pattern.
A bullish shift would be indicated if the 9-day EMA successfully breaks above the 50-day EMA.
The immediate support appears at the 50-day EMA of 0.5697 level, aligned with the nine-day EMA at 0.5696 level.

The NZD/USD pair holds gains after recovering daily losses, trading around 0.5710 during European trading hours on Tuesday. Technical analysis of the daily chart indicates a consolidation phase, with the pair moving within a rectangular pattern.

Additionally, nine-day and 50-day Exponential Moving Average (EMA) align together, it generally signals a period of equilibrium in the market where short-term and medium-term trends are converging. The 9-day EMA was below and is now attempting to break above the 50-day EMA, it might signal a bullish shift if it eventually crosses above.

However, the 14-day Relative Strength Index (RSI) remains above the 50 mark, suggesting that bullish bias is in play.

On the upside, the NZD/USD pair could test the upper trendline of the rectangle at 0.5760 level, followed by the three-month high of 0.5794, reached on January 24. A break above this crucial resistance zone could cause the emergence of the bullish bias and support the NZD/USD pair to explore the region around the four-month high at 0.5922 level, recorded in December 2024.

The immediate support is seen at the 50-day EMA of 0.5697 level, aligned with the nine-day EMA at 0.5696 level. A successful break below these levels could weaken the short-term price momentum and put downward pressure on the NZD/USD pair to test the psychological level of 0.5600, followed by the lower trendline of the rectangle at 0.5590 level. Further support appears around 0.5516—its lowest level since October 2022, recorded on February 3.

NZD/USD: Daily Chart

New Zealand Dollar PRICE Today

The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies today. New Zealand Dollar was the strongest against the US Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.68%	-0.38%	-0.03%	-0.14%	-0.19%	-0.13%	-0.05%
EUR	0.68%		0.31%	0.67%	0.55%	0.48%	0.56%	0.64%
GBP	0.38%	-0.31%		0.34%	0.24%	0.18%	0.22%	0.34%
JPY	0.03%	-0.67%	-0.34%		-0.12%	-0.18%	-0.12%	-0.02%
CAD	0.14%	-0.55%	-0.24%	0.12%		-0.05%	0.00%	0.09%
AUD	0.19%	-0.48%	-0.18%	0.18%	0.05%		0.07%	0.15%
NZD	0.13%	-0.56%	-0.22%	0.12%	-0.00%	-0.07%		0.09%
CHF	0.05%	-0.64%	-0.34%	0.02%	-0.09%	-0.15%	-0.09%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).

09:09

AUD/USD: Under mild downward pressure and can test 0.6250 – UOB Group AUDUSD

Australian Dollar (AUD) is under mild downward pressure and could test 0.6250 vs US Dollar (USD); the major support at 0.6215 is not expected to come into view. In the longer run, current price movements are likely part of a range trading phase between 0.6215 and 0.6355, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Major support at 0.6215 is not expected to come into view

24-HOUR VIEW: "Following the drop in AUD to 0.6283 last Friday, we pointed out yesterday that 'The decline lacks momentum, and the current price movements appear to be part of a range trading phase, most likely between 0.6280 and 0.6330.' Our view was incorrect, as after testing the top of our expected range (high of 0.6331), AUD fell sharply to a low of 0.6265. Further declines are not ruled out, but given that momentum is not strong, any weakness is likely limited to a test of 0.6250. The major support at 0.6215 is not expected to come into view. Resistance is at 0.6295; a breach of 0.6320 would indicate that the current mild downward pressure has eased."

1-3 WEEKS VIEW: "After expecting AUD to recover since late last week, we indicated yesterday (10 Mar, spot at 0.6305) that 'The buildup in momentum is slowing, and a breach of 0.6265 (‘strong support’ level) would suggest AUD is likely to trade in a range instead of recovering.' During the NY session, AUD fell to a low of 0.6265. While our ‘strong support’ level has not been clearly breached, upward momentum has largely faded. The current price movements are likely part of a range trading phase between 0.6215 and 0.6355."

08:57

USD: Investor worries on US grow – ING

The week has started with more risk off, with the S&P500 losing more than 2.5% on Monday. This time, the US equity slump was not isolated and European equities also suffered. As a result, the dollar hung on to its haven status better than when US-EU equities were diverging, and we saw some textbook risk off trading in FX: JPY, USD, EUR and CHF gaining against high-beta and commodity currencies, ING's FX analyst Francesco Pesole notes.

Balance of risks for the coming weeks has shifted to the upside

"It remains hard to pick a bottom in the US sentiment slump and the ramifications for US equities. Markets are questioning both elevated valuations and the broader US investment/macro environment, and while data can stir near-term sentiment, further loss of confidence may need to be tempered by the US administration itself."

"Indeed, scattered calls for a US recession in the first quarter – even if probably overblown – aren’t helping. Today’s JOLTS job opening figures will be watched very carefully. The Fed’s focus on the jobs market means that there will be high sensitivity for short-dated USD swaps to today’s figures. Expectations are for job openings to have flattened in January, although greater focus may be on the layoff figures. We’ll also watch closely the quits rate, which is a good leading indicator of wage growth."

"Our view is that the dollar is embedding quite a lot of negatives at the moment and the c. Nevertheless, in this jittery market environment, we are not ready to pick the bottom in the dollar before key data events have passed."

08:56

USD/JPY Price Forecast: Bears turn cautious as focus shifts to US inflation figures USDJPY

USD/JPY drops to a fresh multi-month low and is pressured by a combination of factors.
BoJ rate hike bets and the risk-off mood underpin the JPY despite weaker Japan Q4 GDP.
Dovish Fed expectations keep the USD depressed and further exert pressure on the pair.

The USD/JPY pair prolongs its recent well-established downtrend and drops to the lowest level since early October, around mid-146.00s during the first half of the trading action on Tuesday. Concerns about US President Donald Trump's tariffs and a potential global trade war continue to weigh on investors' sentiment. This is evident from a generally weaker tone around the equity markets, which, along with hawkish Bank of Japan (BoJ) expectations, underpins the safe-haven JPY. Apart from this, the underlying bearish tone surrounding the US Dollar (USD) exerts additional downward pressure on the currency pair.

Traders now seem convinced that the BoJ will hike interest rates again amid the broadening inflation in Japan and hopes that bumper wage hikes seen last year will continue this year. In fact, BoJ Deputy Governor Shinichi Uchida signaled last week that the central bank was likely to raise interest rates at a pace in line with dominant views among market players and economists. Moreover, a sluggish demand at an auction of five-year debt, amid the view that rates will keep going up, lifted the yield on the benchmark 10-year Japanese government bond (JGB) to its highest level since October 2008 at the start of the current week.

This, to a larger extent, offsets the downward revision of Japan's GDP print, which showed that the economic growth slowed to 2.2% on an annualized basis in the fourth quarter. This was lower than the initial estimate of a 2.8% rise, though it does little to dent demand for the JPY. The USD, on the other hand, languishes near its lowest level since November amid concerns about a tariff-driven slowdown in the US, which might force the Federal Reserve (Fed) to lower borrowing costs multiple times this year. This keeps the US Treasury bond yields depressed and the resultant narrowing of the US-Japan rate differential favors the JPY bulls.

Traders, however, might opt to wait for this week's release of the latest US inflation figures before placing fresh directional bets. The US Consumer Price Index (CPI) and the Producer Price Index (PPI) are due on Wednesday and Thursday, respectively. The crucial data will play a key role in influencing expectations about the Fed's rate-cut path, which, in turn, will drive the USD demand and provide some meaningful impetus to the USD/JPY pair. In the meantime, the US Job Openings and Labor Turnover Survey (JOLTS) could produce short-term opportunities later during the North American session on Tuesday.

USD/JPY daily chart

fxsoriginal

Technical Outlook

From a technical perspective, last week's breakdown below the 148.70-148.60 horizontal support was seen as a key trigger for bearish traders. That said, the Relative Strength Index (RSI) on the daily chart remains close to oversold territory and makes it prudent to wait for some near-term consolidation or a modest bounce before positioning for further losses. Nevertheless, the broader setup suggests that the path of least resistance for the USD/JPY pair remains to the downside.

Hence, any meaningful recovery beyond the daily swing high, around the 147.40 region, could be seen as a selling opportunity near the 148.00 round figure. This, in turn, should cap the USD/JPY pair near the aforementioned support breakpoint, now turned strong barrier near the 148.60-148.70 area. A sustained strength beyond the latter, however, might trigger a short-covering rally towards the 149.00 mark en route to the 149.70-149.75 region and the 150.00 psychological mark.

On the flip side, the daily swing low, around the 146.55-146.50 region, now seems to protect the immediate downside, below which the USD/JPY pair could accelerate the fall further towards the 146.00 round figure. The downward trajectory could eventually drag spot prices to the 145.00 psychological mark with some intermediate support near the 145.40-145.35 zone.

