Forex News
Commerzbank's FX Research report by Tatha Ghose discusses the outlook for the Ruble amidst ongoing geopolitical tensions and sanctions. The report highlights a potential positive scenario if a peace deal between Russia and Ukraine is reached, which could lead to the lifting of some sanctions. However, the overall economic outlook remains challenging, with signs of stress and a weaker currency forecasted in the absence of significant geopolitical changes.
Outlook for the Ruble
"All said, one positive scenario is emerging, even if not for the right reasons. The US administration has been trying to negotiate a peace deal between Russia and Ukraine. The negotiations are reportedly stuck at a complex juncture involving territorial surrender."
"It is not our base-case that a solution can be found around this quagmire soon. Nevertheless, if a solution were to somehow be found, we may assume that some major sanctions on Russia would be lifted."
"In conclusion, a positive scenario regarding sanctions and frozen assets may now be priced-in with some probability. A peace treaty is not our base-case for the near-term. But in the event that a solution is found, the rouble would appreciate considerably from current levels."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Bank of Canada (BoC) Governor Tiff Macklem said that he welcomes the nomination of Kevin Warsh as Fed chair. In a speech at the Empire Club in Toronto on Thursday.
He addedthat he knows Warsh has deep knowledge of financial markets and the international monetary system, and is looking forward to working with him.
Key takeaways:
I welcome the nomination of Kevin Warsh. I've known Kevin for a long time.
Warsh has deep knowledge of financial markets and the international monetary system.
Looking forward to working with Warsh.
A less predictable Fed would have an impact on US rates.
In that case, you would expect to see some impact on the 5-year US Treasury interest rate.
If US Fed policy becomes less predictable, that's going to impact us all.”
Bank of Canada FAQs
The Bank of Canada (BoC), based in Ottawa, is the institution that sets interest rates and manages monetary policy for Canada. It does so at eight scheduled meetings a year and ad hoc emergency meetings that are held as required. The BoC primary mandate is to maintain price stability, which means keeping inflation at between 1-3%. Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Canadian Dollar (CAD) and vice versa. Other tools used include quantitative easing and tightening.
In extreme situations, the Bank of Canada can enact a policy tool called Quantitative Easing. QE is the process by which the BoC prints Canadian Dollars for the purpose of buying assets – usually government or corporate bonds – from financial institutions. QE usually results in a weaker CAD. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The Bank of Canada used the measure during the Great Financial Crisis of 2009-11 when credit froze after banks lost faith in each other’s ability to repay debts.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the Bank of Canada purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the BoC stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Canadian Dollar.
- Spot Silver prices found fresh room on the downside on Thursday.
- A general rotation out of risk is pelting overextended Silver markets.
- A 13% decline on Thursday adds to a 40% top-to-bottom decline in XAG/USD.
Spot Silver markets took a fresh beating on Thursday, with XAG/USD tumbling 13% in a single day. Intraday Silver bids have been pushed back onto the bottom end of a 40% peak-to-trough decline that dragged Silver prices sharply down from record highs posted at $121.66 just last week.
Risk-off market sentiment hammers metals
Silver prices are following a broad-market trend into the red on Thursday as global investor sentiment rotates into a firm risk-off stance. Silver tanked 13%, pushing XAG/USD back below $76.00 after a brief, half-hearted rebound earlier in the week from fresh lows in the $72.50 region.
XAG/USD daily chart
Silver price forecast
In the daily chart, XAG/USD trades at $75.90. The 50-day EMA has flattened and now caps price, with dynamic resistance at $79.81. The 200-day EMA continues to rise and underpins the broader trend with primary support at $55.75. The Stochastic (14,5,5) slides to 21.20, nearing oversold and indicating fading downside momentum.
