Forex News
- USD/JPY slips toward 159.30 as traders position ahead of the Bank of Japan policy announcement.
- Hawkish hold expectations lend support to the Yen despite ongoing USD safe-haven demand.
- Geopolitical tensions continue to limit downside, keeping the pair within elevated ranges.
The USD/JPY pair is trading near the 159.30 price zone as markets are increasingly positioning for a hawkish hold from the BoJ, with policymakers expected to keep the benchmark rate unchanged at 0.75% while signaling a willingness to tighten further. This shift in expectations is helping the Yen recover slightly, even as broader policy divergence with the Federal Reserve (Fed) continues to favor the US Dollar (USD).
The ongoing Middle East conflict continues to underpin safe-haven demand for the Greenback, with uncertainty showing little sign of easing as the war approaches its two-month mark. Elevated energy prices and geopolitical risks are keeping global markets cautious, supporting the USD on dips.
Short-term technical analysis:
On the four-hour chart, USD/JPY trades at 159.29. The pair is hovering just above a dense support band between roughly 159.27 and the 100-period Simple Moving Average (SMA) at 159.21, but the pair remains capped by nearby resistance at 159.30 and the 20-period SMA at 159.47. Taken together, the price dynamic hints at a consolidative, slightly topside-capped tone. The Relative Strength Index (14) around 47 suggests momentum has eased back toward neutral, aligning with a pause rather than a clear directional break for now.
On the downside, immediate support emerges at 159.27, followed by the 159.20 horizontal level clustered around the 100-period SMA at 159.21, while a clearer bearish extension would only be suggested on a break under the lower support area near 159.10.
(The technical analysis of this story was written with the help of an AI tool.)
- DJIA futures eased on Monday as Iran ceasefire hopes faded and Oil prices climbed back toward multi-month highs.
- West Texas Intermediate and Brent both jumped roughly 3% after Trump scrapped a planned envoy trip to Pakistan for Iran talks.
- The Federal Reserve is widely expected to hold rates steady on Wednesday in what is likely Jerome Powell's final meeting as chair.
- A flood of Magnificent Seven earnings and Thursday's Personal Consumption Expenditures Price Index round out a packed macro week.
Dow Jones Industrial Average (DJIA) futures traded around 0.4% lower on Monday, slipping to near 49,100 after dipping briefly below 49,050 earlier in the session. The S&P 500 shed about 0.2%, and the Nasdaq Composite gave back roughly 0.4%, with both indexes pulling back from record highs notched on Friday. Stochastic RSI on the 5-minute chart sits in mid-range near 34, suggesting the move down still has some room before momentum stretches.
Iran impasse keeps Oil bid
The session's tone was set over the weekend, when President Trump canceled plans to send envoys Steve Witkoff and Jared Kushner to Pakistan for ceasefire talks tied to Iran. Iran's Foreign Ministry confirmed no Tehran-Washington meeting is currently scheduled, even as Axios reported Iran has floated a fresh proposal to reopen the Strait of Hormuz in exchange for deferring nuclear talks. Oil traders ran with the supply uncertainty: WTI futures pushed above $97 a barrel and Brent topped $109, both up roughly 3% on the day. Vital Knowledge's Adam Crisafulli described the headlines as "a modest negative" but maintained the conflict remains on a path toward de-escalation, a view that has helped equities hold up reasonably well despite the energy shock.
Fed in focus, hold all but priced in
Wednesday's Federal Open Market Committee (FOMC) decision lands at 18:00 GMT, with the press conference at 18:30 GMT. CME FedWatch puts the probability of a hold at the current 3.50% to 3.75% range at roughly 99%, the highest pre-meeting reading on record. Markets have effectively given up on near-term cuts, with Polymarket showing 40% odds of zero cuts across all of 2026 and just 28% pricing one. The story for traders is the language: any softening on the inflation outlook, particularly given the Oil-driven pressures, could revive front-end cut bets. This is also widely expected to be Powell's swan song before Kevin Warsh, Trump's nominee, takes over.
