Forex News
Geoff Yu at BNY highlights that Latin American (LatAm) equities have attracted strong inflows thanks to improved terms of trade and resilient currencies. However, higher real rates and tighter financial conditions could eventually pressure earnings, potentially triggering softer equity performance and increased currency hedging demand.
Regional stocks resilient but vulnerable
"LatAm economies are also exposed to higher energy prices, but there’s a clearer case for terms-of-trade improvement due to better supply resilience and increased demand for their own raw exports."
"This helped LatAm currencies withstand the shock from the first weeks of the conflict."
"Consequently, the region is still seeing strong inflows into equities, but we’re mindful that equities normally have an inverse relationship with real rates."
"Corporates and households will face tight financial conditions in the near term."
"If this starts to weigh on earnings, we’d expect some softness or at least a pickup in currency hedging."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
OCBC's FX Strategist Christopher Wong observes the Dollar Index (DXY) remains supported as higher UST yields and a softer risk tone underpin demand for the greenback. Christopher Wong emphasises the move is driven more by rates and risk-off dynamics than strong US fundamentals. He notes USD may stay bid near term, but upside could fade if yields turn lower and upcoming US data soften.
Greenback buoyed by higher yields
"USD regained some footing as higher UST yields and a softer risk tone brought back demand for the greenback."
"The latest move still looks rates-led, with long-end yields staying elevated. This move is less driven by a strong US fundamental story but more due to rates/risk-off story. So in the interim, USD may stay bid but the move may not extend if yields turn lower."
"There is no tier-1 data today, focus this week on FOMC minutes, US flash PMIs, initial jobless claims (21 May). The minutes may provide some colour on officials’ concern over inflation persistence while the PMIs will test whether US activity momentum is holding up or starting to soften under tighter financial conditions. A softer PMI print or less hawkish read from the minutes would be needed to take some heat out of the recent move."
DXYwas last at 99.30 levels. Daily momentum is bullish while RSI is near overbought conditions. Resistance here at 99.40 (23.6% fibo), 100.50/60 levels (2026 high). Support at 98.30/50 levels (21, 100, 200 DMAs), 98.10 (50% fibo retracement of 2026 low to high) and 97.50/60 levels (double bottom, 61.8% fibo retracement of 2026 low to high).
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Scotiabank’s strategists Shaun Osborne and Eric Theoret report that USD/CAD is trading around 1.3773 as the Canadian Dollar (CAD) underperforms following a downside Consumer Price Index (CPI) surprise. They note the data keep the Bank of Canada (BoC) on hold even as global price pressures loom, while front-end spreads widen and the pair trades more than one standard deviation above its fair-value estimate near 1.3567.
CAD pressured after soft CPI
"The CAD has failed to pick up any of the positive sentiment that has lifted the MXN, AUD and NZD even modestly so far today. Yesterday’s CPI data surprised on the downside and continues to weigh on the CAD. There was unexpected softness in some categories (services, for example) helping dampen prices and overwhelm significant gains elsewhere (core goods). "
"The data point to the Bank remaining on the policy sidelines for now but rising global price pressures are unlikely to pass Canada by in the months ahead."
"Front-end swap spreads have widened and our estimate for the CAD’s fundamental equilibrium has drifted a little higher today (1.3567). The USD remains significantly (more than one standard deviation) above its fair value estimate, however."
"Bullish—USD gains through the 50% retracement resistance (1.3758) derived from the March 31/May 1 decline in funds support the near-term outlook for more USD strength towards 1.3800/15. Yesterday’s CPI data surprised on the downside and continues to weigh on the CAD."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- EUR/GBP falls for a third consecutive day as traders reassess the interest rate outlook following the latest inflation data from the Eurozone and the United Kingdom.
- Eurozone inflation accelerated to 3.0% in April, while ECB’s Wunsch signaled that further policy tightening is likely.
- UK inflation and employment data cooled more than expected, prompting traders to trim Bank of England rate hike bets.
The Euro (EUR) weakens against the British Pound (GBP) on Wednesday, with EUR/GBP extending losses for a third consecutive day as traders digest the latest inflation data from both the United Kingdom and the Eurozone. At the time of writing, the cross is trading around 0.8654, hovering near one-week lows.
