Forex News
- USD/CAD rises for a sixth consecutive day, supported by renewed safe-haven demand.
- Tensions linked to the war between the United States and Iran strengthen the US Dollar.
- The Canadian Dollar remains pressured by steady Oil prices and monetary policy expectations.
USD/CAD trades around 1.3910 on Monday at the time of writing, up 0.12% on the day and extending its winning streak to six consecutive days. The pair is supported by a stronger US Dollar (USD) amid rising geopolitical tensions in the Middle East.
Demand for the Greenback increases as investors seek safe-haven assets due to uncertainty surrounding the war between the United States (US) and Iran. In an interview with the Financial Times, US President Donald Trump said that Washington could “take the Oil in Iran”, including potentially seizing Kharg Island, the country’s main export hub. At the same time, he indicated that indirect talks with Tehran were progressing and that an agreement could be reached relatively quickly.
Regional tensions also intensified after Iran-backed Houthi rebels in Yemen launched their first strikes against Israel over the weekend. This escalation broadens the conflict and raises concerns about potential disruptions to key shipping routes, particularly in the Red Sea, as well as to Saudi energy infrastructure, increasing risks to global energy supply.
Meanwhile, the Canadian Dollar (CAD) remains under pressure, weighed down by relatively stable Oil prices. West Texas Intermediate (WTI) US Oil edges lower and trades around $98.80 per barrel at the time of writing, limiting the support typically provided to the CAD by the energy sector, as Canada is the largest Crude Oil exporter to the United States.
HSBC analysts argue that the recent strength of the Canadian Dollar may moderate in the coming weeks despite elevated energy prices. According to the bank, relative monetary policy dynamics could become a more decisive driver for the Loonie. HSBC economists expect the Bank of Canada (BoC) to keep interest rates on hold through 2026 and 2027, while acknowledging that hawkish risks could emerge if energy disruptions significantly lift inflation expectations.
Investors are also watching remarks from Federal Reserve (Fed) Chair Jerome Powell later on Monday. Key US labor market indicators scheduled for release this week, particularly the Nonfarm Payrolls (NFP) report and the Institute for Supply Management (ISM) Purchasing Managers Index (PMI), could influence the monetary policy expectations and the trajectory of the US Dollar.
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 New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.17% | 0.22% | -0.48% | 0.16% | 0.26% | 0.49% | 0.06% | |
| EUR | -0.17% | 0.03% | -0.62% | -0.01% | 0.14% | 0.32% | -0.11% | |
| GBP | -0.22% | -0.03% | -0.72% | -0.04% | 0.08% | 0.28% | -0.15% | |
| JPY | 0.48% | 0.62% | 0.72% | 0.64% | 0.75% | 0.95% | 0.52% | |
| CAD | -0.16% | 0.00% | 0.04% | -0.64% | 0.11% | 0.26% | -0.12% | |
| AUD | -0.26% | -0.14% | -0.08% | -0.75% | -0.11% | 0.20% | -0.21% | |
| NZD | -0.49% | -0.32% | -0.28% | -0.95% | -0.26% | -0.20% | -0.44% | |
| CHF | -0.06% | 0.11% | 0.15% | -0.52% | 0.12% | 0.21% | 0.44% |
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).
MUFG’s Senior Currency Analyst Lee Hardman notes that the Japanese Yen has rebounded, pulling USD/JPY back below 160.00 after verbal warnings from Japan’s currency authorities. Comments from officials and hawkish Bank of Japan minutes suggest policymakers are increasingly focused on inflation from higher energy prices and Yen weakness, keeping expectations alive for another BoJ rate hike and potential FX or Oil market intervention to support the Yen.
Yen support from policy and intervention talk
"The yen has strengthened overnight resulting in USD/JPY dropping back below the 160.00-level after hitting a high of 160.46."
"The main trigger for the yen rebound was comments from Japan’s currency chief Atsushi Mimura who warned that bold action may be needed if the situation continues when referring to yen weakness."
"He finished by indicating that they are prepared to respond on all fronts, and our focus is broad and comprehensive."