Big tech earnings the real swing factor
Five of the Magnificent Seven report this week, and they will largely determine whether the rally that took the S&P 500 above 7,100 last week extends or stalls. Microsoft (MSFT), Meta (META), Alphabet (GOOGL), and Amazon (AMZN) all release on Wednesday after the close, with Apple (AAPL) on Thursday. JPMorgan upped its year-end S&P 500 target to 7,600 from 7,200 on Friday, citing tech and AI as the structural underpinning. Strategist Fabio Bassi flagged a "follow the winners" stance over buying laggards, given parts of the energy-sensitive market are now structurally impaired by the Oil shock. The bar is high, with capex commentary likely to drive the post-earnings tape as much as the headline numbers.
Verizon, Domino's, Qualcomm headline single-stock action
Verizon (VZ) added roughly 3.5% after raising its 2026 adjusted earnings outlook on the back of stronger Q1 profit and revenue. Qualcomm (QCOM) surged about 10% on reports it is partnering with OpenAI and MediaTek (MDTKF) on a smartphone processor push. On the downside, Domino's Pizza (DPZ) tumbled around 10% after missing first-quarter Wall Street estimates, while Marvell Technology (MRVL) shed more than 5% after its newly acquired Celestial AI lost orders from chip-photonics firm POET Technologies (POET), which itself collapsed nearly 50%.
PCE, GDP, and ISM cap a heavy data slate
Beyond the Fed, Thursday brings the Q1 advance Gross Domestic Product (GDP) print at 12:30 GMT, with consensus looking for 2.2% annualised growth versus the prior 0.5%. The same release window delivers March Personal Consumption Expenditures Price Index (PCE) data, with core PCE expected at 3.2% YoY, up from 3% prior. A hot print could complicate the Fed's already delicate messaging on the inflation path. Friday's Institute for Supply Management (ISM) Manufacturing PMI is expected to nudge up to 53 from 52.7, with the prices paid component watched closely for further evidence of Oil-driven cost pressures bleeding into goods inflation. With Hormuz still effectively closed and earnings risk concentrated in two trading sessions, this week's range on DJIA futures could be wider than the chart's recent consolidation suggests.
Dow Jones 5-minute chart
Futures FAQs
The futures market is an exchange-based auction in which participants buy and sell contracts of an underlying asset at a predetermined future date and price. The set price is agreed upon today and is derived from the underlying asset. Futures contracts can be based on a wide range of assets, with commodities among the most popular, although currencies and indices are other common underlying assets. Futures prices depend on their underlying asset and act as a mechanism for firms, institutions, and large-position traders to manage risks through hedging.
Futures can be traded in different ways. The most common ways are via a regulated exchange or via Contracts For Difference (CFDs). In the former, liquidity is high and pricing is more transparent, with the broker serving only as an intermediary between you and the market. Still, it generally requires more capital. The largest futures exchanges are the Chicago Mercantile Exchange (CME) and the New York Mercantile Exchange (NYME). As for CFDs, these require less capital and thus trading is more flexible, but at the cost of less transparency.
The E-mini S&P 500 index, Crude Oil (Brent, WTI), Natural Gas, Gold, Silver, Copper, and soft commodities such as grains are among the most actively traded contracts. These offer strong liquidity and are closely followed by traders worldwide. Futures market volume consistently exceeds spot market volume, often significantly. This dominance is driven by leverage, hedging, and higher liquidity on exchanges.
Yes. Future gauges, particularly equity index futures such as those of the S&P 500 or the Nasdaq, are widely considered key gauges of market sentiment because they reflect investors’ expectations for the next session’s opening price. When equity futures drop, it is a sign of risk-aversion, signaling bearish market sentiment. On the contrary, rising equity futures suggest markets are risk on.
As a futures contract approaches its maturity date, the futures price converges upon the spot price, becoming almost identical at expiration. However, prices can diverge significantly before the contract ends. A market is in contango when future prices are higher than spot prices, while the mirror image is called backwardation (when current prices are higher than future prices). For commodities, the normal state of the market is contango because holding the asset over time incurs costs such as storage or insurance fees. When markets turn from contango to backwardation – or vice versa – it signals a shift in the trend: a change from contango to backwardation is taken as a bullish sign, while going from backwardation to contango is generally considered bearish.