Data released by Eurostat showed that the Eurozone Harmonized Index of Consumer Prices (HICP) rose to 3.0% YoY in April from 2.6% in March, driven largely by higher energy prices, while Core HICP eased to 2.2% YoY in April from 2.3% in the previous month.
Inflation remaining above the European Central Bank’s (ECB) 2% target for a second consecutive month has reinforced expectations that policymakers could be forced to raise interest rates in the coming months, with markets currently pricing in the possibility of two to three rate hikes by year-end. However, concerns that higher energy costs and the Eurozone’s heavy dependence on imported energy could slow economic growth may limit the ECB’s ability to tighten monetary policy too aggressively.
ECB policymaker Pierre Wunsch said on Wednesday that the Eurozone is “at the beginning of an inflation problem” and that the ECB “will have to react at some point.” Wunsch added that the likelihood of a June rate hike is “quite high” and said market expectations for around 75 basis points of additional tightening this year are “reasonable.”
In the United Kingdom, the Consumer Price Index (CPI) slowed to 2.8% YoY in April from 3.3% in March, missing market expectations of 3.0%, while Core CPI eased to 2.5% YoY from 3.1% previously, coming in below forecasts of 2.6%.
Following the release, and combined with softer employment data released on Tuesday, traders trimmed some Bank of England (BoE) rate hike expectations, with BHH reporting that the swaps curve is now pricing around 66 basis points of tightening over the next 12 months, down from 75 basis points previously.
The softer UK inflation figures give the BoE more room to assess the impact of rising Oil prices on the economy while still keeping future rate hikes on the table. Meanwhile, expectations that UK interest rates could remain relatively higher than those in the Eurozone continue to support the Pound against the Euro in the near term.
Traders are also monitoring political developments in the United Kingdom amid speculation surrounding a potential leadership change, which could weigh on Sterling sentiment if uncertainty intensifies.
Pound Sterling 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 Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.10% | -0.03% | -0.03% | 0.12% | -0.21% | -0.12% | 0.18% | |
| EUR | -0.10% | -0.14% | -0.13% | 0.02% | -0.33% | -0.21% | 0.08% | |
| GBP | 0.03% | 0.14% | 0.00% | 0.18% | -0.21% | -0.09% | 0.21% | |
| JPY | 0.03% | 0.13% | 0.00% | 0.17% | -0.17% | -0.07% | 0.23% | |
| CAD | -0.12% | -0.02% | -0.18% | -0.17% | -0.34% | -0.20% | 0.06% | |
| AUD | 0.21% | 0.33% | 0.21% | 0.17% | 0.34% | 0.12% | 0.38% | |
| NZD | 0.12% | 0.21% | 0.09% | 0.07% | 0.20% | -0.12% | 0.29% | |
| CHF | -0.18% | -0.08% | -0.21% | -0.23% | -0.06% | -0.38% | -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 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).
- The FOMC Minutes could provide fresh clues on how divided officials were before Kevin Warsh takes over as Fed Chair.
- Investors will scrutinize whether policymakers questioned the Fed’s easing bias in April.
- Persistent inflation pressures and higher Oil prices have shifted market expectations from rate cuts toward possible tightening.
The Minutes of the United States (US) Federal Reserve’s (Fed) April 28-29 monetary policy meeting will be published on Wednesday at 18:00 GMT. The US central bank decided to leave the policy rate unchanged at the 3.50%-3.75% range at that meeting, although the decision revealed an unusually high degree of disagreement within the Committee.
Fed Governor Stephen Miran voted in favor of a 25-basis-point (bps) rate cut, while Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari and Dallas Fed President Lorie Logan dissented against maintaining an easing bias in the policy statement.
Jerome Powell and company opted to hold rates in April
The Federal Open Market Committee (FOMC) kept rates unchanged in April for a third consecutive meeting, but the focus quickly shifted to the internal divide over the future policy direction. While policymakers broadly agreed on keeping rates steady, disagreement emerged over the communication surrounding the next move.