08:52

GBP/USD: Upward momentum is slowing – UOB Group GBPUSD

Pound Sterling (GBP) is likely to trade in a range between 1.2845 and 1.2930. In the longer run, upward momentum is slowing; a breach of 1.2830 would mean that the 1.2975 target is out of reach this time around, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Below 1.2830, the 1.2975 target is out of reach

24-HOUR VIEW: "Last Friday, GBP rose to a high of 1.2945. Yesterday, Monday, when GBP was at 1.2930, we highlighted the following: 'Although there has been no clear increase in upward momentum, there is a chance for GBP to test the major resistance at 1.2975 before the risk of a pullback increases. A sustained break above 1.2975 appears unlikely. On the downside, should GBP break below 1.2870 (minor support at 1.2900), it would suggest that it has moved into a range trading phase.' However, GBP rose less than expected, pulling from 1.2946 to 1.2862. Today, we expect GBP to trade in a range between 1.2845 and 1.2930."

1-3 WEEKS VIEW: "In our most recent narrative from last Thursday (07 Mar, spot at 1.2890), we highlighted that “the outlook for GBP remains positive” and 'the next technical target is at 1.2975.' Yesterday, Monday, GBP rose slightly above last week’s high of 1.2943 and then pulled back to close lower by 0.33% at 1.2879. Upward momentum is slowing, and a breach of 1.2830 (no change in ‘strong support’ level from yesterday) would mean that 1.2975 is out of reach this time around."

08:38

EUR: German parliamentary hurdles not bothering the euro – ING

Germany’s Chancellor-to-be, Friedrich Merz, is facing obstacles to his plan to push through constitutional reforms to the debt brake before 25 March, when the new parliament is seated. Yesterday, the Green party – needed for the 2/3 majority – announced it would oppose the defence spending plan and requested greater environmental guarantees, ING's FX analyst Francesco Pesole notes.

An exploration above 1.090 may be on the cards

"The euro dropped on the headline but quickly bounced back when it was reported that the Greens remain open to talks and CDU officials indicated optimism towards an agreement. The FX market continues to price in a best-case scenario for the euro, with the spending plan going ahead."

"The eurozone calendar is light this week so developments in German politics and Ukraine-Russia peace talks will remain quite central. Still, EUR/USD should mostly be stirred by news coming from the US. As a secondary driver, ECB members are starting to deliver their post-meeting remarks. Yesterday, hawk Joachim Nagel said the ECB is not moving on 'autopilot' on cuts and it is hard to speculate on April’s move. We’ll hear from dovish-leaning Olli Rehn today and a plethora of other Governing Council members later this week."

"We retain a preference for lower EUR/USD, but we may not be at the peak just yet as US domestic risks linger and the euro’s fundamentals have improved. An exploration above 1.090 may be on the cards, but 1.070 remains the most reasonable target for a month ahead, in our view."

08:37

EUR/GBP advances to near 0.8450 as EU moves to increase defense spending EURGBP

EUR/GBP extends its winning streak as the European Union considers boosting defense spending through joint borrowing and EU funds.
Germany’s Green Party may negotiate a defense spending agreement with the expected ruling coalition, led by Chancellor-in-waiting Friedrich Merz.
The Pound Sterling found support after BoE’s Mann dismissed the need for a “gradual and cautious” approach to monetary easing.

EUR/GBP continues its winning streak that began on March 3, trading around 0.8440 during the European hours on Tuesday. The currency cross continues to strengthen as the European Union (EU) explores ways to bolster defense spending through joint borrowing, EU funds, and an expanded role for the European Investment Bank (EIB), with key decisions expected by June.

Germany’s Green Party is open to negotiations and aims to reach an agreement by the end of the week in its dispute over defense spending with the country’s likely next ruling coalition, led by Chancellor-in-waiting Friedrich Merz. “Of course, we are ready to negotiate,” said Green Party co-leader Franziska Brantner in a Bloomberg TV interview on Tuesday.

Earlier, German leaders agreed to relax the borrowing limit, known as the “debt brake,” and establish a €500 billion infrastructure fund to boost defense spending and drive economic growth. Meanwhile, Italy is set to propose a European guarantee scheme that could unlock up to €200 billion ($216.48 billion) in investments for the defense and aerospace industries, according to Reuters.

These large-scale economic stimulus measures have prompted traders to scale back expectations of two additional interest rate cuts by the European Central Bank (ECB) this year, as the potential inflationary impact could limit the scope for further easing.

However, the upside for the EUR/GBP cross may be capped as the Pound Sterling (GBP) remains supported by last week’s cautious remarks from Bank of England (BoE) Monetary Policy Committee (MPC) member Catherine Mann. She dismissed the need for a “gradual and cautious” approach to monetary easing, citing rising global economic volatility.

Before Mann’s comments, four BoE officials, including Governor Andrew Bailey, had advocated for a measured approach to reducing monetary policy restrictiveness, emphasizing that inflation persistence is unlikely to ease “on its own accord.”

German economy FAQs

What is the effect of the German Economy on the Euro?

The German economy has a significant impact on the Euro due to its status as the largest economy within the Eurozone. Germany's economic performance, its GDP, employment, and inflation, can greatly influence the overall stability and confidence in the Euro. As Germany's economy strengthens, it can bolster the Euro's value, while the opposite is true if it weakens. Overall, the German economy plays a crucial role in shaping the Euro's strength and perception in global markets.

What is the political role of Germany within the Eurozone?

Germany is the largest economy in the Eurozone and therefore an influential actor in the region. During the Eurozone sovereign debt crisis in 2009-12, Germany was pivotal in setting up various stability funds to bail out debtor countries. It took a leadership role in the implementation of the 'Fiscal Compact' following the crisis – a set of more stringent rules to manage member states’ finances and punish ‘debt sinners’. Germany spearheaded a culture of ‘Financial Stability’ and the German economic model has been widely used as a blueprint for economic growth by fellow Eurozone members.

What are German Bunds?

Bunds are bonds issued by the German government. Like all bonds they pay holders a regular interest payment, or coupon, followed by the full value of the loan, or principal, at maturity. Because Germany has the largest economy in the Eurozone, Bunds are used as a benchmark for other European government bonds. Long-term Bunds are viewed as a solid, risk-free investment as they are backed by the full faith and credit of the German nation. For this reason they are treated as a safe-haven by investors – gaining in value in times of crisis, whilst falling during periods of prosperity.

What are German Bund Yields?

German Bund Yields measure the annual return an investor can expect from holding German government bonds, or Bunds. Like other bonds, Bunds pay holders interest at regular intervals, called the ‘coupon’, followed by the full value of the bond at maturity. Whilst the coupon is fixed, the Yield varies as it takes into account changes in the bond's price, and it is therefore considered a more accurate reflection of return. A decline in the bund's price raises the coupon as a percentage of the loan, resulting in a higher Yield and vice versa for a rise. This explains why Bund Yields move inversely to prices.

What is the Bundesbank?

The Bundesbank is the central bank of Germany. It plays a key role in implementing monetary policy within Germany, and central banks in the region more broadly. Its goal is price stability, or keeping inflation low and predictable. It is responsible for ensuring the smooth operation of payment systems in Germany and participates in the oversight of financial institutions. The Bundesbank has a reputation for being conservative, prioritizing the fight against inflation over economic growth. It has been influential in the setup and policy of the European Central Bank (ECB).

08:31

EUR/USD: Chance of reaching 1.0945 can decrease quickly – UOB Group EURUSD

Euro (EUR) is likely to trade sideways between 1.0800 and 1.0880 vs US Dollar (USD). In the longer run, EUR must push higher soon, or the chance of it reaching 1.0945 will decrease quickly, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Below 1.0720, rally can take a breather

24-HOUR VIEW: "After EUR rose to a high of 1.0888 last Friday, we indicated yesterday that 'Despite the rise, there has been no clear increase in upward momentum.' We indicated that 'instead of continuing to rise, EUR is more likely to trade sideways between 1.0800 and 1.0890.' EUR subsequently traded in a narrower range than expected (1.0804/1.0874), closing unchanged at 1.0832. There has been no increase in either upward or downward momentum, and we continue to expect EUR to trade sideways today, most likely between 1.0800 and 1.0880."

1-3 WEEKS VIEW: "We shifted our view to positive early last week. Tracking the subsequent sharp rally, we indicated last Friday (07 Mar, spot at 1.0790) that “while the uptrend remains intact, at this stage, it is unclear for now if EUR can reach 1.0945.” We continue to hold the same view, but upward momentum is showing signs of slowing, and EUR must push higher soon, or the chance of it reaching 1.0945 will decrease quickly. On the downside, a breach of 1.0720 (‘strong support’ level previously at 1.0690) would suggest that the sharp rally is ready to take a breather."

