Celokupna Forex analiza, novosti i prognoze od 5 март 2025

23:59

EUR/USD soars ahead of ECB rate call EURUSD

EUR/USD scorched the charts on Wednesday, rising 1.75%.
Markets are tilting into the bullish side ahead of the ECB’s latest rate call.
Key US NFP figures still loom ahead, but tariff pivots are a welcome relief for markets.

EUR/USD surged on Wednesday, climbing 1.75% and knocking on the 1.0800 handle as risk sentiment rises following yet another pivot from US President Donald Trump on his own tariff strategy. President Trump is once again pumping the brakes on his own trade strategy of threatening to impose stiff import taxes on his own citizens in order to punish other countries for a litany of Donald Trump’s perceived slights.

The European Central Bank (ECB) is set to trim interest rates by another 25 bps on Thursday, taking the Main Refinancing Operations Rate down to 2.65% and dropping its Rate on Deposit Facility to 2.5%. Despite an overall tone of weak or lopsided growth permeating the EU’s economic dataset in the first quarter, rate traders have trimmed their bets of additional ECB rate cuts through the rest of the year as inflation continues to prove to be more of a problem than central planners anticipated. Rate markets now see less than 70 bps in rate cuts for the remainder of 2025.

The US ADP Employment Change for February showed only 77K new jobs, significantly below the forecast of 140K and March’s 186K. Nonetheless, the ADP results have consistently failed to correlate with Nonfarm Payrolls (NFP) since a reporting change in 2022, indicating that the weak performance holds little significance.

Read more:
US White House Press Secretary Leavitt: Trump will give auto industry an extension on tariffs
US President Donald Trump mulls exempting certain agricultural products from Canada, Mexico tariffs

This week, the Trump administration announced a one-month delay on tariffs for the automotive sector, which heavily relies on foreign trade. This exemption was retroactively declared as Trump’s team aims to impose tariffs on trading partners without negatively impacting the US economy.

This Friday’s US Nonfarm Payrolls (NFP) report is the key focus for traders this week. US net job additions are projected to rebound slightly in February to 160K, up from January’s rather unremarkable 143K figure.

EUR/USD price forecast

EUR/USD’s Wednesday rally saw Fiber put in its single best trading day in years, rising 185 pips in a single session and rising into touch range of the 1.0800 handle, a price level the pair hasn’t seen since early November 2024. The pair barely noticed the 200-day Exponential Moving Average (EMA) at 1.0640, with EUR/USD crashing through the key moving average on an intraday basis.

EUR/USD has risen 4% in three days, pushing into 17-week highs as price action goes one-sided this week. However, bulls could be poised to get caught with their hands in the cookie jar: technical oscillators remain in overbought territory, and a downside snap could drag bids back to the 200-day EMA before a new bullish trend is able to kickoff in earnest.

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.

23:53

China warns the US it is ready for 'any type of war'

A spokesperson for the Chinese foreign ministry said late Wednesday that China is ready to fight "any type" of war after hitting back against President Donald Trump's mounting trade tariffs, per BBC.

Key quotes

If the U.S. truly wants to solve the fentanyl issue, then the right thing to do is to consult with China on the basis of equality, mutual respect and mutual benefit to address each other's concerns.

If the U.S. has other agenda in mind and if war is what the U.S. wants, be it a tariff war, a trade war or any other type of war, we're ready to fight till the end.

Market reaction

At the time of writing, the AUD/USD pair is trading 0.03% lower on the day to trade at 0.6338.

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.

23:50

Japan Foreign Investment in Japan Stocks climbed from previous ¥-1038B to ¥-708.3B in February 28

23:32

GBP/USD continues to rally, searching for 1.2900 GBPUSD

GBP/USD rose another 0.85% on Wednesday as the Pound rally continues.
Greenback flows are softening as markets bet on tariff pivots.
Cable’s three-day rally has surged around 2.6%.

GBP/USD hit the gas pedal and pumped out another strong session on Wednesday, lurching higher by another 0.85% and notching in a third straight session of firmly bullish gains. Pound markets are firmly recovering after weeks of uneasy risk appetite, pushing GBP/USD to 16-week highs.

Despite warnings that the UK economy is overall weakening, Cable markets rallied following Wednesday’s Monetary Policy Hearings from the Bank of England (BoE). According to BoE Governor Andrew Bailey, A modest uptick in inflation is expected despite weaker growth figures, causing markets to readjust their rate-cut expectations for the rest of 2025. Rate markets now see less than 50 bps of total interest rate trims for the remainder of the year.

ADP Employment Change for February showed only 77K new jobs, well below the forecast of 140K and March’s 186K. Despite this, the ADP results have consistently failed to correlate with Nonfarm Payrolls (NFP) since a reporting change in 2022, meaning the poor performance holds little significance.

Read more:
US White House Press Secretary Leavitt: Trump will give auto industry an extension on tariffs
US President Donald Trump mulls exempting certain agricultural products from Canada, Mexico tariffs

This week, the Trump administration announced a one-month delay on tariffs for the automotive sector, which relies heavily on foreign trade. This exemption was retroactively declared as Trump’s team seeks to impose tariffs on trading partners without harming the US economy.

There is little of note on the UK side of the economic data docket this week, leaving this Friday’s US Nonfarm Payrolls (NFP) as the key print for traders to worry about. US net jobs additions are expected to rebound slightly in February to 160K from January’s overwhelmingly unremarkable 143K print.