A recovery through the 50-day EMA at $79.81 would reassert the bullish bias and open scope for trend continuation. Failure to reclaim that barrier would keep pressure in place, while the rising 200-day EMA at $55.75 would be expected to absorb deeper pullbacks. A turn higher in the Stochastic from its depressed reading would strengthen the case for a rebound; a further drop into oversold could extend consolidation before traction emerges.
(The technical analysis of this story was written with the help of an AI tool.)
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.
OCBC Bank's report highlights the softer footing of the Thai Baht (THB) due to election-related uncertainty and a firmer USD. Thailand's upcoming election on February 8 could significantly influence the THB through sentiment and policy channels. The report notes that a clear election outcome could support the THB, while a fragile coalition may hinder economic policy implementation.
Election impacts THB sentiment
"Interim weakness playing out. USDTHB continued to inch higher, tracking the USD rebound and weaker gold sentiment while also inching closer to election day (8 Feb)."
"We had earlier indicated that softer growth momentum and election-related uncertainty add to two-way risks, with near-term USDTHB bias tilting modestly higher."
"A clear outcome allowing for the formation of majority government is the most positive as economic policies can potentially be implemented smoothly. This should also be supportive of THB, and we reckon some of the weakness can dissipate and that THB should revert to taking cues from broader macro drivers including risk sentiments, USD trend."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Here is what you need to know on Friday, February 6:
Financial markets revolved around European central banks’ monetary policy decisions.
First, the Bank of England (BoE) delivered a dovish hold, spurring near-term weakness to the British Pound (GBP) as the Monetary Policy Committee voted 5–4 to maintain the Bank Rate at 3.75%, with Governor Andrew Bailey saying "there should be scope for some further easing of policy" later this year.. The European Central Bank (ECB) also maintained the deposit facility rate unchanged at 2% and reiterated that monetary policy is in a “good place.”
The US Dollar Index (DXY) is trading near the 97.80 price zone, surging from its intraday lows even after the number of United States (US) citizens submitting new applications for unemployment insurance rose to 231K for the week ending January 31. The latest report showed a higher figure than initial estimates (212K) and exceeded the previous week's unrevised count of 209K. JOLTS Job Openings were also disappointing, down in December to 6.542 million from 6.928 million in November.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.05% | 0.77% | -0.02% | 0.09% | 0.48% | 0.38% | 0.00% | |
| EUR | -0.05% | 0.72% | -0.06% | 0.04% | 0.43% | 0.33% | -0.04% | |
| GBP | -0.77% | -0.72% | -0.77% | -0.67% | -0.29% | -0.38% | -0.75% | |
| JPY | 0.02% | 0.06% | 0.77% | 0.11% | 0.50% | 0.38% | 0.03% | |
| CAD | -0.09% | -0.04% | 0.67% | -0.11% | 0.39% | 0.29% | -0.08% | |
| AUD | -0.48% | -0.43% | 0.29% | -0.50% | -0.39% | -0.09% | -0.47% | |
| NZD | -0.38% | -0.33% | 0.38% | -0.38% | -0.29% | 0.09% | -0.37% | |
| CHF | -0.01% | 0.04% | 0.75% | -0.03% | 0.08% | 0.47% | 0.37% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
EUR/USD is trading near the 1.1800 level, seeing little movement after the ECB delivered the expected interest rate hold.
GBP/USD is trading near the 1.3550 price zone, having a rough slip after the BoE delivered a dovish hold.
AUD/USD is trading near 0.6970, with little downward movement during the American session despite USD strength.
USD/CAD is trading near 1.3670 at a neutral level in the late American session. The pair awaits the Canadian Employment data and the US Michigan Consumer Sentiment Index on Friday.
USD/JPY is trading near the 156.80 price zone, unchanged on a daily basis after downbeat US employment data.
Gold slipped and is now trading near the $4,870 level after failing to hold the $5,000 mark.
What’s next in the docket:
Friday, February 6:
- Canada January Net Change in Employment.
- US Preliminary February Michigan Consumer Sentiment Index.