08:30

Crude oil price today: WTI price bullish at European opening

West Texas Intermediate (WTI) Oil price advances on Tuesday, early in the European session. WTI trades at $65.95 per barrel, up from Monday’s close at $65.67. Brent Oil Exchange Rate (Brent crude) is also up, advancing from the $68.99 price posted on Monday, and trading at $69.28.

WTI Oil FAQs

What is WTI Oil?

WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.

What factors drive the price of WTI Oil?

Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.

How does inventory data impact the price of WTI Oil

The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.

How does OPEC influence the price of WTI Oil?

OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.

Disclaimer: West Texas Intermediate (WTI) and Brent oil prices mentioned above are based on FXStreet data feed for Contracts for Differences (CFDs).

(An automation tool was used in creating this post.)

08:08

Pound Sterling holds onto gains against US Dollar ahead of US inflation data

The Pound Sterling trades firmly against the US Dollar around 1.2900 ahead of the US inflation data for February.
Fed dovish bets have accelerated on US President Trump's tariffs-led slowdown fears.
BoE officials support a “gradual and cautious” interest rate cut approach.

The Pound Sterling (GBP) turns sideways after a strong rally in over a month around 1.2900 against the US Dollar (USD) in European trading hours on Tuesday. The GBP/USD pair trades firmly as the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, struggles above the four-month low of 103.45 ahead of the United States (US) Consumer Price Index (CPI) data for February, which will be released on Wednesday.

Investors will pay close attention to the US inflation data as it will influence market speculation over the Federal Reserve’s (Fed) monetary policy outlook. Year-on-year headline inflation is estimated to have grown by 2.9%, slower than 3% in January. In the same period, the core CPI – which excludes volatile food and energy prices – is expected to have decelerated to 3.2% from the prior release of 3.3%.

Lately, traders have raised bets supporting the Fed to start reducing interest rates in May amid fears of US President Donald Trump's tariff agenda-led slowdown. According to the CME FedWatch tool, the likelihood for the Fed to cut interest rates in May has increased to 51% from 37% a day ago.

However, a slew of Fed officials, including Chair Jerome Powell, has been guiding a “wait and see” approach amid a lack of clarity on President Donald Trump’s tariff and taxation policies. On Friday, Jerome Powell said, “Uncertainty around Trump administration policies and their economic effects remains high, and the net effect of trade, immigration, fiscal, and regulation policy is what matters for the economy and the monetary policy.”

In Tuesday’s session, investors will focus on the US JOLTS Job Openings data for January, which will be published at 14:00 GMT. US employers are expected to have posted 7.75 million new jobs, slightly higher than the 7.6 million seen in December.

Daily digest market movers: Pound Sterling ticks higher against its peers

The Pound Sterling trades higher against its major peers on Tuesday as traders become increasingly confident that the Bank of England (BoE) will keep interest rates at their current levels for longer. Traders are confident about the BoE maintaining a restrictive monetary policy stance for longer amid strong wage growth in the United Kingdom (UK), which fuels inflation in the services sector.
Last week, four BoE policymakers, including Governor Andrew Bailey, guided before the Parliamentary Treasury Committee a gradual path for “unwinding monetary policy restrictiveness” as the inflation persistence is less likely to fade “on its own accord.”
On the contrary, BoE Monetary Policy Committee (MPC) Catherine Mann argues in favor of a swift monetary expansion approach due to “substantial volatility” coming from financial markets, especially from “cross-border spillovers”.
This week, investors will focus on the UK monthly Gross Domestic Product (GDP) and the factory data for January, which will be released on Friday. The UK economy is estimated to have grown at a moderate pace of 0.1%, compared to 0.4% in December.

Technical Analysis: Pound Sterling sees more upside above 61.8% Fibo retracement at 1.2930

The Pound Sterling gathers strength to break above the 61.8% Fibonacci retracement plotted from the late September high to mid-January low around 1.2930 on Tuesday. The long-term outlook of the GBP/USD pair has turned bullish as it holds above the 200-day Exponential Moving Average (EMA), which is around 1.2692.

The 14-day Relative Strength Index (RSI) holds above 60.00, suggesting a strong bullish momentum.

Looking down, the 50% Fibo retracement at 1.2767 and the 38.2% Fibo retracement at 1.2608 will act as key support zones for the pair. On the upside, the psychological 1.3000 level will act as a key resistance zone.

Pound Sterling FAQs

What is the Pound Sterling?

The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).

How do the decisions of the Bank of England impact on the Pound Sterling?

The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.

How does economic data influence the value of the Pound?

Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.

How does the Trade Balance impact the Pound?

Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

07:56

WTI rises toward $66.00, gains seem limited amid tariff concerns, economic slowdown fears

WTI price could lose ground as tariff concerns could slow economic growth.
President Donald Trump referred to the economy as being in a "transition period," hinting at a potential slowdown.
Oil demand concerns rise due to deepening deflationary pressures in China, the world’s top Oil importer.

West Texas Intermediate (WTI) Oil price edges higher on Tuesday, trading around $65.90 per barrel during early European hours after experiencing losses in the previous session. However, crude Oil prices faced headwinds amid concerns that United States (US) tariffs could slow economic growth and reduce Oil demand.

Tariffs imposed—and later delayed—by US President Donald Trump on major oil suppliers, including Canada and Mexico, along with China’s retaliatory measures, have raised fears of a global economic slowdown. Both China and Canada have responded with their tariffs.

Ontario’s Premier Doug Ford announced that starting Monday, electricity prices for 1.5 million American homes and businesses will rise by 25% in retaliation for Trump’s trade policies. Meanwhile, China implemented retaliatory tariffs of up to 15% on select US agricultural products on Monday, following last week’s US tariff hike from 10% to 20% on Chinese imports.

Additionally, President Trump characterized the economy as being in a "transition period," hinting at a potential slowdown. Investors took his remarks as an early signal of possible economic turbulence in the near future.

Economic weakness in China, the world’s top Oil importer, further pressured crude prices. Recent data suggested deepening deflationary pressures despite government stimulus efforts, with February marking the sharpest decline in consumer prices in 13 months and the 29th consecutive monthly drop in factory-gate prices.

Russian Deputy Prime Minister Alexander Novak announced on Friday that the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, had agreed to start increasing Oil production in April. However, he cautioned that the decision could be reversed if market imbalances arise.

WTI Oil FAQs

What is WTI Oil?

WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.

What factors drive the price of WTI Oil?

Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.

How does inventory data impact the price of WTI Oil

The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.

How does OPEC influence the price of WTI Oil?

OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.

07:24

Forex Today: Recession fears continue to dominate markets

Here is what you need to know on Tuesday, March 11:

Growing fears over an economic downturn in the US and its potential activity on the global economic outlook triggered a selloff in major equity indexes at the start of the week. On Tuesday, the US economic calendar will feature NFIB Business Optimism Index for February and JOLTS Job Openings data for January. Meanwhile, investors will keep a close eye on political headlines and the action in stock markets.

On Monday, Wall Street's main indexes opened in negative territory and continued to push lower, as US President Donald Trump acknowledged over the weekend that they will be in a "period of transition," when asked whether his policy changes could potentially cause a recession. The Nasdaq Composite fell 3.8%, the S&P 500 lost 2.7% and the Down Jones Industrial Average declined 2.08% on the first trading day of the week. In the meantime, the CBOE Volatility Index (VIX), also known as Wall Street's fear gauge, rose about 20% on the day and reached its highest level since early August. In the European morning on Tuesday, US stock index futures trade marginally higher.

US Dollar PRICE Last 7 days

The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the weakest against the Euro.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-3.63%	-1.61%	-1.56%	-0.56%	-0.91%	-1.35%	-1.89%
EUR	3.63%		2.10%	2.14%	3.19%	2.83%	2.37%	1.80%
GBP	1.61%	-2.10%		0.06%	1.06%	0.72%	0.27%	-0.28%
JPY	1.56%	-2.14%	-0.06%		1.00%	0.65%	0.19%	-0.35%
CAD	0.56%	-3.19%	-1.06%	-1.00%		-0.35%	-0.78%	-1.34%
AUD	0.91%	-2.83%	-0.72%	-0.65%	0.35%		-0.44%	-1.00%
NZD	1.35%	-2.37%	-0.27%	-0.19%	0.78%	0.44%		-0.55%
CHF	1.89%	-1.80%	0.28%	0.35%	1.34%	1.00%	0.55%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

The US Dollar (USD) Index closed virtually unchanged on Monday as the risk-averse market atmosphere helped the USD stay resilient against its rivals. Falling US Treasury bond yields, however, made it difficult for the USD to gather strength. After losing 2% on Monday, the benchmark 10-year US T-bond yield stays in the red below 4.2% early Tuesday and the USD Index edges lower below 104.00.