- Silver trades lower at around $74.90 at the start of the week.
- US-Iran tensions maintain some safe-haven demand, but volatility is limited.
- Markets remain cautious ahead of the Fed meeting and uncertainty around Jerome Powell.
Silver (XAG/USD) declines and is trading around $74.90 on Monday, down 1.06% on the day. The white metal struggles to find a clear direction in an environment marked by investor caution.
Markets remain focused on geopolitical developments in the Middle East, particularly around negotiations between the United States (US) and Iran. According to Axios, Tehran has reportedly proposed a new initiative aimed at ending hostilities and reopening the Strait of Hormuz, a key route for global Oil transport. This prospect supports some optimism, although the lack of concrete progress and the suspension of talks continue to fuel uncertainty.
At the same time, disruptions to traffic in the Strait of Hormuz are keeping Oil prices elevated, increasing stagflation concerns. This environment supports the US Dollar (USD), whose safe-haven appeal is limiting the upside potential of precious metals, including Silver.
Attention is now turning to the Federal Reserve (Fed) meeting later this week. While a pause in interest rates is widely expected, markets will closely watch for signals regarding the future path of monetary policy. The resurgence of inflationary pressures, driven by higher energy prices, has already led investors to scale back expectations for near-term rate cuts.
Additionally, uncertainty surrounding Fed Chair Jerome Powell adds another layer of potential volatility. His term is nearing its end, while political tensions are emerging regarding his succession, a factor that could influence monetary policy expectations and, in turn, the trajectory of the US Dollar.
In this context of combined geopolitical risks and monetary uncertainty, Silver remains stuck in a consolidation phase, as investors refrain from taking strong directional positions pending greater clarity.
Silver FAQs
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.
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.
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.
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.
- Gold dips below $4,700 despite a softer US Dollar as macro headwinds persist.
- The metal struggles despite a softer US Dollar as interest rate expectations dominate ahead of central bank meetings.
- Technically, XAU/USD remains capped below key moving averages, keeping the near-term bias neutral to slightly bearish.
Gold (XAU/USD) trades with a mild downside bias on Monday despite a weaker US Dollar (USD), as macro headwinds stemming from the ongoing US-Iran war keep gains in check. At the time of writing, XAU/USD is trading around $4,669, down about 0.84% on the day after hitting an intraday peak of $4,730.
Market sentiment improved somewhat following a report by Axios, citing a US official and two sources familiar with the matter, which said Iran has presented a new proposal to the United States to reopen the Strait of Hormuz and end the war, while leaving nuclear negotiations for a later stage.
The development follows US President Donald Trump canceling a planned visit to Islamabad by envoys Jared Kushner and Steve Witkoff, saying that the Iranians had “offered a lot, but not enough.”
The Greenback came under pressure following the Axios report, while Washington has yet to respond. Markets remain hopeful that talks could resume as Tehran steps up diplomatic efforts to end the war.
The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, is trading around 98.40, down about 0.13% on the day.
However, Gold is struggling to capitalize on the weaker US Dollar as interest rate expectations continue to dominate price action, with attention now turning to major central bank policy meetings later this week, including the Federal Reserve (Fed), the European Central Bank (ECB), the Bank of England (BoE), and the Bank of Japan (BoJ).
All are widely expected to keep rates unchanged as the recent surge in Oil prices has revived inflation concerns and heightened risks to economic growth. Recent economic data also point to a pickup in inflation across major economies since the onset of the war, largely driven by higher gasoline prices.
Against this backdrop, markets expect central banks to keep borrowing costs higher for longer, which is acting as a key headwind for the non-yielding metal despite its traditional role as an inflation hedge and safe-haven asset.
Traders are now awaiting clearer signals on the rate path from policymakers, particularly from the Fed, as the war poses risks to both sides of its dual mandate — inflation and employment. Any hawkish signal could further weigh on Gold, as higher interest rates increase the opportunity cost of holding the non-yielding asset.