In the post-meeting statement, the Federal Reserve retained language suggesting an easing bias, implying that future policy adjustments could still lean toward rate reductions if conditions warrant. However, several policymakers appeared increasingly uncomfortable with maintaining that message amid rising inflation risks.
Since the April meeting, the macroeconomic backdrop has shifted significantly. Inflation concerns have intensified following stronger-than-expected price data and higher energy costs linked to geopolitical tensions. Consumer Price Index (CPI) inflation accelerated to 3.8% YoY in April, its highest level in three years, while elevated Oil prices continue to fuel fears of broader price pressures.
At the same time, labor market data remains relatively resilient, reducing the urgency for policy easing. April’s Nonfarm Payrolls showed 115K new jobs created in the US, below the stellar 185K reported in March, but well above the 62K expected.
Previewing the release, Bank of America analysts expect the publication to reinforce the Fed’s recent hawkish tone. They noted that policymakers likely focused on persistent inflation risks and upside pressures linked to geopolitical developments, while Wells Fargo analysts expect the Minutes to provide additional details on whether non-voting members also viewed the next policy move as being equally likely to be a hike or a cut.
The publication could also attract additional attention because it represents the final set of Minutes linked to Jerome Powell’s tenure as Fed Chair before Kevin Warsh officially takes over leadership of the central bank.
When will FOMC Minutes be released and how could it affect the US Dollar?
The FOMC will release the Minutes of the April 28-29 policy meeting at 18:00 GMT on Wednesday.
Market expectations on interest rates have changed sharply over recent weeks. Fed funds futures have shifted away from pricing rate cuts and now reflect growing expectations that rates could remain unchanged for an extended period, with some investors even seeing the risk of higher rates later this year.
According to the FdWatch tool, the chances of a Fed 25 bps rate hike by December sit at 40.1%, against only 43.4% for a hold.
This positioning suggests that the US Dollar (USD) could react strongly if the Minutes reveal broader support for removing the easing bias or indicate that more officials discussed conditions that could eventually justify tighter monetary policy.
The Greenback could gather additional strength if policymakers express rising concerns that inflation risks are becoming more persistent, particularly if discussions show that upside risks outweigh concerns about economic growth.
Conversely, the US Dollar could come under pressure if the publication highlights that most policymakers still considered inflation shocks linked to energy prices as temporary and continued to see the next policy move leaning toward easing once price pressures moderate.
Nevertheless, any market reaction could remain limited as investors may prefer to wait for additional inflation and labor market data before reassessing expectations for the June FOMC meeting under Kevin Warsh’s leadership.
The US Dollar Index (DXY) trades at 99.43 at the time of writing. The near-term tone is bullish as price holds above both the 100-period and 200-period Simple Moving Averages (SMAs) on the 4-hour chart, reinforcing a constructive structure after breaking and moving above the prior downward trend-line resistance. Momentum is stretched, with the Relative Strength Index (RSI) hovering in overbought territory near 72, which suggests upside pressure persists but also leaves the index vulnerable to a corrective pause if buyers lose conviction just below nearby Fibonacci resistance.
On the topside, immediate resistance emerges at the 61.8% Fibonacci retracement, drawn from the March 31 high to the April 17 low, at 99.49, with a break there exposing the 78.6% Fibonacci retracement at the 100.00 round level and the recent swing high near 100.64 as a more significant barrier. On the downside, initial support aligns with the 50% retracement at 99.13, ahead of a broader demand band clustered around the 38.2% Fibonacci retracement at 98.78, the 200-period SMA near 98.59 and the 100-period SMA around 98.50, while deeper pullbacks would look to the 23.6% Fibonacci retracement at 98.34 and the prior swing low at 97.63 to limit losses.
(The technical analysis of this story was written with the help of an AI tool.)
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named 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 during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
ING strategists Francesco Pesole, Frantisek Taborsky and Chris Turner highlight that higher real US yields and a bond market sell-off are reinforcing Dollar strength. They argue the move is driven by inflation concerns, making it supportive for USD. ING sees upside risks for the Dollar, with DXY potentially breaking above 99.50, especially if FOMC minutes hint at further hawkishness.