EUR/USD struggled to build on the previous week's gains and closed flat on Monday. The pair gains traction in the European morning and trades above 1.0850.

GBP/USD registered small losses on Monday but managed to stabilize near 1.2900 early Tuesday.

The data from Japan showed in the Asian session that the Gross Domestic Product expanded at an annual rate of 2.2% in the fourth quarter, down from the 2.8% growth recorded in the previous quarter. Japan's Economy Minister Ryosei Akazawa said on Tuesday that the Japanese economy is expected to recover moderately, though policymakers remain cautious about external risks. After losing about 0.5% on Monday, USD/JPY trades marginally lower on the day near 147.00 on Tuesday.

Gold failed to benefit from falling US T-bond yields and fell more than 0.5% on Monday. XAU/USD stays in a consolidation phase at around $2,900 in the European morning.

Risk sentiment FAQs

What do the terms"risk-on" and "risk-off" mean when referring to sentiment in financial markets?

In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.

What are the key assets to track to understand risk sentiment dynamics?

Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.

Which currencies strengthen when sentiment is "risk-on"?

The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.

Which currencies strengthen when sentiment is "risk-off"?

The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.

07:09

BoJ: Financial institutions have sufficient capacity to absorb losses

The Bank of Japan (BoJ) said in a statement on Tuesday that “financial institutions have sufficient capacity to absorb losses.”

Additional takeaways

Smooth functioning of financial intermediation has been maintained even amid global changes in financial and economic conditions.

Major financial institutions have strengthened the profitability of their domestic deposit-taking and lending activities, taking into account rising Yen interest rates.

Regional financial institutions have improved the profitability of their domestic deposit-taking and lending activities due to rising yen interest rates.

Some financial institutions faced challenges in estimating the impact of interest rate hikes on their profitability.

Many financial institutions expected credit costs to remain more or less flat, though some recorded large credit losses related to financing for global business activities.

With regard to risk management, there were some cases where financial institutions had problems in assessing borrowers' financial and funding conditions.

Market reaction

USD/JPY was last seen trading at 147.17, down 0.07% on the day.

Japanese Yen PRICE Today

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the New Zealand Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.30%	-0.19%	-0.06%	-0.06%	0.08%	0.19%	-0.13%
EUR	0.30%		0.12%	0.26%	0.24%	0.38%	0.50%	0.18%
GBP	0.19%	-0.12%		0.13%	0.12%	0.27%	0.37%	0.07%
JPY	0.06%	-0.26%	-0.13%		-0.01%	0.13%	0.24%	-0.06%
CAD	0.06%	-0.24%	-0.12%	0.00%		0.15%	0.25%	-0.05%
AUD	-0.08%	-0.38%	-0.27%	-0.13%	-0.15%		0.12%	-0.19%
NZD	-0.19%	-0.50%	-0.37%	-0.24%	-0.25%	-0.12%		-0.30%
CHF	0.13%	-0.18%	-0.07%	0.06%	0.05%	0.19%	0.30%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

07:01

GBP/JPY Price Forecast: Bearish outlook remains in play below 190.00

GBP/JPY gathers strength to around 189.85 in Tuesday’s early European session.
The cross keeps the negative outlook below the 100-day EMA with a bearish RSI indicator.
The initial support emerges at 188.15; the first upside barrier is located at 190.00.

The GBP/JPY cross drifts higher to 189.85 during the early European session on Tuesday. However, the upside for the cross might be limited amid the risk-off sentiment, which is likely to boost the safe-haven currency like the Japanese Yen (JPY).

Despite the downward revision of Japan's Gross Domestic Product (GDP) for the fourth quarter (Q4), traders seem convinced that the Bank of Japan (BoJ) will raise its interest rates further amid broadening inflation in Japan. This, in turn, might underpin the JPY in the near term.

According to the daily chart, the bearish outlook of GBP/JPY remains in play as the cross remains capped below the key 100-day Exponential Moving Average (EMA). Furthermore, the downward momentum is supported by the 14-day Relative Strength Index (RSI), which is located below the midline, suggesting that the path of least resistance is to the downside.

The first downside target for the cross emerges at 188.15, the low of February 21. Extended losses could see a drop to 187.87, the lower limit of the Bollinger Band. A decisive break below the mentioned level could pave the way to 187.00, representing the psychological level and the low of February 7.

On the bright side, the first upside barrier to watch is the 190.00 psychological level. The crucial resistance level for the cross emerges at 192.50, the 100-day EMA. Sustained trading above this level could attract some buyers to 192.70, the upper boundary of the Bollinger Band. Further north, the next hurdle is seen at 194.71, the high of January 27.

GBP/JPY daily chart

Japanese Yen FAQs

What key factors drive the Japanese Yen?

The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.

How do the decisions of the Bank of Japan impact the Japanese Yen?

One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.

How does the differential between Japanese and US bond yields impact the Japanese Yen?

Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.

How does broader risk sentiment impact the Japanese Yen?

The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.

06:08

FX option expiries for Mar 11 NY cut

FX option expiries for Mar 11 NY cut at 10:00 Eastern Time via DTCC can be found below.

EUR/USD: EUR amounts

1.0625 1.3b
1.0635 801m
1.0750 972m
1.0885 1.5b

GBP/USD: GBP amounts

1.2750 428m

USD/JPY: USD amounts

145.25 1b
148.70 740m

USD/CHF: USD amounts

0..8985 425m

AUD/USD: AUD amounts

0.6275 932m
0.6300 843m
0.6385 2.7b

USD/CAD: USD amounts

1.4265 768m
1.4470 697m
1.4570 690m

NZD/USD: NZD amounts

0.5645 652m

EUR/GBP: EUR amounts

0.8335 413m
0.8425 474m

06:01

USD/CHF weakens to near 0.8800 amid tariff worries USDCHF

USD/CHF tumbles to around 0.8800 in Tuesday’s early European session.
Concerns over a global trade war boost the safe-haven flows, supporting the Swiss Franc.
The US CPI inflation data will be the highlight on Wednesday.

The USD/CHF pair attracts some sellers to near 0.8800 during the early European session on Tuesday. Probable US economic slowdown and continued policy uncertainty surrounding the Trump administration's trade policy exert some selling pressure on the US Dollar (USD). Investors will closely monitor the US Consumer Price Index (CPI) inflation report, which is due on Wednesday.

Fears about a tariff-driven slowdown in US growth have rattled US stocks and the USD. “The market is unsure whether fading U.S. exceptionalism will continue to hurt the dollar or whether the dollar benefits from its safe-haven status,” said Bank of Singapore strategist Sim Moh Siong. Nonetheless, analysts believe that the extended downside for stock markets may lead to a safe-haven currency like the Swiss Franc (CHF).

Risk-averse investors have sought the Swiss Franc sending the pair to multi-month highs against the Greenback. Additionally, the rising bets that the Federal Reserve (Fed) will cut the additional interest rate could undermine the USD. Traders are pricing in 75 basis points of cuts from the Fed this year, LSEG data showed, with a rate cut fully priced in for June.

The US CPI report for February will be in the spotlight on Friday, which might offer some hints about the inflation trajectory in the US. The headline CPI inflation is expected to cool down in February after accelerated in January.

Swiss Franc FAQs

What key factors drive the Swiss Franc?

The Swiss Franc (CHF) is Switzerland’s official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country’s economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc’s value, causing a turmoil in markets. Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone.

Why is the Swiss Franc considered a safe-haven currency?

The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country’s currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in.

How do decisions of the Swiss National Bank impact the Swiss Franc?

The Swiss National Bank (SNB) meets four times a year – once every quarter, less than other major central banks – to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.

How does economic data influence the value of the Swiss Franc?

Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc’s (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank’s currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate.

How does the Eurozone monetary policy affect the Swiss Franc?

As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland’s main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.

05:38

USD/CAD remains below 1.4450 amid recession fears in the United States USDCAD

USD/CAD remains under pressure as the US Dollar weakens amid growth concerns over the US economy.
President Donald Trump referred to the economy as being in a "transition period," hinting at a potential slowdown.
The Bank of Canada is widely expected to cut rates by 25 basis points at its March meeting on Wednesday.

USD/CAD holds losses after two days of gains, trading around 1.4440 during the Asian hours on Tuesday. The pair loses ground as the US Dollar (USD) struggles amid concerns that tariff policy uncertainty could push the US economy into recession. Investors are now looking ahead to February’s Consumer Price Index (CPI) release on Wednesday for further insights into inflation trends.

US President Donald Trump characterized the economy as being in a "transition period," hinting at a potential slowdown. Investors took his remarks as an early signal of possible economic turbulence in the near future.