GBP/USD price forecast

GBP/USD’s 100+ pip gain on Wednesday has pushed price action well above the 200-day Exponential Moving Average (EMA) near 1.2685. The pair could be poised for a new medium-term bull run, but a brief exhaustion play could be on the cards as technical oscillators continue to signal overbought conditions.

GBP/USD has gained 6.62% bottom-to-top since mid-January’s swing low into the 1.2100 handle. However, nearly a quarter of those gains have come in the last three days, with Cable rising over 323 pips since the start of the week, implying a general rise in volatility may lead to disappointing long-term momentum.

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.

23:24

US President Donald Trump mulls exempting certain agricultural products from Canada, Mexico tariffs

US President Donald Trump is considering exempting certain agricultural products from tariffs imposed on Canada and Mexico, a Bloomberg reporter said on X late Wednesday.

Market reaction

At the time of writing, the USD/CAD is trading 0.05% lower on the day to trade at 1.4335.

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.

23:05

USD/CAD weakens below 1.4350 as Trump delays Canada tariffs on autos USDCAD

USD/CAD trades in negative territory near 1.4335 in Wednesday’s late American session.
The White House said Trump will delay Canada, Mexico tariffs on autos for one month.
Private employers added just 77,000 jobs in February, weaker than expected, ADP noted.

The USD/CAD pair extends its decline to around 1.4335 during the late American session on Wednesday. The Canadian Dollar (CAD) strengthens against the US Dollar (USD) as investors weigh the prospects of Canada's receiving some relief from US tariffs. Later on Thursday, the US Initial Jobless Claims and Canadian Ivey Purchasing Managers Index will be released.

The White House said on Wednesday that US President Donald Trump is exempting automakers from newly imposed tariffs on Mexico and Canada for one month following the implementation of Donald Trump’s bespoke tariff strategy that imposed a 25% tariff on all goods imported from Canada and Mexico. The Loonie edges higher following these developments and creates a headwind for USD/CAD.

Furthermore, concerns over the US economy weigh on the Greenback. Private sector employment in the US grew by 77K in February, compared to the previous reading of 186K (revised from 183K), according to Automatic Data Processing (ADP) on Wednesday. This figure came in weaker than initial estimates of 140K.

On the other hand, the ongoing decline in crude oil prices on reports that OPEC+ will proceed with a planned oil output increase in April might undermine the commodity-link CAD and cap the downside for the pair. It’s worth noting that Canada is the largest oil exporter to the United States (US), and lower crude oil prices tend to have a negative impact on the CAD value.

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 Consumer Price Index Growth (YoY) above forecasts (1.95%) in February: Actual (2%)

23:00

South Korea Consumer Price Index Growth (MoM) above forecasts (0.2%) in February: Actual (0.3%)

22:52

Silver Price Forecast: XAG/USD extends rally closes to $33.00

Silver surges past $32.00, eyeing key resistance at $33.00 and $33.20.
RSI signals bullish strength, with price action forming higher highs and lows.
Downside risks emerge if XAG/USD drops below $32.00, with support at $31.50 and 100-day SMA at $31.21.

Silver's price rallies continued for the third straight day since bottoming last Friday near $31.81. It gained over 2.14% late during the North American session and trades at $32.63. Broad US Dollar weakness despite falling US Treasury bond yields.

XAG/USD Price Forecast: Technical outlook

The grey metal cleared the $32.00 figure and skyrocketed towards $33.00, finishing Wednesday’s session near $32.83. Momentum is skewed to the upside, with price action registering higher highs and higher lows, while the Relative Strength Index (RSI) aims higher, towards refreshing previous peaks.

Therefore, XAG/USD's first resistance would be $33.00. On further strength, key resistance levels would be exposed, like the February 20 high at $33.20m, followed by the February 14 $33.39 cycle highs.

Conversely, if XAG/USD falls beneath $32.00, the next support would be the $31.50 area before sellers could challenge the 100-day SMA at $31.21. On further weakness, the next support would be $31.00, followed by the 200-day SMA at $30.48.

XAG/USD Price Chart – Daily

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.

22:39

Canada's Foreign Minister Joly: Potentially use oil and gas exports as a lever if US tariffs continue

Canada’s Foreign Minister Melanie Joly said late Wednesday that the country could potentially use oil and gas exports as a lever if US tariffs continue, per Reuters.

Key quotes

Canada may consider using its oil and gas exports as leverage if US tariffs on Canadian imports increase.

While Canada has pledged to impose tariffs on C$155 billion worth of US imports, it has not yet suggested cutting commodity exports.

Canada currently exports around 4 million barrels of oil per day to the US. (representing about 90% of its total crude exports).

Market reaction

At the time of writing, the USD/CAD is trading 0.04% lower on the day to trade at 1.4335.

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.

21:54

USD/JPY Price Forecast: Slips below 149.00 as sellers gather steam USDJPY

Failure to hold above 149.00 opens the door for a deeper decline.
Next key support levels at 148.39 and YTD low of 148.09.
Upside potential only if buyers reclaim 149.70, with resistance at 150.00 and 151.99-152.32.

The USD/JPY reversed course on Wednesday and dropped some 0.62% late during the North American session, as sellers eyed a daily close below the 149.00 figure. At the time of writing, the pair trades at 148.86.