Looking ahead, traders will closely monitor developments in the US-Iran war, particularly any progress toward reopening the Strait of Hormuz. A decision to restore shipping through the key waterway could push Oil prices lower and help ease inflation concerns. Until then, Gold’s upside may remain limited.
However, the downside is likely to stay contained as traders avoid aggressive selling amid persistent geopolitical uncertainty, while the broader uptrend remains intact despite some loss of momentum in technical indicators.
Technical analysis: XAU/USD struggles below key SMAs
In the daily chart, XAU/USD is maintaining a capped tone as spot holds above the 200-day Simple Moving Average (SMA) at $4,257 but remains below the 100-day and the 50-day SMA.
This configuration suggests that while the broader uptrend is still underpinned by long-term support, the near-term rebound is constrained by overhead moving-average resistance, with the Relative Strength Index (RSI) around 43 and a low Average Directional Index (ADX) near 20 hinting at weak, directionless momentum.
On the top side, initial resistance is located at the 100-day SMA near $4,746, with a sustained break exposing the 50-day SMA around $4,863. On the downside, the $4,650-$4,600 area serves as the initial support zone, followed by the 200-day SMA near $4,257, where a clear violation would likely strengthen the bearish bias and open the door to a deeper correction.
(The technical analysis of this story was written with the help of an AI tool.)
Central banks FAQs
Central Banks have a key mandate which is making sure that there is price stability in a country or region. Economies are constantly facing inflation or deflation when prices for certain goods and services are fluctuating. Constant rising prices for the same goods means inflation, constant lowered prices for the same goods means deflation. It is the task of the central bank to keep the demand in line by tweaking its policy rate. For the biggest central banks like the US Federal Reserve (Fed), the European Central Bank (ECB) or the Bank of England (BoE), the mandate is to keep inflation close to 2%.
A central bank has one important tool at its disposal to get inflation higher or lower, and that is by tweaking its benchmark policy rate, commonly known as interest rate. On pre-communicated moments, the central bank will issue a statement with its policy rate and provide additional reasoning on why it is either remaining or changing (cutting or hiking) it. Local banks will adjust their savings and lending rates accordingly, which in turn will make it either harder or easier for people to earn on their savings or for companies to take out loans and make investments in their businesses. When the central bank hikes interest rates substantially, this is called monetary tightening. When it is cutting its benchmark rate, it is called monetary easing.
A central bank is often politically independent. Members of the central bank policy board are passing through a series of panels and hearings before being appointed to a policy board seat. Each member in that board often has a certain conviction on how the central bank should control inflation and the subsequent monetary policy. Members that want a very loose monetary policy, with low rates and cheap lending, to boost the economy substantially while being content to see inflation slightly above 2%, are called ‘doves’. Members that rather want to see higher rates to reward savings and want to keep a lit on inflation at all time are called ‘hawks’ and will not rest until inflation is at or just below 2%.
Normally, there is a chairman or president who leads each meeting, needs to create a consensus between the hawks or doves and has his or her final say when it would come down to a vote split to avoid a 50-50 tie on whether the current policy should be adjusted. The chairman will deliver speeches which often can be followed live, where the current monetary stance and outlook is being communicated. A central bank will try to push forward its monetary policy without triggering violent swings in rates, equities, or its currency. All members of the central bank will channel their stance toward the markets in advance of a policy meeting event. A few days before a policy meeting takes place until the new policy has been communicated, members are forbidden to talk publicly. This is called the blackout period.
- Stalled US-Iran talks and weaker equities keep market sentiment fragile.
- Fed and BoE meetings this week could drive the pair’s direction.
- UK political turmoil may limit Sterling gains despite hawkish rate pricing.
GBP/USD registers modest gains during the North American session on Monday, up by 0.19%, as US-Iran talks stalled, while market mood remains fragile, as reflected in US equity markets trading lower. The pair trades at 1.3548, after bouncing off daily lows of 1.3506.