Fed Chair Jerome Powell reassured markets that the central bank sees no immediate need to adjust monetary policy despite rising uncertainties. San Francisco Fed President Mary Daly echoed this sentiment, noting that increasing business uncertainty could dampen demand but does not justify an interest rate change.

US Commerce Secretary Howard Lutnick stated on Sunday that the 25% tariffs, imposed by President Donald Trump in February, on imports from top foreign suppliers like Canada and Mexico, set to take effect on Wednesday, are unlikely to be postponed, according to Bloomberg. While US steelmakers have urged Trump to maintain the tariffs, businesses reliant on these materials may face increased costs.

The Bank of Canada (BoC) is expected to cut rates by 25 basis points at its March meeting on Wednesday. CIBC analysts predict the central bank will lower its benchmark rate to 2.75%, with further cuts likely if trade uncertainty continues.

Canadian Dollar FAQs

What key factors drive the Canadian Dollar?

The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.

How do the decisions of the Bank of Canada impact the Canadian Dollar?

The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.

How does the price of Oil impact the Canadian Dollar?

The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.

How does inflation data impact the value of the Canadian Dollar?

While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.

How does economic data influence the value of the Canadian Dollar?

Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.

05:31

Netherlands, The Consumer Price Index n.s.a (YoY) climbed from previous 3.3% to 3.8% in February

05:29

US Dollar Index (DXY) hangs near multi-month low, seems vulnerable above mid-103.00s

USD meets with a fresh supply amid worries about a tariff-driven slowdown in US growth.
Bets that the Fed will resume its rate-cutting cycle sooner further weigh on the Greenback.
The recent rally in the Euro and the JPY contributes to the strong USD bearish sentiment.

The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, struggles to capitalize on the previous day's modest gains and attracts fresh sellers during the Asian session on Tuesday. The index currently trades around the 103.70 area, down over 0.20% for the day, and remains close to its lowest level since early November touched last Friday.

Investors remain worried about US President Donald Trump's trade tariffs and their potential impact on the US economy. Apart from this, Friday's weaker US Nonfarm Payrolls (NFP) report pointed to signs of a cooling labor market. This continues to fuel speculations that the Federal Reserve (Fed) would cut interest rates multiple times this year, which keeps the US Treasury bond yields depressed and is seen undermining the US Dollar (USD).

Apart from this, the recent rally in the shared currency, led by a historic deal to loosen Germany’s borrowing limits, and the Japanese Yen (JPY), bolstered by bets for more interest rate hikes by the Bank of Japan (BoJ), further weigh on the Greenback. However, the prevalent risk-off environment could offer some support to the safe-haven buck. Traders might also refrain from placing aggressive bets ahead of the latest US inflation figures.

The crucial US Consumer Price Index (CPI) report is due for release on Wednesday and will be followed by the US Producer Price Index (PPI) on Thursday. This might influence market expectations about the Fed's rate-cut path, which, in turn, will play a key role in driving the near-term USD price dynamics. In the meantime, traders on Tuesday will take cues from the Job Openings and Labor Turnover Survey (JOLTS) for short-term impetuses.

US Dollar FAQs

What is the US Dollar?

The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.

How do the decisions of the Federal Reserve impact the US Dollar?

The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.

What is Quantitative Easing and how does it influence the US Dollar?

In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.

What is Quantitative Tightening and how does it influence the US Dollar?

Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.

04:50

EUR/USD Price Analysis: Rises above 1.0850 while remaining in overbought territory EURUSD

EUR/USD moves below an ascending channel pattern, suggesting a bearish momentum shift.
The 14-day RSI holding above the 70 mark signals a potential downward correction.
The pair may find its primary support at the nine-day EMA of 1.0716 level,

The EUR/USD pair gains ground for the third successive session, trading around 1.0860 during the Asian hours on Tuesday. A technical examination of the daily chart indicates a bearish breakout as the pair breaks below an ascending channel pattern, suggesting a shift in momentum from buyers to sellers.

Additionally, the 14-day Relative Strength Index (RSI), a key momentum indicator, is positioned slightly above 70, indicating an overbought situation and downward correction for the EUR/USD pair. However, the pair remains above both the nine-day and 14-day Exponential Moving Averages (EMAs), reinforcing strong short-term momentum.

A successful return to the ascending channel could reinforce the bullish bias and support the EUR/USD pair to explore the region around the upper boundary of the ascending channel at the 1.1050 level.

On the downside, the EUR/USD pair could find the primary support at the nine-day EMA of 1.0716 level, followed by the 50-day EMA at 1.0517 level. A break below this level would weaken the short-term price momentum and put downward pressure on the pair to navigate the area around the 1.0177 level—the lowest since November 2022, last recorded on January 1.

EUR/USD: Daily Chart

Euro PRICE Today

The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the New Zealand Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.17%	-0.12%	-0.19%	-0.06%	0.04%	0.08%	-0.22%
EUR	0.17%		0.07%	0.02%	0.12%	0.22%	0.26%	-0.04%
GBP	0.12%	-0.07%		-0.06%	0.05%	0.16%	0.20%	-0.09%
JPY	0.19%	-0.02%	0.06%		0.13%	0.23%	0.27%	-0.02%
CAD	0.06%	-0.12%	-0.05%	-0.13%		0.11%	0.14%	-0.15%
AUD	-0.04%	-0.22%	-0.16%	-0.23%	-0.11%		0.05%	-0.25%
NZD	-0.08%	-0.26%	-0.20%	-0.27%	-0.14%	-0.05%		-0.29%
CHF	0.22%	0.04%	0.09%	0.02%	0.15%	0.25%	0.29%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).

04:45

AUD/JPY softens below 92.50 on risk-off sentiment

AUD/JPY loses traction to near 92.30 in Tuesday’s Asian session, down 0.18% on the day.
Japan’s GDP expanded an annualised 2.2% in Q4, slower than the 2.8% growth in the initial estimate.
Tariff threats and China’s deflationary pressure undermine the China-proxy Aussie.

The AUD/JPY trades in negative territory to around cross 92.30 during the Asian trading hours on Tuesday. The Japanese Yen (JPY) strengthens against the Australian Dollar (AUD) due to the prevalent risk-off environment.

Data released by the Cabinet Office on Tuesday showed that the Japanese economy grew by 0.6% QoQ in the fourth quarter (Q4) of 2024. This figure came in lower than the preliminary reading of 0.7%. On an annual basis, the Japan’s Gross Domestic Product (GDP) expanded 2.2% in Q4 versus the initial estimate of 2.8%. The data reaffirms market bets that the Bank of Japan will keep the policy rate steady at its next policy meeting on March 18-19.

Analysts expect that the Bank of Japan (BoJ) will raise further interest rates as soon as May amid concerns about broadening inflation in Japan and hopes that bumper wage hikes seen last year will continue this year. This, in turn, might underpin the JPY and act as a headwind for AUD/JPY.

On the other hand, the Aussie faces some challenges amid escalating global trade tensions and deflationary pressure in China, which might cap the upside for the pair. China's CPI in February missed expectations and fell at the sharpest pace since January 2024. The CPI fell 0.7% in February from a year earlier, reversing January's 0.5% increase, data from the National Bureau of Statistics (NBS) showed on Sunday.

Australian Dollar FAQs

What key factors drive the Australian Dollar?

One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.

How do the decisions of the Reserve Bank of Australia impact the Australian Dollar?

The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.

How does the health of the Chinese Economy impact the Australian Dollar?

China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.

How does the price of Iron Ore impact the Australian Dollar?

Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.

How does the Trade Balance impact the Australian Dollar?

The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.

04:42

Ukraine launches record drone attacks on Moscow

Hours ahead of the US-Ukraine Summit on minerals and peace deal, Ukraine launched record drone attacks on Russia’s capital, Moscow.

Moscow Mayor Sergei Sobyanin said that Russian air defence units destroyed at least 11 Ukrainian drones flying towards the capital.

“The drones were downed over the Ramenskoye and Domodedovo districts of the Moscow region. Both districts lie about 40 km (25 miles) to 50 km (30 miles) south and southeast of the Kremlin,” he added.

Russia's aviation watchdog said that flights were suspended at the Zhukovo and Domodedovo airports following these attacks.

Market reaction

Markets pay little attention to these headlines, with risk recovery underway. The US Dollar Index (DXY) is losing 0.19% on the day to trade near 103.75, as of writing.

Risk sentiment FAQs

What do the terms"risk-on" and "risk-off" mean when referring to sentiment in financial markets?

In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.

What are the key assets to track to understand risk sentiment dynamics?

Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.

Which currencies strengthen when sentiment is "risk-on"?

The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.

Which currencies strengthen when sentiment is "risk-off"?

The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.

04:40

India Gold price today: Gold rises, according to FXStreet data

Gold prices rose in India on Tuesday, according to data compiled by FXStreet.