USD/JPY Price Forecast: Technical outlook

The USD/JPY downtrend remains intact despite buyers' efforts to drive the exchange rate above the Tenkan-Sen at 149.70. Nevertheless failure to do so, exacerbated the drope beneath 149.00 and opened the door for a re-test of the year-to-date (YTD) low of 148.09. A breach of the latter will expose the October 8 daily low of 148.39.

On the other hand, if USD/JPY buyers clear the 149.00 figure, up next lies the Tenkan-Sen at 149.70, Once hurdled, the next resistance is 150.00, and a daily close above the latter could cement the chance to challenge the confluence of the Kijun-Sen and the 200-day Simple Moving Average (SMA) around 151.99-152.32.

USD/JPY Price Chart – Daily

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.

21:45

Canadian Dollar recovers ground on tariff pivot

The Canadian Dollar rebounded nearly 1% on Wednesday.
Loonie markets are recovering as Trump administration pivots on tariffs.
Key labor figures are due at the end of the week, and NFP looms large.

The Canadian Dollar rallied hard on Wednesday, recovering almost full percent against the US Dollar. The day’s Loonie recovery has pushed USD/CAD lower, forcing bids back into the 50-day Exponential Moving Average (EMA) near the 1.4300 handle.

It took less than 48 hours, but US President Donald Trump is already exploring avenues to provide concessions or extensions for key industries that face ruin at the hands of President Trump’s sweeping tariff agenda. The White House has issued a 30-day exemption for the US automotive industry following the implementation of Donald Trump’s bespoke tariff strategy that imposed a 25% tariff on all goods imported from Canada and Mexico.

Daily digest market movers: Tariffs bode poorly for US industries as policy pivot continues

The Canadian Dollar pared recent losses, gaining nine-tenths of one percent on Wednesday.
Loonie markets are recovering ground as the Trump administration begins to pivot away from its own tariff policies.
Markets are betting on further tariff exemptions and extension in the weeks to come as the Trump administration delays tariffs on US auto makers, which are heavily reliant on foreign trade.
The Trump team is discovering just how much the US economy relies on efficient trade.
Key labor data still looms large at the end of the week with Canadian employment figures and another round of US Nonfarm Payrolls net jobs additions.
Canadian job gains are expected to slow in February, while US net job gains are expected to rebound slightly.

Canadian Dollar price forecast

The Canadian Dollar’s Wednesday rebound has dragged the USD/CAD chart back down into familiar territory, for better or for worse. The prevailing trend is a slow-motion sideways grind, with the Loonie continuously testing multi-year lows against the Greenback.

USD/CAD is inching back into the 50-day EMA at the 1.4300 handle on daily candlesticks, implying the pair could once again run out of gas. However, technical oscillators are showing that Loonie bulls still have some room to run and try to drag USD-based pairs even lower.

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.

21:25

NZD/USD Price Analysis: Bulls take control as momentum shifts higher NZDUSD

NZD/USD surged ahead of the Asian session, reclaiming ground near the 0.5720 zone after strong buying interest.
The pair climbed above its 20-day SMA, signaling a potential shift in momentum as the RSI moved into positive territory.

NZD/USD extended its advance on Wednesday, rallying sharply and positioning itself above a key technical level. The pair was last seen trading near the 0.5720 region ahead of the Asian session, posting strong gains as buyers regained control. After a prolonged period of selling, momentum appears to be shifting, as technical indicators suggest a more constructive outlook.

The Relative Strength Index (RSI) has moved into positive territory, reflecting increasing bullish momentum, while the Moving Average Convergence Divergence (MACD) remains in negative territory but prints flat red bars, signaling a slowdown in bearish pressure. More importantly, the pair has successfully risen above its 20-day Simple Moving Average (SMA), a key level that had previously acted as resistance.

Looking ahead, immediate resistance lies around the 0.5750 zone, with a break above this level potentially opening the door for further upside toward 0.5800. On the downside, the 20-day SMA, now acting as support near 0.5680, will be crucial. If buyers manage to keep the pair above this threshold, the bullish outlook could remain intact.

NZD/USD daily chart

21:13

AUD/JPY Price Analysis: Buyers take control as sellers lose steam

AUD/JPY edged higher ahead of the Asian session, stabilizing near the 94.00 zone after recent losses.
Tuesday’s price action suggested that sellers hit a strong support area, paving the way for a potential consolidation.
Key resistance aligns near 95.00, while support remains at the recent low around 93.60.

AUD/JPY showed signs of recovery on Wednesday, inching higher after a prolonged bearish run. The pair was last seen trading around the 94.50 region ahead of the Asian session, attempting to regain ground following a steep decline. Sellers dominated earlier sessions, but Tuesday’s price action indicated exhaustion as they failed to drive prices lower. This shift has given buyers an opportunity to step in, potentially setting up a consolidation phase.

Technical indicators reflect this transition. The Relative Strength Index (RSI) is rebounding sharply from negative territory, suggesting that selling momentum is easing. Meanwhile, the Moving Average Convergence Divergence (MACD) is still printing decreasing red bars, indicating that downside pressure remains but is gradually fading. If bullish momentum builds, a test of the 94.50-95.00 resistance could follow.

From a technical perspective, immediate resistance is seen near 95.00, aligning with a previous reaction zone. A breakout above this level could push the pair toward the 95.00 handle. On the downside, initial support is located around 93.60, with a move below this threshold potentially reigniting bearish pressure. However, given the signs of stabilization, the near-term outlook appears to favor sideways trading as the market digests recent losses.