Sterling firms as Fed, BoE meetings and politics draw focus ahead
The economic schedule on both sides of the Atlantic will be busy. On Tuesday, the Federal Reserve (Fed) begins its two-day monetary policy meeting, in which policymakers are expected to keep interest rates unchanged as they digest the impact of high energy prices sparked by the Middle East conflict. Eyes will also be on Fed Chair Jerome Powell’s decision to stay at the US central bank or to resign once Kevin Warsh is approved to succeed him.
Meanwhile, a day later on Thursday, the Bank of England (BoE) is also projected to hold rates, but a split vote could trigger a jump in GBP/USD if some members vote to raise rates. The vote split is projected at 8-1, with the outlier expected to vote for a rate hike. Worth noting that money markets had priced in 56 basis points of increases, according to Prime Terminal data.
BoE implied forward rates
Even though expectations are that GBP/USD could continue to rise, political turmoil in the UK may weigh on sterling. Prime Minister Keir Starmer is facing scrutiny for appointing Labor veteran Peter Mandelson as ambassador to the US. Mandelson’s ties to Jeffrey Epstein’s files increased pressure on Starmer, who faces opposition from members of his own party to resign.
Eyes turn to a scarce economic docket on Tuesday, with no data expected in the UK. In the US, traders’ eyes are on the ADP Employment Change 4-week average, housing data, and the Conference Board (CB) Consumer Confidence survey for April.
GBP/USD Price Forecast: Technical outlook
In the daily chart, GBP/USD trades at 1.3550. The pair retains a bullish near-term bias as spot holds decisively above a dense cluster of the 50-, 100- and 200-day Simple Moving Averages (SMAs) grouped around 1.3410, while also respecting an underlying rising trend-line now coming in near 1.3490. The latest reading of the FXS Fed Sentiment Index at 129.62 continues to grind higher, which hints that broader USD tone is softening and reinforces the upside skew in sterling as long as price remains above these reclaimed structural floors.
On the downside, initial support is located at the rising trend-line support zone around 1.3490, ahead of the former descending resistance line, now acting as secondary support near 1.3435. A break beneath that area would expose the confluence of the 50-, 100- and 200-day SMAs clustered close to 1.3410, where buyers would be expected to defend the broader uptrend. With no clearly defined resistance levels above the market in the provided dataset, the topside stays open, and any fresh swing high would likely attract follow-through buying while the pair holds above the 1.3490–1.3410 support band.
(The technical analysis of this story was written with the help of an AI tool.)
Pound Sterling Price This week
The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.30% | -0.29% | -0.14% | -0.48% | -0.83% | -0.86% | -0.31% | |
| EUR | 0.30% | 0.04% | 0.09% | -0.16% | -0.51% | -0.53% | 0.02% | |
| GBP | 0.29% | -0.04% | 0.11% | -0.17% | -0.54% | -0.57% | -0.02% | |
| JPY | 0.14% | -0.09% | -0.11% | -0.28% | -0.65% | -0.60% | -0.07% | |
| CAD | 0.48% | 0.16% | 0.17% | 0.28% | -0.31% | -0.32% | 0.16% | |
| AUD | 0.83% | 0.51% | 0.54% | 0.65% | 0.31% | -0.03% | 0.52% | |
| NZD | 0.86% | 0.53% | 0.57% | 0.60% | 0.32% | 0.03% | 0.55% | |
| CHF | 0.31% | -0.02% | 0.02% | 0.07% | -0.16% | -0.52% | -0.55% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the 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).
- EUR/GBP edges lower on Monday after brief volatility triggered by political jitters in the United Kingdom.
- UK PM Keir Starmer faces a parliamentary vote over a probe into Peter Mandelson's appointment.
- Focus shifts to ECB and BoE meetings, with rates seen on hold and attention on forward guidance.
EUR/GBP edges lower on Monday after brief volatility triggered by political jitters in the United Kingdom (UK). At the time of writing, the cross is trading around 0.8658, easing from an intraday high of 0.8676.
The British Pound (GBP) came under modest pressure before trimming losses following reports that UK Prime Minister Keir Starmer will face a parliamentary vote on a possible probe into whether he misled lawmakers over the appointment of Peter Mandelson as ambassador to the United States. The House of Commons is set to vote on Tuesday on whether to refer Starmer to the privileges committee.