The price for Gold stood at 8,136.41 Indian Rupees (INR) per gram, up compared with the INR -0.03 it cost on Monday.

The price for Gold increased to INR 94,901.45 per tola from INR 94,612.61 per tola a day earlier.

Unit measure	Gold Price in INR
1 Gram	8,136.41
10 Grams	81,347.34
Tola	94,901.45
Troy Ounce	253,060.20

Daily digest market movers: Gold price retreats amid falling US yields

The US 10-year Treasury bond yield dropped nearly nine basis points to 4.218% as traders eye the Fed’s interest rate cuts.
US real yields, as measured by the US 10-year Treasury Inflation-Protected Securities (TIPS) yield that correlates inversely to Gold prices, edge down five-and-a-half basis points to 1.906%, a tailwind for the non-yielding metal.
Recently, Fed Chair Jerome Powell reiterated that the central bank is not in a hurry to lower rates. Powell added that getting inflation to 2% would be bumpy and that the central bank doesn’t need to overreact to one or two readings. Powell said the Fed is well-positioned regarding monetary policy.
The New York Fed Consumer Sentiment Survey revealed that inflation expectations for one year in February increased from 3% to 3.1%. For the three and five-year periods, they remained unchanged at 3%. Americans expect price increases in gas, rent and food.
The latest US jobs report for February was mixed, with the economy adding over 150K people to the workforce, but the Unemployment Rate rose by 4.1%. Nevertheless, the data shows that the labor market remains solid.
The People’s Bank of China (PBoC) continues to purchase Gold, according to the World Gold Council (WGC). The PBoC increased its holdings by 10 tonnes in the first two months of 2025. However, the largest buyer was the National Bank of Poland (NBP), which increased its reserve by 29 tonnes, its largest purchase since June 2019, when it bought 95 tonnes.
Money market traders had priced in 80 basis points of easing in 2025, up from 74 bps last Friday, via data from Prime Market Terminal.

FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.

Gold FAQs

Why do people invest in Gold?

Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

Who buys the most Gold?

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

How is Gold correlated with other assets?

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

What does the price of Gold depend on?

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

(An automation tool was used in creating this post.)

04:38

Gold price recovers part of Monday’s slide amid trade war fears, sustained USD selling

Gold price rebounds from a one-week low and draws support from a combination of factors.
Global trade war fears and geopolitical risks continue to underpin the safe-haven commodity.
Fed rate cut bets keep the USD depressed and further benefit the non-yielding XAU/USD pair.

Gold price (XAU/USD) attracts some dip-buyers near the $2,880 region during the Asian session on Tuesday and reverses a part of the previous day's downfall to a one-week low. The uncertainty surrounding US President Donald Trump's trade policies and their impact on the global economy continues to weigh on investors' sentiment. This is evident from the prevalent risk-off mood, which, along with geopolitical risks, drives flows toward the safe-haven bullion.

Meanwhile, expectations that a tariff-driven slowdown in US growth might force the Federal Reserve (Fed) to cut interest rates multiple times this year keep the US Dollar (USD) depressed near its lowest level since November. This, in turn, is seen as another factor underpinning the non-yielding Gold price. However, the recent range-bound price action witnessed over the past week or so warrants caution for bulls ahead of the US inflation figures this week.

Daily Digest Market Movers: Gold price continues to be underpinned by rising trade tensions and bearish USD

Investors continue to take refuge in traditional safe-haven assets amid concerns about US President Donald Trump's trade tariffs, assisting the Gold price to rebound from a one-week trough touched on Monday. In fact, Trump's 25% tariffs on global steel and aluminum imports go into effect on Wednesday. Furthermore, the Trump administration is preparing for other levies planned for April 2.
Markets remain worried about a potential US recession on the back of Trump's protectionist policies. Adding to this, signs of a weakening US labor market fuel speculations that the Federal Reserve would resume its rate-cutting cycle in June. This keeps the US Treasury bond yields depressed and the US Dollar close to a multi-month low, further lending support to the non-yielding yellow metal.
Ukrainian President Volodymyr Zelenskiy's meeting with Trump at the Oval Office on February 28 ended in disaster, leading to the US suspending all military aid to Ukraine. Hence, investors brace for more geopolitical action at a meeting between US officials and their Ukrainian counterparts starting today. This, in turn, could play a key role in influencing the XAU/USD pair's price action.
Later during the North American session, traders will take cues from the release of the Job Openings and Labor Turnover Survey (JOLTS) from the US. The focus, however, will remain on the US inflation figures – the Consumer Price Index (CPI) on Wednesday and the Producer Price Index (PPI) on Thursday. This will drive the USD and determine the near-term trajectory for the precious metal.

Gold price bears need to wait for some follow-through selling below the $2,880 support before placing fresh bets

fxsoriginal

From a technical perspective, the overnight breakdown and close below the $2,900 round figure, or the lower end of a short-term trading range, could be seen as a key trigger for bearish traders. That said, mixed oscillators on the daily chart make it prudent to wait for some follow-through selling below the $2,880 region, or the one-week low, before positioning for further losses. The subsequent downfall could drag the Gold price to the $2,860 intermediate support en route to the late February swing low, around the $2,833-2,832 region, and the $2,800 mark.

On the flip side, any further move up beyond the $2,900 round figure is likely to face some resistance near the $2,922-2,924 area. A sustained strength beyond the said barrier could lift the Gold price beyond the $2,934 resistance, towards retesting the record high, around the $2,956 region touched on February 24.

Gold FAQs

Why do people invest in Gold?

Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

Who buys the most Gold?

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

How is Gold correlated with other assets?

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

What does the price of Gold depend on?

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

04:29

US-China trade talks stuck at lower levels – Bloomberg

Citing people familiar with the matter, Bloomberg reported on Tuesday, that talks between the US and China on trade and other issues are in a deadlock.

Sources noted: “Officials in Beijing say the US hasn’t outlined detailed steps they expect from China on fentanyl in order to have the tariffs lifted.”

developing story...

US-China Trade War FAQs

What does “trade war” mean?

Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.

What is the US-China trade war?

An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.

Trade war 2.0

The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.

03:52

Indonesia Consumer Confidence dipped from previous 127.2 to 126.4 in February

03:48

NZD/USD remains below 0.5700 as deflationary pressures deepen in China NZDUSD

NZD/USD declines as the New Zealand Dollar comes under pressure from deepening deflationary concerns in China.
The NZD weakened amid escalating global trade tensions after China’s retaliatory tariffs on US agricultural products took effect on Monday.
US growth concerns grew after President Donald Trump described it as being in a "transition period," signaling a potential slowdown.

NZD/USD extends its losing streak for the third successive day, trading around 0.5690 during the Asian hours on Tuesday. The pair continues to lose ground as the New Zealand Dollar (NZD) faces headwinds due to deflationary pressures deepened in China, highlighted by the steepest fall in consumer prices in 13 months in February and the 29th straight month of drop in factory-gate prices. Given China’s status as New Zealand’s largest trading partner, these developments have weighed on market sentiment.

Additionally, the NZD faced challenges as rising global trade tensions dampened investors’ risk appetite. China's retaliatory tariffs of up to 15% on certain US agricultural products went into effect on Monday, in response to last week's US tariff increase from 10% to 20% on Chinese imports.

However, the downside of the NZD/USD pair could be restrained as the US Dollar (USD) struggles amid concerns that tariff policy uncertainty could push the US economy into recession. US President Donald Trump characterized the economy as being in a "transition period," hinting at a potential slowdown. Investors took his remarks as an early signal of possible economic turbulence in the near future.

Fed Chair Jerome Powell reassured markets that the central bank sees no immediate need to adjust monetary policy despite rising uncertainties. San Francisco Fed President Mary Daly echoed this sentiment, noting that increasing business uncertainty could dampen demand but does not justify an interest rate change.

With the Federal Reserve entering its blackout period ahead of the March 19 meeting, central bank c

New Zealand Dollar FAQs

What key factors drive the New Zealand Dollar?

The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.

How do decisions of the RBNZ impact the New Zealand Dollar?

The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.

How does economic data influence the value of the New Zealand Dollar?

Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.

How does broader risk sentiment impact the New Zealand Dollar?

The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.

ommentary will be limited this week. Investors are now looking ahead to February’s Consumer Price Index (CPI) release on Wednesday for further insights into inflation trends.

02:57

Silver Price Forecast: XAG/USD rebounds from multi-day low, climbs back above $32.00

Silver attracts some dip-buying on Tuesday and snaps a three-day losing streak.
The mixed oscillators on the daily chart warrant some caution for bullish traders.
Weakness below the Asian session low might expose the 100-day EMA support.

Silver (XAG/USD) reverses an Asian session dip to the $31.85-$31.80 region, or a four-day low, and climbs to a fresh daily high in the last hour. The white metal currently trades around the $32.15-$32.20 area, up nearly 0.20% for the day, and for now, seems to have snapped a three-day losing streak.