Sunday, February 8:
- Japanese General Elections.
MUFG's report highlights that China's January PMIs have shown disappointing results, with the Manufacturing PMI falling to 49.3 and the Non-Manufacturing PMI dropping to 49.4. The report suggests that these declines may prompt further policy easing, including potential cuts to the policy rate and reserve requirement ratio if domestic growth does not improve. The analysis indicates that the construction sector is particularly weak, with a significant drop in the construction PMI.
PMI declines may lead to policy changes
"January official PMIs were a disappointment. Manufacturing PMI reading unexpectedly fell below the 50 level to 49.3, after briefly returning to expansion territory in December."
"The bright spot however lies on manufacturing PMI price-related sub-indices, with input price (i.e., main raw material purchasing price index) rising further to 56.1 and output price posted an expansionary reading for the first time since June 2024 at 50.6."
"Further easing likely on the way. In upcoming March NPC, we expect the budgeted fiscal deficit-to-GDP ratio to nudge higher to 4.5% and that the 'broad' fiscal deficit ratio to increase from 8.4% previously to 9.0%."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Gold slides to $4,880 as broad US Dollar strength and profit-taking weigh on precious metals.
- Weak US labor data clashes with Bostic’s hawkish tone, limiting the Dollar's downside.
- Policy divergence persists as the ECB holds rates while the BoE signals easing ahead.
Gold price (XAU/USD) tumbles during the North American session on Thursday as precious metals continue their liquidation mode, while the Greenback recovers some ground amid worse-than-expected economic data in the US. Two major central banks held rates unchanged, yet the Bank of England (BoE) signals that further easing is coming. At the time of writing, XAU/USD trades at $4,880, down 1.75%.
XAU/USD extends losses despite weak US labor data as profit-taking and central bank signals favor the Greenback
Broad US Dollar strength and traders booking profits sent the precious metals diving for the second consecutive day day. The European Central Bank (ECB) and the BoE maintained the status quo, with the former set to remain on hold, while the latter is poised to reduce rates twice in 2026.
Data in the United States (US) revealed weakness in the labor market. The Job Openings and Labor Turnover Survey (JOLTS) report for December revealed a low hiring environment. Jobless Claims for the previous week exceeded estimates, while the Challenger Job Cuts for January rose sharply, indicating companies are reducing their workforce.
Given the backdrop, Bullion prices should be higher, but the Greenback remains strong for the second straight day.
Recently, Atlanta Federal Reserve (Fed) President Raphael Bostic said that inflation is too high for too long, and that the Fed is going to do its job well, as it has to think about issues over the long run.
Aside from this, the US Treasury Secretary Scott Bessent said that whether to sue Kevin Warsh over Fed rates policy is up to US President Trump, and added that he does not favor 0% tariffs on Canada, following their deal with China.
Daily market movers: US Dollar advances amid soft US jobs data
- The US Challenger, Gray & Christmas report showed that companies announced 108.435K layoffs in January, marking a 118% increase from a year earlier, while hiring intentions fell by 13%.
- Initial Jobless Claims released by the Department of Labor rose sharply to 231K in the week ending January 31, missing expectations of 212K.
- The Job Openings and Labor Turnover Survey (JOLTS) for December underscored growing caution among employers, with job openings dropping to 6.542 million from 6.928 million in November, well below forecasts of 7.2 million.
- Despite this, the US Dollar Index (DXY), which measures the buck’s performance against six currencies, is up 0.11% at 97.75, a headwind for Gold and Silver prices.
- Contrarily, US Treasury bond yields are plunging. The US 10-year Treasury note yield is dropping six basis points to 4.183% as investors grow confident that the Federal Reserve will ease at least twice in 2025.
- Money markets ramped up expectations from 50 to 56 basis points of Fed easing towards the year-end, according to Prime Market Terminal data.