Higher yields reinforce Dollar support
"Higher real US yields are back to driving dollar strength. Yesterday, we sensed that market patience for any improvement in the Gulf situation was thin, and the latest headlines did not dent the bearish bond momentum."
"It’s worth reiterating that, unlike in 2025, this sell-off is being driven by inflation concerns rather than fiscal fears, making it unambiguously USD positive. When we argued in February that the dollar’s decline was cyclical rather than structural, we constructed a USD safe haven gauge combining the dollar’s correlation with US equities and with 10-year Treasury yields. That measure now points to the strongest safe haven appeal for the dollar since late 2022, and the second-highest reading in our dataset back to 2005."
"Another event to watch today is the release of April’s FOMC minutes, which will shed more light on the reasoning for the three dissenters who preferred a less dovish message. Any hints that went as far as adding rate hikes to the discussion could underpin the recent hawkish repricing and add support for the dollar."
"As a result, upside risks to USD remain dominant unless genuinely constructive news emerges from the Gulf. Reports yesterday that NATO is considering intervention in the Strait of Hormuz to support vessel passage failed to lift risk assets in any meaningful way. A break above 99.50 in DXY remains a realistic outcome even in the absence of renewed military escalation."
"The ongoing bond market sell-off is offering ideal conditions for dollar strengthening. Markets have likely raised the bar for jumping into new de-escalation trades, and we think risks remain on the upside for USD today. In the UK, inflation surprised to the downside, lowering the probability of a BoE hike."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- NZD/USD trades around 0.5850 on Wednesday, posting a daily gain of 0.22% despite a cautious market environment.
- Safe-haven flows continue to support the US Dollar amid persistent tensions between the United States and Iran.
- The People's Bank of China leaves its benchmark lending rates unchanged as markets assess the Chinese economic outlook.
NZD/USD trades around 0.5850 on Wednesday at the time of writing, up 0.22% on the day. Despite the moderate gains, the New Zealand Dollar (NZD) upside remains limited as the US Dollar (USD) continues to benefit from defensive demand driven by geopolitical risks.
Market sentiment remains fragile following recent comments from US President Donald Trump regarding a potential resumption of military action against Iran. According to market reports, Washington could consider renewed strikes in the coming days if discussions related to the regional conflict fail to progress. Meanwhile, Iranian officials stated that any escalation would be met with an immediate response.
The strength of the US Dollar is also supported by changing monetary policy expectations. Investors continue to adjust their outlook following signs of more persistent inflation pressures in the United States (US), particularly due to energy-related risks. Markets are now pricing in a chance close to 40% of a 25-basis-point rate hike by year-end, according to the CME FedWatch tool.
At the same time, comments from policymakers continue to reinforce a cautious tone. The Federal Reserve (Fed) maintains a data-dependent approach, with several officials indicating that the current policy stance remains sufficiently restrictive to contain inflation pressures while preserving labor market stability.
Investors are also monitoring developments in China, New Zealand's largest trading partner. The People's Bank of China (PBOC) left its Loan Prime Rates unchanged for a twelfth consecutive month, keeping the one-year rate at 3% and the five-year rate at 3.5%. The decision suggests that Chinese authorities currently prefer a wait-and-see approach despite persistent signs of economic weakness.
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 Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.05% | -0.06% | -0.05% | 0.11% | -0.29% | -0.17% | 0.18% | |
| EUR | -0.05% | -0.12% | -0.11% | 0.05% | -0.35% | -0.21% | 0.11% | |
| GBP | 0.06% | 0.12% | 0.04% | 0.18% | -0.25% | -0.09% | 0.24% | |
| JPY | 0.05% | 0.11% | -0.04% | 0.16% | -0.25% | -0.11% | 0.24% | |
| CAD | -0.11% | -0.05% | -0.18% | -0.16% | -0.41% | -0.23% | 0.07% | |
| AUD | 0.29% | 0.35% | 0.25% | 0.25% | 0.41% | 0.15% | 0.47% | |
| NZD | 0.17% | 0.21% | 0.09% | 0.11% | 0.23% | -0.15% | 0.33% | |
| CHF | -0.18% | -0.11% | -0.24% | -0.24% | -0.07% | -0.47% | -0.33% |
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).