However, mixed technical indicators on the daily chart warrant some caution for bullish traders and positioning for a further appreciating move. Hence, any subsequent move up could face stiff resistance and remain capped near the $32.65-$32.70 region. The said hurdle might now act as a key pivotal point, which if cleared decisively could allow the XAG/USD to reclaim the $33.00 mark and climb further towards the February monthly swing high around the $33.40 area.

Some follow-through buying should pave the way for additional gains towards the next relevant hurdle near the $33.60-$33.70 area. The XAG/USD might then surpass the $34.00 round figure and extend the momentum further towards the $34.50-$34.55 resistance zone before aiming to challenge the multi-year high, closer to the $35.00 psychological mark touched in October 2024.

On the flip side, the Asian session low, around the $31.85-$31.80 region, could offer some support, below which the XAG/USD could slide to the $31.25-$31.20 area. The downward trajectory might eventually drag the XAG/USD to the 100-day Exponential Moving Average (EMA) pivotal support, currently pegged near the $31.10-$31.00 region. This is followed by the late February low, around the $30.80 area, which if broken might shift the bias in favor of bearish traders.

The subsequent downfall has the potential to drag the XAG/USD towards the $30.00 psychological mark en route to the $29.55-$29.50 support and sub-$29.00 levels, or the year-to-date low touched in January.

XAG/USD daily chart

fxsoriginal

Silver FAQs

Why do people invest in Silver?

Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.

Which factors influence Silver prices?

Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.

How does industrial demand affect Silver prices?

Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.

How do Silver prices react to Gold’s moves?

Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.

02:44

USD/INR gathers strength on concerns over US tariffs, global trade war

The Indian Rupee weakens in Tuesday’s Asian session.
Persistent US dollar demand and unabated outflow of foreign funds weigh on the INR.
Indian and US CPI inflation reports will take center stage on Wednesday.

The Indian Rupee (INR) extends the decline on Tuesday, pressured by strong US Dollar (USD) demand by importers. Maturities in the non-deliverable forwards (NDF) market also exert some selling pressure on the local currency that has been hit by foreign fund sales of local equities since late September. The uncertainty caused by US President Donald Trump’s tariff policy might impact emerging market currencies like the INR.

Nonetheless, any significant depreciation of the local currency might be limited due to the foreign exchange intervention from the Reserve Bank of India (RBI). Furthermore, a decline in crude oil prices might help limit the INR’s losses as India is the world's third-largest oil consumer.

In the absence of top-tier economic data releases from the United States and India on Tuesday, the USD/INR pair will be driven by the Greenback. The Indian and US Consumer Price Index (CPI) inflation reports for February will be the highlights on Wednesday.

Indian Rupee edges lower amid portfolio outflows and global factors

"The rupee weakened because of an increase in dollar demand from oil companies, as Indian companies have started buying oil from the US," a trader at a private bank said.
Foreign investors have withdrawn almost $15 billion from Indian shares so far this year, putting outflows on track to surpass the record $17 billion registered in 2022. The selloff has wiped out $1.3 trillion from India’s market value.
Trump declined on Sunday to predict whether the US could face a recession amid stock market concerns about his tariff actions on Mexico, Canada and China.
The US Nonfarm Payrolls (NFP) came in weaker than the expectation, rising by 151K in February versus 125K prior (revised from 143K). Meanwhile, the Unemployment Rate ticked higher to 4.1% in February from 4.0% in January.
Fed Chair Jerome Powell said on Friday that the US central bank can remain patient in adjusting its benchmark interest rate, citing uncertainty around the potential impact of Trump's policies.
Traders are now pricing in 75 basis points (bps) of cuts from the Fed this year, LSEG data showed, with a rate cut fully priced in for June.

USD/INR retains its bullish bias in the longer term

The Indian Rupee softens on the day. The bullish bias of the USD/INR pair remains intact, with the price holding above the key 100-day Exponential Moving Average (EMA) on the daily chart. The path of least resistance is to the upside as the 14-day Relative Strength Index (RSI) stands above the midline near 60.0.

The first upside target for USD/INR emerges at 87.53, the high of February 28. Potential bullish candlesticks above the mentioned level could see a rally to an all-time high near 88.00, en route to 88.50.

In the bearish event, the initial support level is located at 86.86, the low of March 6. Any follow-through selling could attract some selling pressure to 86.48, the low of February 21, followed by 86.14, the low of January 27.

Indian Rupee FAQs

What are the key factors driving the Indian Rupee?

The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee.

How do the decisions of the Reserve Bank of India impact the Indian Rupee?

The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference.

What macroeconomic factors influence the value of the Indian Rupee?

Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee.

How does inflation impact the Indian Rupee?

Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.

02:43

GBP/USD maintains position near 1.2900 as concerns over US economic growth persist GBPUSD

GBP/USD rises as the US Dollar weakens amid fears that tariff policy uncertainty could drive the US economy into recession.
Concerns over the US economy deepened after Trump described it as being in a "transition period," signaling a potential slowdown.
The Pound Sterling appreciated after BoE’s Catherine Mann rejected the need for a “gradual and cautious” approach to monetary easing.

The GBP/USD pair recovers recent losses from the previous session, trading around 1.2890 during Asian hours on Tuesday. The pair edges higher as the US Dollar (USD) struggles amid concerns that tariff policy uncertainty could push the US economy into recession.

Weaker-than-expected US job data for February has strengthened expectations of multiple Federal Reserve (Fed) rate cuts this year. LSEG data shows that traders now anticipate a total of 75 basis points (bps) in cuts, with a June rate reduction fully priced in.

US economic concerns grew after President Donald Trump characterized the economy as being in a "transition period," hinting at a potential slowdown. Investors took his remarks as an early signal of possible economic turbulence in the near future.

However, Fed Chair Jerome Powell reassured markets that the central bank sees no immediate need to adjust monetary policy despite rising uncertainties. San Francisco Fed President Mary Daly echoed this sentiment on Sunday, noting that increasing business uncertainty could dampen demand but does not justify an interest rate change.

With the Federal Reserve entering its blackout period ahead of the March 19 meeting, central bank commentary will be limited this week. Investors are now looking ahead to February’s Consumer Price Index (CPI) release on Wednesday for further insights into inflation trends.

The GBP/USD pair strengthened as the Pound Sterling (GBP) found support after Bank of England (BoE) Monetary Policy Committee (MPC) member Catherine Mann dismissed the need for a “gradual and cautious” approach to monetary easing in response to rising global economic volatility during her speech last week.

However, before Mann’s remarks, four BoE officials, including Governor Andrew Bailey, had advocated for a measured approach to reducing monetary policy restrictiveness, citing concerns that inflation persistence is unlikely to subside “on its own accord.”

GDP FAQs

What is GDP and how is it recorded?

A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022. Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted.

How does GDP influence currencies?

A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency. When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate.

How does higher GDP impact the price of Gold?

When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.

02:34

Japanese Yen refreshes multi-month top against USD despite weaker Japan Q4 GDP

The Japanese Yen attracts safe-haven flows amid trade war fears and risk-off mood.
A downward revision of Japan’s Q4 GDP does little to dent the JPY bullish sentiment.
The divergent BoJ-Fed expectations support prospects for a further USD/JPY decline.

The Japanese Yen (JPY) climbed to a fresh multi-month top against its American counterpart during the Asian session on Tuesday despite the downward revision of Japan's Q4 GDP print, which complicates the Bank of Japan's (BoJ) plan for a further rate hike. The recent sharp narrowing of the yield differential between Japan and other countries turns out to be a key factor that continues to act as a tailwind for the JPY. Apart from this, the risk-off mood further underpins the safe-haven JPY.

The JPY bulls, meanwhile, seem rather unaffected by concerns that US President Donald Trump could impose fresh tariffs on Japan. The US Dollar (USD), on the other hand, remains depressed near a multi-month low amid rising bets that a tariff-driven slowdown in US growth might force the Federal Reserve (Fed) to lower borrowing costs multiple times this year. This, in turn, suggests that the path of least resistance for the USD/JPY pair is to the downside and supports prospects for further losses.

Japanese Yen continues to draw support from divergent BoJ-Fed expectations, risk-off mood

USD/JPY needs to consolidate before the next leg down as daily RSI remains near oversold zone

fxsoriginal

From a technical perspective, the Relative Strength Index (RSI) on the daily chart remains on the verge of breaking into the oversold territory and warrants some caution for bearish traders. Hence, it will be prudent to wait for some near-term consolidation or a modest bounce before positioning for an extension of a two-month-old downtrend. However, any attempted recovery beyond the 147.25-147.30 immediate hurdle is likely to attract fresh sellers ahead of the 148.00 round figure. This is followed by the 148.60-148.70 strong horizontal support breakpoint, now turned resistance, which should now act as a key pivotal point and cap the USD/JPY pair.