EUR/GBP maintains a mild downside bias since the start of the month as traders reassess the monetary policy outlook amid rising inflation risks driven by higher Oil prices linked to the US-Iran war. While markets are increasingly pricing in the possibility of interest rate hikes from both the European Central Bank (ECB) and the Bank of England (BoE), recent UK economic data has tilted expectations more hawkishly toward the BoE.
As noted by MUFG’s Lee Hardman, "The pound has been supported by the hawkish repricing of BoE rate hike expectations encouraged by further evidence of stronger UK growth momentum at the start of this year while underlying inflation pressures remained uncomfortably high at the start of the energy price shock."
Attention now turns to upcoming monetary policy meetings due on Thursday. The BoE is widely expected to keep its policy rate at 3.75% for a third consecutive meeting, while the ECB is also expected to hold rates steady at 2.00% for a seventh straight meeting.
With the outcome largely priced in, the focus will shift to forward guidance as traders look for clearer signals on the interest rate path and whether recent hawkish expectations are justified.
According to a BHH report, the swaps curve suggests around 60 basis points of rate hikes from the ECB over the next 12 months. In comparison, the swaps curve points to roughly 75 basis points of tightening from the BoE over the same period.
BoE FAQs
The Bank of England (BoE) decides monetary policy for the United Kingdom. Its primary goal is to achieve ‘price stability’, or a steady inflation rate of 2%. Its tool for achieving this is via the adjustment of base lending rates. The BoE sets the rate at which it lends to commercial banks and banks lend to each other, determining the level of interest rates in the economy overall. This also impacts the value of the Pound Sterling (GBP).
When inflation is above the Bank of England’s target it responds by raising interest rates, making it more expensive for people and businesses to access credit. This is positive for the Pound Sterling because higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls below target, it is a sign economic growth is slowing, and the BoE will consider lowering interest rates to cheapen credit in the hope businesses will borrow to invest in growth-generating projects – a negative for the Pound Sterling.
In extreme situations, the Bank of England can enact a policy called Quantitative Easing (QE). QE is the process by which the BoE substantially increases the flow of credit in a stuck financial system. QE is a last resort policy when lowering interest rates will not achieve the necessary result. The process of QE involves the BoE printing money to buy assets – usually government or AAA-rated corporate bonds – from banks and other financial institutions. QE usually results in a weaker Pound Sterling.
Quantitative tightening (QT) is the reverse of QE, enacted when the economy is strengthening and inflation starts rising. Whilst in QE the Bank of England (BoE) purchases government and corporate bonds from financial institutions to encourage them to lend; in QT, the BoE stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive for the Pound Sterling.
In a post on published on his Telegram account, Iran's Foreign Minister Abbas Araghchi said that United States (US) President Donald Trump is requesting negotiations because the US has not achieved any of its objectives.
Araghchi further noted that they are looking into the US' request.
Market reaction
Markets cling to a cautious stance in the American session. At the time of press, the Dow Jones Industrial Average was down 0.35% on the day, while the Nasdaq Composite was losing 0.4%.
MUFG’s FX team highlights that Bank of Japan (BoJ) rate-hike expectations for April have collapsed, even as Japanese inflation data surprise to the upside. They warn that a dovish BoJ versus a more hawkish Federal Reserve (Fed) could push USD/JPY through 160, increasing intervention risk, while authorities try to curb speculative Yen (JPY) selling and signal a likely June rate hike.
BoJ hawkish hold versus weak Yen
"Ahead of the FOMC meeting, the BoJ will meet tomorrow with expectations of a rate hike having come down notably. At the beginning of April about 18bps of tightening was priced but that is now close to zero. The BoJ have drip-fed information to the market suggesting caution was warranted at the April meeting due to the conflict in the Middle East."
"But Governor Ueda will have to thread a fine line between emphasising the current uncertainty as reason for caution and signalling that the BoJ will act to limit upside inflation risks. The monetary stance remains loose and rising inflation will only reinforce the still deeply negative policy rate in real terms. Nationwide CPI data on Friday for March revealed upside surprises for the headline and core rates."