AUD/JPY daily chart

21:00

South Korea FX Reserves fell from previous 411B to 409.21B in February

20:52

Gold price steadies as markets weigh tariff uncertainty, Fed outlook

XAU/USD holds firm as speculation grows over Trump’s potential tariff rollback.
Gold fluctuates around $2,910 amid mixed economic signals and policy uncertainty.
US ADP jobs data disappoints, while ISM Services PMI shows inflation risks persist.
Traders eye US Nonfarm Payrolls data Friday for Fed rate-cut clues.

Gold price remains firm on Wednesday amid speculation that the President of the United States (US), Donald Trump, could roll back some tariffs, at least duties on automobiles linked to the USMCA free trade agreement. Nevertheless, uncertainty remains, and XAU/USD trades at $2,919, virtually unchanged.

Bullion prices had been seesawing around the $2,910 mark during the North American session as the news flow continued. The Federal Reserve (Fed) revealed the Beige Book in anticipation of the upcoming monetary policy, stating that overall economic activity rose, yet prices are higher amid Trump trade policies.

Data-wise, ADP revealed that private hiring in February slowed sharply compared to January’s figures. Meanwhile, according to February's latest ISM Services PMI, businesses continued to expand healthily. Despite this, fears that inflation could reaccelerate remained, as Prices Paid, a sub-component of the PMI, jumped above the 60 level, hinting that producers are paying higher prices, which could stoke a second round of inflation.

Meanwhile, recently revealed US data sparked recessionary fears. The Atlanta Fed GDPNow Model projects the Gross Domestic Product (GDP) for Q1 2025 at -2.8%, down from 1.6% estimated on Monday.

Regarding geopolitics, an aide of Ukraine President Zelensky discussed steps to achieve peace with the US National Security Advisor as Ukraine and the US agreed on a meeting soon.

This could push Gold prices lower, alongside higher US Treasury bond yields. Traders will be eyeing Friday's release of February’s Nonfarm Payrolls figures, with analysts projecting 160K jobs added to the workforce.

Daily digest market movers: Gold price consolidates amid mixed US data

The US 10-year Treasury note climbs four basis points (bps) to 4.28%.
US real yields, as measured by the US 10-year Treasury Inflation-Protected Securities (TIPS) yield, are rising four and a half bps up to 1.935%.
The ADP National Employment Change report showed that US private sector hiring increased by 77K in February, significantly missing the 140K forecast and falling well below January’s strong 186K gain.
Meanwhile, the ISM Services PMI expanded to 53.5 in February, exceeding expectations of 52.6 and improving from January’s 52.8, signaling continued growth in the services sector.
Money market traders had priced in 71.5 basis points of easing in 2025, down from Tuesday’s 81 bps, via data from the Prime Market Terminal.

Source: Prime Market Terminal

XAU/USD technical outlook: Gold price holds firm above $2,900

Gold prices stalled on Wednesday after registering two consecutive bullish days. Nevertheless, momentum is shifted to the upside, with the Relative Strength Index (RSI) trending up in bullish territory. That said, Bullion’s path of least resistance is a continuation of the uptrend.

XAU/USD next resistance would be $2,950, followed by the record high at $2,954. A breach of the latter can expose the $3,000 mark. On the other hand, a daily close below $2,900, could put the uptrend at risk and open the door for a “healthy” pullback.

That said, Gold’s first support would be the February 28 low of $2,832, followed by the $2,800 figure.

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.

20:47

Australian Dollar holds gains as US Dollar remains subdued after ISM Services PMI and jobs data

The pair advanced by roughly 0.75% during Wednesday’s American session, trading in the mid-0.6300 zone following fresh US data.
The Aussie is up nearly 1.40% intraday, contending with the 20-day moving average that could shift the near-term outlook if reclaimed.
President Donald Trump’s 10% tariff on China, along with earlier duties, poses a risk to the Australian Dollar’s upside.

The Australian Dollar (AUD) strengthened on Wednesday, with the AUD/USD pair gaining traction after the United States (US) reported mixed ISM Services PMI and softer ADP Employment Change figures. The US Dollar (USD) remains under pressure amid concerns over slowing economic momentum, keeping the Aussie buoyed.

Daily digest market movers: Post-ISM, ADP data shape currency flows amid tariff warnings

Renewed US tariffs on Chinese imports add more strain to global risk sentiment. The 10% levy from President Donald Trump compounds earlier duties and the potential for Chinese retaliation remains high, particularly concerning for commodity-linked currencies like the Aussie, given China’s status as Australia’s largest trade partner.
On the US data front, the ISM Services PMI showed continued expansion at 53.5, while the ADP report indicated softer private-sector job gains compared to forecasts. These mixed signals weigh on the US Dollar, as traders assess the likelihood of Federal Reserve (Fed) policy adjustments in response to possible economic headwinds.
The Reserve Bank of Australia (RBA) has held off announcing more rate cuts since lowering the Official Cash Rate by 25 basis points to 4.10% in February, reiterating concerns about inflation. Market expectations for additional easing remain uncertain, depending on upcoming data.
Investors cautiously evaluate riskier assets as the US Dollar’s softness fails to spark a strong Aussie rally. Demand for Australian commodity exports could suffer if trade conflicts escalate. Meanwhile, the Aussie retains some bullish impetus on the back of the subdued Greenback.