On the flip side, the Asian session swing low, around the 146.55-146.50 area, could offer some support, below which the USD/JPY pair could accelerate the slide towards the 146.00 mark. The downward trajectory could extend further towards the 145.25 intermediate support en route to the 145.00 psychological mark.

Economic Indicator

Gross Domestic Product Annualized

The Gross Domestic Product (GDP), released by Japan’s Cabinet Office on a quarterly basis, is a measure of the total value of all goods and services produced in Japan during a given period. The GDP is considered as the main measure of Japan’s economic activity. The data is expressed at an annualized rate, which means that the rate has been adjusted to reflect the amount GDP would have changed over a year’s time, had it continued to grow at that specific rate. Generally, a high reading is seen as bullish for the Japanese Yen (JPY), while a low reading is seen as bearish.

Raw materials	Closed	Change, %
Silver	32.082	-1.33
Gold	2887.76	-0.84
Palladium	938.27	-0.72

Australian Dollar faces challenges amid escalating global trade tensions

Technical Analysis: Australian Dollar falls to near 0.6250 as bearish momentum strengthens

The AUD/USD pair is trading near 0.6260 on Tuesday, with technical analysis of the daily chart showing the pair slipping below the nine-day Exponential Moving Average (EMA), signaling weakening short-term momentum. Additionally, the 14-day Relative Strength Index (RSI) has fallen below 50, indicating a shift toward a bearish bias.

On the downside, the AUD/USD pair could navigate the region around the five-week low of 0.6187, recorded on March 5.

The nine-day EMA at 0.6288 serves as the immediate resistance for the AUD/USD pair, followed by the 50-day EMA at 0.6305. A break above this level could strengthen short-term momentum, potentially pushing the pair toward the three-month high of 0.6408, last reached on February 21.

AUD/USD: Daily Chart

Australian Dollar PRICE Today

The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the Swiss Franc.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.08%	0.01%	-0.25%	-0.00%	0.21%	0.30%	-0.31%
EUR	0.08%		0.10%	-0.16%	0.09%	0.30%	0.39%	-0.23%
GBP	-0.01%	-0.10%		-0.25%	-0.02%	0.20%	0.28%	-0.31%
JPY	0.25%	0.16%	0.25%		0.23%	0.45%	0.53%	-0.06%
CAD	0.00%	-0.09%	0.02%	-0.23%		0.21%	0.30%	-0.30%
AUD	-0.21%	-0.30%	-0.20%	-0.45%	-0.21%		0.10%	-0.51%
NZD	-0.30%	-0.39%	-0.28%	-0.53%	-0.30%	-0.10%		-0.60%
CHF	0.31%	0.23%	0.31%	0.06%	0.30%	0.51%	0.60%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

Economic Indicator

Westpac Consumer Confidence

The Westpac Consumer Confidence released by the Faculty of Economics and Commerce Melbourne Institute captures the level of sentiment that individuals have in economic activity reflecting respondents' evaluations of their family finances over the past and coming year, expectations about the one-year and five-year economic conditions and views about current buying conditions for major household items. Generally speaking, a high reading is seen as positive (or bullish) for the AUD, whereas a low reading is seen as negative (or bearish).

Market reaction

At the press time, the USD/JPY pair is down 0.41% on the day to trade at 146.65.

Japanese Yen FAQs

What key factors drive the Japanese Yen?

The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.

How do the decisions of the Bank of Japan impact the Japanese Yen?

One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.

How does the differential between Japanese and US bond yields impact the Japanese Yen?

Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.

How does broader risk sentiment impact the Japanese Yen?

The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.

01:15

PBOC sets USD/CNY reference rate at 7.1741 vs. 7.1733 previous

The People’s Bank of China (PBOC) set the USD/CNY central rate for the trading session ahead on Tuesday at 7.1741 as compared to the previous day's fix of 7.1733 and 7.2597 Reuters estimates.

PBOC FAQs

What does the People's Bank of China do?

The primary monetary policy objectives of the People's Bank of China (PBoC) are to safeguard price stability, including exchange rate stability, and promote economic growth. China’s central bank also aims to implement financial reforms, such as opening and developing the financial market.

Who owns the PBoC?

The PBoC is owned by the state of the People's Republic of China (PRC), so it is not considered an autonomous institution. The Chinese Communist Party (CCP) Committee Secretary, nominated by the Chairman of the State Council, has a key influence on the PBoC’s management and direction, not the governor. However, Mr. Pan Gongsheng currently holds both of these posts.

What are the main policy tools used by the PBoC?

Unlike the Western economies, the PBoC uses a broader set of monetary policy instruments to achieve its objectives. The primary tools include a seven-day Reverse Repo Rate (RRR), Medium-term Lending Facility (MLF), foreign exchange interventions and Reserve Requirement Ratio (RRR). However, The Loan Prime Rate (LPR) is China’s benchmark interest rate. Changes to the LPR directly influence the rates that need to be paid in the market for loans and mortgages and the interest paid on savings. By changing the LPR, China’s central bank can also influence the exchange rates of the Chinese Renminbi.

Are private banks allowed in China?

Yes, China has 19 private banks – a small fraction of the financial system. The largest private banks are digital lenders WeBank and MYbank, which are backed by tech giants Tencent and Ant Group, per The Straits Times. In 2014, China allowed domestic lenders fully capitalized by private funds to operate in the state-dominated financial sector.

01:00

WTI tumbles below $65.50 on demand concerns

WTI price extends its downside to near $65.45 in Tuesday’s early Asian session.
Fears of slow global economies and US tariffs weigh on the WTI price.
Possible sanctions against Iran and Russia from the US might help limit the WTI’s losses.

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $65.45 during the early Asian session on Tuesday. The WTI price extends the decline amid concerns that US tariffs on Canada, Mexico and China would slow global economies and slash energy demand.

US President Donald Trump issued an executive order last week exempting goods from both Canada and Mexico under a North American trade agreement, known as USMCA, while raising duties on Chinese goods. China retaliated against the US and Canada with tariffs on agricultural products.

Continued policy uncertainty surrounding the Trump administration's trade policy and a probable global economic slowdown that could curtail oil demand are likely to undermine the WTI price in the near term. "There are recession talks for the U.S. and it's very concerning for the macro picture,” said John Kilduff, partner with Again Capital in New York.

On the other hand, possible sanctions against Iran and Russia from the US could provide support for the WTI price. Trump is trying to choke off Iranian oil exports as part of his attempts to push Tehran to curtail its nuclear program. Iran's Supreme Leader, Ayatollah Ali Khamenei, said on Saturday that his country will not be bullied into negotiations.

WTI Oil FAQs

What is WTI Oil?

WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.

What factors drive the price of WTI Oil?

Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.

How does inventory data impact the price of WTI Oil

The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.

How does OPEC influence the price of WTI Oil?

OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.

00:48

Japan’s Akazawa: FX should move stably, reflecting fundamentals

Japan's Economy Minister Ryosei Akazawa said on Tuesday that the Japanese economy is expected to recover moderately, though policymakers remain cautious about external risks.

Akazawa emphasized potential headwinds from US trade policies and the impact of rising energy and food costs on household sentiment, which could weigh on consumer spending.

The economy Minister highlighted the importance of exchange rates moving in accordance with economic fundamentals while reaffirming that monetary policy decisions rest with the BoJ.

Market reaction

At the press time, the USD/JPY pair is down 0.42% on the day to trade at 146.65.

Japanese Yen FAQs

What key factors drive the Japanese Yen?

The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.

How do the decisions of the Bank of Japan impact the Japanese Yen?

One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.

How does the differential between Japanese and US bond yields impact the Japanese Yen?

Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.

How does broader risk sentiment impact the Japanese Yen?

The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.

00:48

Japan’s Akazawa: FX should move stably, reflecting fundamentals

Japan's Economy Minister Ryosei Akazawa said on Tuesday that the Japanese economy is expected to recover moderately, though policymakers remain cautious about external risks.

Akazawa emphasized potential headwinds from US trade policies and the impact of rising energy and food costs on household sentiment, which could weigh on consumer spending.

The economy Minister highlighted the importance of exchange rates moving in accordance with economic fundamentals while reaffirming that monetary policy decisions rest with the BoJ.

Market reaction

At the press time, the USD/JPY pair is down 0.42% on the day to trade at 146.65.

Japanese Yen FAQs

What key factors drive the Japanese Yen?

The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.

How do the decisions of the Bank of Japan impact the Japanese Yen?

One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.

How does the differential between Japanese and US bond yields impact the Japanese Yen?

Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.

How does broader risk sentiment impact the Japanese Yen?

The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.