"At the current juncture, the BoJ appears to be placing more weight on the inflationary impact from higher energy prices and the weaker yen than the negative impact on growth keeping it on course to hike rates again as soon as next month."
"Overall, the developments highlight that Japanese policymakers appear increasingly prepared to intervene and/or tighten monetary policy to help support the yen."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Gold edges higher beyond $4,500 with technical indicators turning bullish.
- The US Dollar Index remains firm but is nearing a key resistance area.
- Above the Fibonacci retracement at $4,610, bulls might target the key $5,000 area.
Gold (XAU/USD) reversal from early March highs at $5,420 seems to have found support at $4,100 last week, and the pair has been showing a moderate positive tone over the last few days.
The US Dollar Index maintains a strong trend, favoured by higher US Treasury yields amid rising hopes that the US Federal Reserve (Fed) will be forced to change course and hike interest rates at least once this year. The DXY, however, is nearing a key resistance area at 100.50. If bulls fail again at that level, we might see a deeper correction in Gold.
Technical Analysis
The 4-hour chart shows XAU/USD trading at $4,532. The near-term bias is mildly bullish as price rebounds from last week’s lows, with technical indicators coming up from heavily oversold levels, and the higher low suggesting that the bearish trend has lost steam.
The Relative Strength Index (RSI) has climbed to 53.58, edging above the 50 midline and suggesting improving upside momentum. The Moving Average Convergence Divergence (MACD) line stands above the Signal line in positive territory with a modestly positive histogram, which reinforces a moderate bullish momentum.
Price action suggests that we are in a C-D leg of a Gartley pattern, with immediate resistance at the 38.2% Fobonacci retracement of the March sell-off, around $4,610. A confirmation above here would expose the March 20 low at the $4,750 area, although the most plausible target for a bullish correction is the $5,040 area, a previous support-turned-resistance on March 16 and 17.
On the downside, initial support is at Friday's low of $4,315 ahead of the mentioned March 23 low at the $4,100 area.
(The technical analysis of this story was written with the help of an AI tool.)
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.
- Iran’s Foreign Ministry spokesperson warns against linking the Ukraine war to Iran-US-Israel tensions.
- Tehran confirms that its ambassador to Lebanon will continue his duties in Beirut.
- Iran calls on the United Arab Emirates to treat Iranian citizens with “foresight”.
Iran’s Foreign Ministry spokesperson Esmail Baghaei delivered several statements on Monday reported by Reuters, warning against what he described as a “catastrophic miscalculation” in attempts to link the war in Ukraine to the conflict involving Iran, the United States and Israel.
Baghaei stated that any attempt to link these separate crises would represent a significant strategic error that could further escalate international tensions. His remarks come as geopolitical risks remain elevated across multiple fronts, particularly in the Middle East and Eastern Europe.
Baghaei also stated that Iran’s ambassador to Lebanon will continue his work in Beirut. The clarification comes amid heightened political and security uncertainty in Lebanon, where regional dynamics, including Iran’s ties with allied groups, remain closely monitored by both governments and financial markets.
In addition, the Iranian spokesperson said that Tehran expects the United Arab Emirates (UAE) to treat Iranian citizens with “foresight”. He added that Iran will protect the rights of its citizens wherever they are, in what appears to be a message aimed at preventing potential diplomatic friction between the two Gulf countries.
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 New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.15% | 0.22% | -0.43% | 0.12% | 0.24% | 0.49% | 0.05% | |
| EUR | -0.15% | 0.07% | -0.55% | -0.03% | 0.13% | 0.34% | -0.11% | |
| GBP | -0.22% | -0.07% | -0.68% | -0.09% | 0.05% | 0.28% | -0.17% | |
| JPY | 0.43% | 0.55% | 0.68% | 0.56% | 0.69% | 0.91% | 0.47% | |
| CAD | -0.12% | 0.03% | 0.09% | -0.56% | 0.12% | 0.31% | -0.09% | |
| AUD | -0.24% | -0.13% | -0.05% | -0.69% | -0.12% | 0.23% | -0.20% | |
| NZD | -0.49% | -0.34% | -0.28% | -0.91% | -0.31% | -0.23% | -0.45% | |
| CHF | -0.05% | 0.11% | 0.17% | -0.47% | 0.09% | 0.20% | 0.45% |
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).