Technical analysis: Pair challenges 20-day SMA amid momentum shift

The AUD/USD pair advanced by about 1.40% to roughly 0.6333 on Wednesday’s American session, recovering from intraday lows following the release of the ISM Services PMI and ADP reports. The Moving Average Convergence Divergence (MACD) prints decreasing red bars, indicating ebbing seller strength, while the Relative Strength Index (RSI) lies in the upper 50s, climbing sharply from lower levels.

With the Aussie up nearly 1.40% on the day, reclaiming the 20-day moving average would mark an improvement in its short-term prospects. However, if new tariff developments undermine risk appetite, the pair may retreat toward support around the 0.6250 region, with a more robust floor near 0.6200. Resistance emerges above 0.6350, where any breach could bolster near-term bullish momentum.

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.

19:59

Forex Today: No surprises expected at the ECB meeting

The downtrend in the US Dollar gathered extra steam on Wednesday, fuelled by concerns over the US economy and some renewed hopes that the Trump administration could delay some planned tariffs.

Here is what you need to know on Thursday, March 6:

The US Dollar Index (DXY) broke below the 105.00 support, reaching news four-month lows amid further concerns over the US economy. The January Balance of Trade results are due, seconded by Challenger Job Cuts, the usual weekly Initial Jobless Claims, and Unit Labor Costs. In addition, the Fed’s. Waller and Harker are due to speak.

EUR/USD extended its solid performance to the vicinity of the 1.0800 barrier, or new four-month peaks. The ECB’s interest rate decision will take centre stage, along with Lagarde’s press conference. Data wise, the HCOB Construction PMI in Germany and the euro area will be released along with Retail Sales in the whole bloc.

GBP/USD climbed to just pips away from the key barrier at 1.2900 the figure, or multi-month tops. The S&P Global Construction PMI will be the sole release across the Channel, followed by the speech by the BoE’s Mann.

USD/JPY resumed its downtrend and revisited the low-148.00s following the sharp pullback in the Greenback. The weekly Foreign Bond Investment figures will be published.

AUD/USD rose markedly, advancing for the third straight day and reclaiming the area beyond the 0.6300 hurdle. The Balance of Trade results are expected, seconded by flash prints of Building Permits and Private House Approvals.

Prices of the barrel of WTI dropped to new lows near the $65.00 mark in response to an increased in US crude oil supplies, tariff concerns and the expected OPEC+ intention to increase the oil output in April.

Gold prices hit their third straight day of gains, retesting the $2,920 zone following the sharp decline in the US Dollar. Silver prices rallied further north of the $32.00 mark per ounce, flirting with eight-day highs.

19:43

Fed's Beige Book: Price increases ahead of tariffs could spell trouble for inflation

The Federal Reserve's (Fed) Summary of Commentary on Current Economic Conditions by Federal Reserve District, colloquially known as the Beige Book, is a collection of anecdotal information regarding inflation, employment, and general economic conditions within each Fed Bank's district. The Beige Book is collected and publicized eight times per year, released roughly two weeks before each Fed rate decision.

The Beige Book is broadly considered the least-impactful of the three 'Books' distributed by the Fed, however the Beige Book is the only version that is publicly-available. Normally a no-noteworthy release, March's Beige Book is carrying additional weight as US President Donald Trump's trade war aspirations are starting to produce cracks within the US economy well before they've reached their full effect, or even fully implemented.

Key highlights

Overall expectations for economic activity over the coming months were slightly optimistic.

Prices increased moderately in most districts, but several districts reported an uptick in the pace of increase relative to the previous reporting period.

US economic activity rose slightly since mid-January.

Employment was slightly higher on balance, with stricts mixed.

Wages rose at a modest to moderate pace, prices went up moderately.

Contacts in most districts expected potential tariffs on inputs would lead them to raise prices, with isolated reports of firms raising prices preemptively.

19:03

US White House Press Secretary Leavitt: Trump will give auto industry an extension on tariffs

According to US White House Press Secretary Karoline Leavitt, US President Donald Trump is granting the US automotive industry, which is incredibly dependent on foreign trade, a one-month exemption from this week's stiff 25% tariffs imposed on Canada and Mexico.

The White House administration has also tilted toward other possible exemptions or delays as the Trump team continues to prove markets right and pivots once again on the majority of its own threats to impose stiff import taxes on its own citizens.

Key highlights

Trump spoke with the heads of the big three automakers.

Reciprocal tariffs still going into effect April 2nd.

Trump is open to hearing about additional tariff exemptions.

The Trump administration is doing everything they can on inflation.

National Security Adviser Waltz has been talking to his Ukrainian counterparts.

Reconsidering funding for Ukraine.

Talks on the mineral deal are happening.

US/Ukraine talks are happening as we speak.

18:23

US Dollar extends losing streak as weak labor data fuels selloff

DXY drops over 2.5% this week as selling pressure intensifies.
ADP employment data misses expectations, showing hiring slowdown.
ISM Services PMI beats forecasts, signaling economic resilience.
Technical indicators suggest further downside as key support levels break.

The US Dollar Index (DXY), which tracks the Greenback’s performance against six major currencies, is extending its decline for the third consecutive day on Wednesday. The weaker-than-expected labor market data, coupled with rising trade tensions and policy uncertainty, is pushing the US Dollar further down.

While the services sector remains robust, the market is focusing on the ADP employment shortfall, reinforcing expectations of a slowing economy. So far, the DXY has depreciated over 2.5% this week, with no immediate signs of reversal.