United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann keep a mildly constructive stance on USD/JPY, expecting consolidation between 158.75 and 159.25 in the near term. They note fading short-term momentum but still see potential for further upside if the pair can break and hold above 159.25, which would open the way toward 159.75 over the coming days and weeks.
Dollar-Yen needs clear break higher
"24-HOUR VIEW: We expected USD to “trade in a range between 158.50 and 159.10” yesterday. However, USD edged up to a high of 159.25 before settling at 159.07 (+0.13%). Upward momentum appears to be stalling, and we continue to expect USD to trade in a range today, most likely between 158.75 and 159.25."
"1-3 WEEKS VIEW: After holding a positive USD view since early last week, we highlighted the following yesterday (19 May, spot at 158.80): “Short-term upward momentum is starting to fade, but as long as 157.90 (‘strong support’ level) is not breached, there remains a chance for USD to rise further. That said, given the slowing short-term momentum, USD must break and hold above 159.25 before further gains are likely.” Our view remains unchanged, but the ‘strong support’ is now at 158.40. Looking ahead, a break above 159.25 would indicate that USD could continue to edge higher toward 159.75."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Rabobank's Senior FX Strategist Jane Foley note that reduced expectations for aggressive Bank of England (BoE) tightening are weighing on the British Pound (GBP), even as recent United Kingdom (UK) labour and Consumer Price Index (CPI) data have eased market nerves. The bank highlights political uncertainty around potential Labour leadership changes and maintains a 6‑month EUR/GBP target of 0.88, expecting further choppy range trading around current levels.
BoE repricing and politics weigh
"The market is no longer so confident that the BoE is on the cusp of launching an aggressive programme of interest rate hikes. The BoE’s next policy meeting is scheduled for June 18 and currently market pricing is biased towards the risk of no change on this date, although about 45 bps of tightening is priced in on a 6-month view. At one point towards the start of the Iran war, market pricing was pointing to the risk of as many of four 25 bps rate hikes this year."
"On one hand, the prospect of fewer BoE rate hikes is a GBP negative factor. However, the pound has backtracked from this month’s weakest levels vs. both the EUR and the USD in part due to assurances from potential Labour leadership contender Burnham regarding the current Chancellor’s fiscal rules. We see scope for further choppy range trading in EUR/GBP around current levels and maintain a 6-month target of 0.88."
"While any further winding back of BoE rate rise expectations would pressure the pound, UK politics has the potential to create further volatility for GBP. The Makerfield by-election is expected to take place on June 18, though this is not confirmed. If Labour candidate Burnham wins, he would be expected to launch a leadership contest which could result in a move to the soft left for the Labour party."
"While Burnham has reassured the market that he would stick to the current fiscal rules, both gilts and GBP are likely to be jittery into the summer."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
BNY’s Bob Savage highlights that Bank Indonesia (BI) surprised markets with a 50bp rate hike to 5.25% to stabilize the Rupiah (IDR). Governor Perry Warjiyo underscored intensified FX interventions and improved monetary tools to keep inflation within the 1.5–3.5% target for 2026–2027. Savage notes Gross Domestic Product (GDP) growth projections near 5% and a modest current account deficit, alongside new plans to centralize commodity exports via the sovereign wealth fund.
Pre‑emptive tightening to back Rupiah
"Bank Indonesia has raised its key interest rate by 50bp to 5.25% to stabilize the rupiah amid heightened global volatility from the Middle East conflict."
"Governor Perry Warjiyo emphasized intensified foreign exchange interventions via offshore and domestic NDFs, spot markets and improved monetary policy instruments to maintain liquidity and support rupiah stability."
"The move aims to keep inflation within the 1.5-3.5% target range for 2026-2027 despite global energy price pressures."
"GDP growth is forecast at 4.9-5.7% for 2026, supported by government spending, while the current account deficit is expected at 0.5-1.3% of GDP in 2026."
"The pressure on IDR spurred more than just a 50bp hike from Bank Indonesia today."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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