- USD/JPY eases from highs above 160.00 with BoJ intervention looming.
- UD Dollar downside attempts remain limited on concerns about a protracted war in Iran.
- Fed Powell and Tokyo Inflation data are likely to provide some distraction later on Monday.
The US Dollar (USD) has snapped a four-day rally against the Japanese Yen on Monday, and retreated from 20-month highs above 160.00 reached during the early Asian trading session, a level considered a line in the sand for Japanese authorities.
Japan’s Top Currency Diplomat, Atsushi Mimura, observed earlier on Monday about rising speculative activity in currency markets and affirmed that Tokyo needs to take “decisive steps” if these trends continue. Mimura also stated that further falls in the currency could justify a near-term interest rate hike, providing additional support to the JPY.
US Dollar’s downside attempts, however, remain contained so far, as market concerns about a protracted war in the Middle East keep pushing investors towards the safe-haven US Dollar.
Kharg Island invasion remains an option, says Trump
US President Donald Trump continues sending contradictory messages about Iran. In an interview at the Financial Times, Trump affirmed that the option of seizing Iran’s Kharg Island remains on the table, a short while after reiterating that there are direct and indirect talks with Iran, and that the country’s new authorities are “very reasonable”.
Meanwhile, the conflict widens. The irruption of the Iran-backed Houthi militias on the scene adds a new actor in an already complex war, which threatens to close the Strait of Bab el Mandeb, another chokepoint for Saudi Oil supply, which would boost Crude prices even higher.
In the economic docket, the Federal Reserve Chairman, Jerome Powell, will speak at a panel at Harvard University later on Monday and might provide further clues about the bank’s stance amid growing risks of stagflation. In Japan, the advanced Tokyo Consumer Prices Index (CPI) figures, Industrial Production and Retail Trade figures, due on the early Asian session, are likely to provide some fundamental background for the pair.
Bank of Japan FAQs
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
TD Securities strategists Julie Ioffe and James Rossiter argue that the ECB faces a more benign backdrop in 2026 than in 2022. Energy prices are higher but well below prior peaks, domestic growth and labour markets are more resilient, and inflation has been near target, allowing the Governing Council greater policy flexibility.
ECB compares 2026 backdrop with 2022
"President Lagarde and other Governing Council members have sought to distinguish today’s energy price increases from the 2022 shock. We agree—up to a point. Oil and gas prices are higher but remain far below 2022 peaks, EU gas dependence has fallen, and new regulations cushion consumers from short-term volatility."
"Duration also matters: the earlier shock was much larger and more persistent. That said, the Middle East conflict remains open-ended, and infrastructure damage raises the risk of a longer-lasting supply shock."
"Domestically, the starting point is more robust. Growth proved resilient through 2025, lacking the post-pandemic demand surges & supply bottlenecks of 2022. Labour markets are still tight, but easing vacancies point to weaker bargaining power."
"High household savings provide a buffer, and inflation near target since mid-2025 has cooled wage growth, giving the Governing Council time to monitor external risks."
"The key difference versus 2022 is policy flexibility. Then, sequencing constraints delayed tightening until inflation was entrenched. In 2026, anchored expectations allow time to assess the data—without complacency if risks materialise."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
OCBC strategists Sim Moh Siong and Christopher Wong describe Gold’s latest bounce as largely technical after a near 20% drawdown since the Iran conflict began. They see scope for a near‑term rebound but stress that a more durable recovery likely requires prices to reclaim key resistance levels, while higher real yields and reduced Fed cut expectations keep the macro backdrop challenging.
Rebound capped by real yields
"Gold rebounded last Friday, with the bounce appearing largely technical after prices had fallen close to 20% at one point since the onset of the Iran conflict."
"While this suggests scope for a near-term rebound, it remains uncertain whether the move can be sustained."
"Key resistance levels are seen at 4,624 (100DMA), 4,670 (38.2% fibo retracement) and 4,850 (50% fibo)."
"A more durable recovery would likely require prices to reclaim and hold above these levels."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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