Daily digest market movers: US Dollar weakens amid labor concerns

DXY plunges below key levels, marking the lowest point since November 2024.
ADP employment report shows the US private sector added only 77K jobs, missing expectations of 140K.
On the positive side, ISM Services PMI rises to 53.5, exceeding forecasts and showing continued economic expansion.
That being said, inflationary pressures persist, with the Prices Paid Index climbing to 62.6 from 60.4.
Employment Index within ISM data improves, rising to 53.9 from 52.3.
CME FedWatch Tool indicates increased rate cut expectations for later this year and investors may start betting on 100bps of easing in 2025.

DXY technical outlook: Bearish momentum intensifies

The US Dollar Index (DXY) continues to slide, falling below both the 20-day and 100-day Simple Moving Averages (SMA), which are nearing a bearish crossover around 107.00. The completion of this pattern could reinforce further downside pressure, leaving the US Dollar vulnerable to further declines.

The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) continue pointing lower, confirming bearish momentum. With the index now at levels not seen since November 2024, a sustained break below 106.00 could open the door for a move toward 105.50 and beyond.

Employment FAQs

How do employment levels affect currencies?

Labor market conditions are a key element in assessing the health of an economy and thus a key driver for currency valuation. High employment, or low unemployment, has positive implications for consumer spending and economic growth, boosting the value of the local currency. Moreover, a very tight labor market – a situation in which there is a shortage of workers to fill open positions – can also have implications on inflation levels because low labor supply and high demand leads to higher wages.

Why is wage growth important?

The pace at which salaries are growing in an economy is key for policymakers. High wage growth means that households have more money to spend, usually leading to price increases in consumer goods. In contrast to more volatile sources of inflation such as energy prices, wage growth is seen as a key component of underlying and persisting inflation as salary increases are unlikely to be undone. Central banks around the world pay close attention to wage growth data when deciding on monetary policy.

How much do central banks care about employment?

The weight that each central bank assigns to labor market conditions depends on its objectives. Some central banks explicitly have mandates related to the labor market beyond controlling inflation levels. The US Federal Reserve (Fed), for example, has the dual mandate of promoting maximum employment and stable prices. Meanwhile, the European Central Bank’s (ECB) sole mandate is to keep inflation under control. Still, and despite whatever mandates they have, labor market conditions are an important factor for policymakers given their significance as a gauge of the health of the economy and their direct relationship to inflation.

18:19

Mexican Peso surges as rumors swirl over tariff rollback

Mexican Peso rebounds 0.92% after hitting a four-week high at 20.99
Trump administration reportedly considering a one-month tariff delay for automakers.
Mexico’s economy weakens, with Banxico’s GDP forecast cut to 0.81%.
Goldman Sachs warns Mexico’s GDP could shrink by up to 4% if tariffs remain.

The Mexican Peso (MXN) is recovering some ground against the US Dollar (USD) on Wednesday, on rumors that tariffs imposed by the United States (US) since March 4 could be rolled back or at least adjusted, according to US Commerce Secretary Howard Lutnick. Therefore, the USD/MXN pair retraced after hitting a four-week high of 20.99, trading at 20.38, down over 0.92%.

Bloomberg reported that the Trump administration could be considering another one-month delay of tariffs for automakers in Mexico and Canada, according to people familiar with the matter. The emerging market currency recovered after weakening 2.61% on Tuesday, clawed back, and is up 0.67% in the week, as USD/MXN tests the 100-day Simple Moving Average (SMA) at 20.32.

On Tuesday, 25% tariffs became effective for Mexican imports and sent the Peso plunging. Nevertheless, it seems discussions continued while Mexican President Claudia Sheinbaum said that retaliations will be unveiled on Sunday.

Meanwhile, data shows the Mexican economy continues to deteriorate as Gross Fixed Investment fell in December on monthly and yearly readings. Banco de Mexico’s (Banxico) private analysts' survey revealed that economists project the economy to grow 0.81%, down from a 1% estimate in January 2025.

According to El Financiero, Mexico’s economy is in the midst of a recession, and the Gross Domestic Product (GDP) could contract up to 4% if Trump’s tariffs remain.

Alberto Ramos, Chief Economist for Latin America at Goldman Sachs, stated that even in a scenario with a combined impact of trade policy uncertainty and partial retaliation, Mexico's GDP could shrink by 3% to 3.5%, and inflation could reaccelerate.

However, the Mexican Peso gained steam on Wednesday, a relief rally as traders await an update on tariffs on Mexico.

The Institute for Supply Management (ISM) Services PMI for February revealed that business activity improved. Meanwhile, US jobs data was dismal across the border, spurring fears of a possible recession.