- Easing geopolitical tensions weighed on Gold prices. Russia and Ukraine agreed to a major prisoner swap after sustaining talks between both countries and the US. On Wednesday, US President Donald Trump revealed that he had a good call with the Chinese President Xi Jinping.
- Eyes are also on the resumption of US-Iran talks in Oman, on Friday.
Technical outlook: Gold retreats towards $4,800 as buyers take a breather
Gold’s uptrend continues on the daily chart, but recent volatility calls for caution in the short term. Bulls seem to have lost momentum as depicted by the Relative Strength Index (RSI), which exited from extreme overbought territory, plummeting below its neutral level. However, during the last four days, it turned bullish.
For a bullish continuation, buyers must reclaim $4,900. A breach of the latter will expose the $4,950, followed by $5,000. Conversely, if Gold closes on a daily basis below the 20-day Simple Moving Average (SMA) of $4,842, it could exacerbate a drop towards $4,800. Once cleared, the next stop is $4,666, the February 3 daily low.
Gold FAQs
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.
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.
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.
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.
Commerzbank's Economic Research report highlights a significant rise in German industrial orders, which increased by 7.8% in December, marking the second consecutive month of growth. The report notes that while this growth is largely due to big ticket orders, the core figure excluding these orders also rose by 0.9%. This trend suggests a potential end to the downturn in the industrial sector, with expectations of stronger growth in the economy.
Positive trends in German industrial orders
"German industrial orders rose significantly in December for the second month in a row, up 7.8% compared to November. As in November, this growth is largely attributable to big ticket orders, meaning that this increase in orders is likely to exaggerate the underlying trend."
"Even if the strong increase must therefore be put into perspective, today's figures are a positive surprise. Even without the large orders, order intake rose by 0.9%."
"This increases the chances that industry will no longer slow down the economy this year, but will even contribute to the generally expected slightly stronger growth."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- The Canadian Dollar weakened slightly against the US Dollar on Thursday.
- Global markets are seeing a push into the safe-haven Greenback.
- US labor metrics continue to sour, Key Canadian jobs data due on Friday.
The Canadian Dollar (CAD) shed some scant weight against the US Dollar (USD) on Thursday, backsliding a slim 0.05%. Despite the thin momentum, Thursday’s soft downside added to the Loonie’s 1.5% decline against the Greenback from last week’s 15-month highs that had the USD/CAD pair down to 1.3480 for the first time since October of 2024.
Daily digest market movers: Canadian Dollar backslides on Greenback leg-up
- The Canadian Dollar remains weak-footed against the US Dollar, down 0.4% in early February and pushing the USD/CAD pair back up into the 1.3700 region.
- US employment figures on Thursday were broadly negative, sparking a sour tone in global investor sentiment.
- Loonie markets will likely remain tepid until key Canadian labor market figures publish on Friday.
- Datawatchers await the latest Nonfarm Payrolls (NFP) data from the US, which has been pushed out to next Wednesday following the latest brief federal funding freeze.
USD/CAD daily chart
Technical Analysis
In the daily chart, USD/CAD trades at 1.3671. The pair sits beneath the 50- and 200-day EMAs, both sloping lower to reinforce a bearish bias. The 50-day EMA at 1.3779 caps near-term recoveries, while the 200-day EMA at 1.3862 marks a broader ceiling. Stochastic (14,5,5) has rebounded to 38.48, indicating momentum is stabilizing but remains below neutral. Bias stays heavy while price holds under the 50-day average.
EMA alignment keeps rallies corrective, and bears would retain control unless a daily close above the 50-day EMA materializes. A break higher could target the 200-day EMA, while failure to reclaim the 50-day gauge would maintain pressure on the prevailing downtrend. The oscillator’s upturn would need follow-through above the midline to confirm a stronger rebound; otherwise, sellers would be expected to fade bounces.
(The technical analysis of this story was written with the help of an AI tool.)
Canadian Dollar FAQs
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.
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.
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.
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.
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.
Forex Market News
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