"The BoJ therefore needs to limit this risk and convey a more hawkish message on the outlook for policy. The BoJ tomorrow will also publish updated forecasts, and it is likely we will see inflation projections above the 2.0% target given in January the FY26 projection was 1.9% for core nationwide CPI and 2.0% in FY27. We expect the BoJ to provide a message that signals a likelihood of a hike at the next meeting and we currently assume a 25bp hike to 1.00% in June."
"The threat of intervention was once again communicated last week by FM Katayama and this messaging and the fact that the Fed checked rates in USD/JPY in January have helped limit appetite for yen selling above the 160-level."
"The BoJ’s communication tomorrow will be key for avoiding a bigger move higher in USD/JPY."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Rabobank strategists Molly Schwartz and Christian Lawrence expect the Bank of Canada (BoC) to keep its overnight policy rate at 2.25% through year-end, with no change anticipated at the April 29 meeting. They note significant turnover on the Governing Council, evolving household and business sentiment, and an energy-driven inflation surge, but still anticipates a steady policy stance.
Policy rate seen steady despite shocks
"We continue to expect the Bank of Canada to hold the overnight policy rate at 2.25% through year‑end, implying no change at the April 29 meeting, even as notable turnover reshapes the Governing Council with two new deputy governors appointed and an external deputy role now open."
"Inflation had been stabilizing near target until a sharp, energy‑driven surge revived upside risks, while economic growth remains volatile and productivity weak; despite this, we expect the Bank to look through externally driven inflation shocks and keep rates on hold given persistent economic softness."
"Ahead of the conflict, household sentiment showed tentative improvement, with spending plans still muted but less negative as trade tensions eased; however, consumers continued to perceive a soft labor market and elevated job insecurity, particularly in sectors exposed to AI-related disruption."
"Prior to the war, near‑term inflation expectations remained elevated, driven by food prices, while longer‑term expectations edged lower, but post‑war survey results indicate households now expect weaker growth and higher prices, prompting some to delay travel and major purchases."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Scotiabank strategists Shaun Osborne and Eric Theoret observe the Canadian Dollar (CAD) strengthening decisively versus the Dollar, extending its typical April outperformance even as risk sentiment remains uncertain. While USD/CAD still trades above their fair value estimate, they stress that the prior overvaluation is easing and short‑term technicals point to further downside, with scope to retest early‑March lows around the 1.3520/25 area.
Loonie extends seasonal April strength
"The CAD has strengthened quite decisively over the weekend, rising against the USD with its core commodity peers despite a somewhat uncertain risk backdrop."
"CAD gains leave spot trading at its lowest since mid-March and extending the strong seasonal run in the CAD that typically emerges in April."
"Spot remains above our fair value estimate (1.3531 today) but the USD’s egregious overvaluation seen through late March and early April is easing."
"Bearish—USDCAD’s sustained run lower paused last week but that minor consolidation (in effect, a bear flag pattern) has given way to renewed USD losses and a clear push under noted support at 1.3625."
"Short-term patterns suggest the USD decline is likely to extend towards the 1.3520/25 area to retest the early March low at least."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Forex Market News
Our dedicated focus on forex news and insights empowers you to capitalise on investment opportunities in the dynamic FX market. The forex landscape is ever-evolving, characterised by continuous exchange rate fluctuations shaped by vast influential factors. From economic data releases to geopolitical developments, these events can sway market sentiment and drive substantial movements in currency valuations.
At Rakuten Securities Hong Kong, we prioritise delivering timely and accurate forex news updates sourced from reputable platforms like FXStreet. This ensures you stay informed about crucial market developments, enabling informed decision-making and proactive strategy adjustments. Whether you’re monitoring forex forecasts, analysing trading perspectives, or seeking to capitalise on emerging trends, our comprehensive approach equips you with the insights needed to navigate the FX market effectively.
Stay ahead with our comprehensive forex news coverage, designed to keep you informed and prepared to seize profitable opportunities in the dynamic world of forex trading.