Daily digest market movers: Mexican Peso rallies amid soft US Dollar

Mexico’s Gross Fixed Investment in December dropped from 0.1% to -2.6% MoM. In the twelve months to December, the figures deteriorated further from -0.7% to -4%.
Banco de Mexico's (Banxico) private economists' showed that headline inflation is forecast to end at 3.71%, slightly lower than the previous 3.83%, while core CPI is expected to finish at 3.75%, unchanged from the prior estimate.
Economists now predict the USD/MXN pair exchange rate to close in 2025 at 20.85, slightly lower than the 20.90 projection in the previous survey. However, for 2026, they anticipate a sharper depreciation of the Peso, well beyond the 21.30 level expected in January’s poll.
In the US, the ADP National Employment Change showed that private hiring rose by 77K, less than estimates of 140K and well below January’s outstanding 186K increase.
The ISM Services PMI in February expanded by 53.5, above forecasts of 52.6, up from January’s 52.8.
Hence, money market traders had priced in 81 basis points of easing in 2025, up from last week’s 70 bps, via data from the Chicago Board of Trade (CBOT).
Trade disputes between the US and Mexico remain front and center. If countries could come to an agreement, it could 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 surges as USD/MXN drops below 20.40

The Peso recovery has driven the USD/MXN pair towards the 100-day SMA, which if cleared, could pave the way for testing the 20.00 psychological barrier. Due to trade headlines suggesting a “possible” delay on tariffs, momentum shifted bearish as seen in the Relative Strength Index (RSI). That said, the path of least resistance near-term favors further appreciation for the Mexican currency.

The next support would be 20.00. If surpassed, the next demand zone would be the 200-day SMA at 19.54. Otherwise, if USD/MXN climbs past 20.50, it could exacerbate a rally towards the March 4 peak at 20.99. Up next lies the year-to-date (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.

18:19

Dow Jones Industrial Average tries to get off the mats on Wednesday

The Dow Jones gained 300 points from Tuesday’s tumble.
Equities remain tepid as investors hope for signs of easing trade war tensions.
Services PMI figures beat the street, but ADP payrolls figures missed the mark.

The Dow Jones Industrial Average (DJIA) bounced from this week’s steep two-day plunge, recovering slim ground as investors try to prop the market back up. Equities took a hit after United States (US) President Donald Trump finally let his own tariffs on Canada, Mexico, and China take effect, but investors are hoping for another round of concessions and delays to ease trade war pressures.

USD ADP Employment Change payroll changes came in far below expectations, showing far fewer new jobs in February than median market forecasts. ADP showed just 77K net new job additions in February, well below March’s revised print of 186K, and flubbing the forecast of 140K. Despite the downside print, not all hope is lost for this week’s Nonfarm Payrolls (NFP) jobs report: the monthly ADP Employment Change has suffered a terrible run of non-correlation with NFP results ever since ADP changed their reporting and measurement methodology in 2022, so a bad or good print fails to signal much of anything at all.

Rumors are swirling that President Trump is all set to begin pivoting on his own tariff packages. The Trump administration is reportedly weighing a one month tariff exclusion for the entire automotive industry, and the ongoing cycle of talking tough but delay and concede looks set to continue in the near term.

Dow Jones news

Most of the Dow Jones’ listed securities are testing into the high side on Wednesday, looking to stage a recovery following this week’s tariff-inspired weakness. Chevron (CVX) fell 1.8%, slipping below $150 per share after the Trump administration stripped away the energy conglomerate’s license to operate in Venezuela. Ostensibly, the Trump team feels Venezuelan President Nicolás Maduro has not done enough to reform the country’s electorate in the US’ image and is not generally willing to accept deported migrants who may or may not actually be Venezuelan.

Dow Jones price forecast

The Dow Jones managed to stop the bleeding this week, at least for now. Price action is battling it out to try and keep a foothold in the 43,000 level after catching a rough bounce from the 42,400 level.

The DJIA is dangerously close to making physical contact with the 200-day Exponential Moving Average (EMA) for the first time in over two years. However, the 200-day EMA is beginning to show signs of slowing, which could give bidders a chance to gather their feet beneath them and carry on the trend of outrunning the key moving average.

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.

16:27

Gold Price Forecast: XAU/USD trades around $2,930 amid escalating trade war

XAU/USD Current price: $2,929.08

Trade war tensions and poor United States data put the USD into sell-off mode.
The European Central Bank will announce its monetary policy decision on Thursday.
XAU/USD resumed its advance and aims to retest record highs.

XAU/USD trades near a fresh weekly high of $2,929.65, with higher highs in sight. The bright metal benefited from the broad US Dollar’s (USD) weakness, the latter affected by tepid United States (US) data and President Donald Trump’s massive tariffs in trade partners.

President Trump addressed Congress late on Tuesday and played down the potential negative effects of his latest round of tariffs. “. There'll be a little disturbance, but we're okay with that. It won't be much,” Trump said, adding that reciprocal tariffs on trading partners will come into effect on April 2

Still, US Commerce Secretary Howard Lutnick suggested Trump’s administration may reduce or even roll back tariffs on the two neighbouring countries, spurring risk appetite throughout the first half of the day and harming the USD.

The Greenback fell further after the release of the US ADP Employment Change report, showing that the private sector added 77K new positions in February, much worse than the previous 183K or the expected 140K. The ISM Services Purchasing Managers’ Index (PMI), on the other contrary, jumped to 53.5 in February from 52.8 in the previous month while surpassing expectations of 52.6.

The focus now shifts to the European Central Bank (ECB) expected to deliver another 25 basis points (bps) interest rates cut when it announces its decision on monetary policy on Thursday. Other than that, investors will keep an eye on trade-war developments.

XAU/USD short-term technical outlook

The daily chart for XAU/USD shows it trades around its daily opening, while an intraday dip was quickly reverted, suggesting buyers are taking advantage of dips. The same chart shows Gold develops above all its moving averages, with a flat 20 Simple Moving Average (SMA) providing near-term support at around $2,906.25. Technical indicators, in the meantime, have turned directionless, with the Momentum indicator stuck around its 100 level.

The near-term picture shows the risk skews to the upside. In the 4-hour chart, XAU/USD pair is holding at the upper end of its recent range while advancing above all its moving averages. A bullish 20 SMA provides intraday support in the $2,890 area, while advancing below a still flat 100 SMA. Finally technical indicators turned firmly north within positive levels, reflecting persistent buying interest.

Support levels: 2,894.25 2,876.90 2,858.70

Resistance levels: 2,927.90 2,941.40 2,956.10

16:00

Russia Unemployment Rate came in at 2.4%, above expectations (2.3%) in January

15:38

EUR/USD Price Analysis: Bulls tighten grip as pair surges to multi-month highs EURUSD

EUR/USD extended its rally after the European session, trading near fresh multi-month highs above key moving averages.
The pair has surged more than 3.70% in the week, shifting the outlook decisively in favor of buyers.

EUR/USD gained significant ground on Wednesday, pushing further into bullish territory after an already strong performance in recent sessions. The pair saw renewed demand during the European session, soaring to its highest level since November. With price action now firmly above the 20, 100, and 200-day Simple Moving Averages (SMAs), buyers appear to be in control, reinforcing an upward bias.

Technical indicators reflect this bullish momentum. The Relative Strength Index (RSI) is rising sharply and hovers near overbought territory, suggesting strong buying pressure. Meanwhile, the Moving Average Convergence Divergence (MACD) has printed a fresh green bar, further confirming the shift in sentiment. Given the magnitude of recent gains, a period of consolidation or mild pullback cannot be ruled out in the short term.

Looking at key levels, immediate resistance is seen near 1.0730, a zone that could determine whether the bullish run extends further. On the downside, initial support lies around 1.0505, with stronger buying interest expected near the 100-day SMA. A move below these levels could indicate a pause in bullish momentum, though the broader outlook remains positive as long as price action holds above key trend-defining SMAs.

EUR/USD daily chart

15:32

BoE’s Pill: Size and pace of further easing will hinge on inflation

BoE’s Chief Economist Huw Pill spoke before lawmakers in Parliament.

Key Quotes

We do need to remain vigilant to new shocks that might hurt path back to 2% inflation.

Evidence points against more rapid cuts in bank for me.

Further progress in disinfaltion would permit further cuts this year.

Size and pace of cuts will depend on how inflation risks evolve.

15:30

United States EIA Crude Oil Stocks Change above forecasts (-0.29M) in February 28: Actual (3.614M)

15:21

GBP/USD surges as weak US data fuels Fed rate-cut bets GBPUSD

US ADP Employment misses expectations, adding just 77K jobs in February.
ISM Services PMI improves to 53.5, but rising prices fuel inflation concerns.
BoE officials signal caution on rate cuts, keeping GBP supported.

The Pound Sterling extended its gains versus the US Dollar on Wednesday, as market participants punished the latter. Market participants priced in additional monetary policy easing by the Federal Reserve. US data shows the economy is weakening, with businesses and consumers turning pessimistic, mostly on trade policies. The GBP/USD trades at 1.2864, up over 0.55%.

Sterling jumps 0.55% to 1.2864 as traders punish the US Dollar

The US jobs market continues to slow down, as depicted by the ADP Employment Change for February. Companies added 77K people to the workforce, missing estimates of 140K and well below the 188K hired in January.

In the meantime, the ISM Services PMI in February rose by 53.5, up from 52.8, exceeding forecasts of 52.6, an indication of business expansion. The Prices Paid sub-component rose sharply from 60.4 in January to 62.6, with New Orders and the Employment Index following suit.

GBP/USD traders have ignored the recent US data so far. Nevertheless, interest rate traders had priced in 74.5 basis points of Fed easing in 2025, down from the 81 bps expected a day ago.

Meanwhile, some Bank of England (BoE) members are crossing wires. Megan Greene commented that inflation is unlikely to persist and that it would fade at its own pace, though she added that policy needs to remain restrictive. BoE MPC member Alan Taylor said every meeting would be live for rate moves.

In the meantime, BoE Governor Bailey said they expect a pick-up in inflation. BoE Chief Economist Huw Pill added they need to remain vigilant and that evidence points against more rapid cuts in the Bank Rate.

The GBP/USD retreated somewhat on the headlines but remains within the 1.2850 – 1.2870 range.

GBP/USD Price Forecast: Technical outlook

The GBP/USD shifted from neutral to upward biased after clearing the 200-day Simple Moving Average (SMA) at 1.2786. A daily close would cement the uptrend and pave the way to challenge the 1.3000 mark. Otherwise, failure to close above the 200-day SMA will clear the way to test the 1.2700 figure.

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.

15:16

BoE’s Bailey: Second round inflation effects look less likely

15:05

US ISM Services PMI rises to 53.5 in February vs. 52.6 expected

ISM Services PMI improved to 53.5 in January.
US Dollar stays under heavy selling pressure despite the upbeat PMI report.

The economic activity in the US service sector continued to expand an accelerating pace in February, with the ISM Services PMI rising to 53.5 from 52.8 in January. This reading came in above the market expectation of 52.6.

Other details of the report showed that the Prices Paid Index, the inflation component, rose to 62.6 from 60.4, while the Employment Index improved to 53.9 from 52.3.

Market reaction

The US Dollar struggles to benefit from the upbeat ISM Services PMI data. At the time of press, the US Dollar Index was down 0.9% on the day at 104.55.