Forex News
- Cable climbed for a fourth straight session on Thursday, but upside momentum is fading near a key resistance zone around 1.3450.
- Hotter-than-expected February PCE data did little to dent the risk rally, though hawkish Federal Reserve minutes linger in the background.
- No UK data on Friday's calendar leaves GBP/USD entirely at the mercy of the March Consumer Price Index release.
- Rate futures show almost no chance of a Fed cut before September, keeping the US Dollar's yield advantage intact.
GBP/USD added 0.31% on Thursday, pushing into the mid-1.3400s as the US-Iran ceasefire continued to weigh on the US Dollar. But the rally is starting to feel laboured. The pair touched 1.3480 earlier in the session before pulling back, and the 1.3400-1.3450 zone is shaping up as a stubborn technical ceiling.
The ceasefire giveth, PCE taketh away
Sterling has been riding the same wave as the rest of the G10: the two-week ceasefire between the US and Iran has crushed the Dollar's safe-haven premium, allowing risk-sensitive currencies to recover from their early-April lows. GBP/USD bounced from around 1.3150 at the start of the month and has now clawed back roughly 300 pips. But Thursday's session showed signs that the easy gains are over. The February Personal Consumption Expenditures (PCE) report, released at 12:30 GMT, showed headline inflation at 2.8% YoY, above the 2.6% consensus. Core PCE ticked to 3.0% YoY, matching forecasts but underlining how far the Federal Reserve (Fed) remains from its 2% target. Monthly readings of 0.4% on both headline and core were firmer than expected. The data did not spark a meaningful Dollar rally, but it planted a seed of doubt about how long the ceasefire-driven selloff in the Greenback can last.
March CPI: the week's main event arrives Friday
Friday's March Consumer Price Index (CPI) release at 12:30 GMT is the most important data point of the week, and arguably the most consequential inflation print in months. Economists expect headline CPI to jump 0.8% MoM, which would push the YoY rate to roughly 3.1%-3.3%, reflecting the initial energy price shock from the Iran conflict. Core CPI is forecast at a more benign 0.2%-0.3% MoM and 2.7% YoY. The distinction between headline and core will be critical. If core CPI comes in soft, markets can argue the inflation spike is energy-driven and temporary, particularly if the ceasefire holds and Oil prices continue to ease. That would be Sterling-positive. But if core surprises to the upside, suggesting that elevated energy costs are already bleeding into broader prices, the Fed's hawkish contingent gains ammunition and the US Dollar could stage a sharp reversal.
GBP/USD daily chart
Technical Analysis:
In the daily chart, GBP/USD trades at 1.3435, holding a bullish near-term bias as spot remains above both the 50-day and 200-day Exponential Moving Averages (EMAs) at 1.3388 and 1.3372 respectively. The alignment of shorter- and longer-term EMAs below price suggests an underlying constructive structure, while the Stochastic RSI around 62 indicates positive but not yet overbought momentum, hinting that buyers still retain control, albeit with scope for consolidation after the recent advance.
On the downside, immediate support emerges at the 50-day EMA near 1.3388, with the 200-day EMA at 1.3372 reinforcing a slightly deeper demand zone should a pullback extend. As long as GBP/USD holds above this EMA cluster, the broader upside tone is likely to persist, and any dips towards these levels may attract fresh buying interest, with the absence of nearby mapped resistance leaving the topside technically open until new highs establish a clearer cap.
(The technical analysis of this story was written with the help of an AI tool.)
- The Australian Dollar gained ground for a fourth consecutive session, pushing toward 0.7100 for the first time since late March.
- February Personal Consumption Expenditures data came in hotter than forecast, with headline PCE printing 2.8% YoY against a 2.6% consensus.
- The US-Iran ceasefire continues to fuel risk appetite, but Friday's Consumer Price Index report could shift the narrative sharply.
- Rate futures now price the Federal Reserve holding at 3.50%-3.75% through at least September.
AUD/USD rose 0.56% on Thursday, extending its winning streak to four sessions as the ceasefire-driven risk rally continued to lift the Aussie Dollar. The pair is now flirting with the 0.7100 handle, a level it has not traded at since late March, and well above the 200-period exponential moving average near 0.6950 on the hourly chart. Stochastic RSI has pushed back above 80, suggesting momentum is running hot but not yet exhausted.
The ceasefire trade keeps giving
The two-week halt in US military operations against Iran, announced earlier in the week, remains the dominant driver. President Trump's decision to pause strikes in exchange for Iran's agreement to reopen the Strait of Hormuz has pulled the rug from under the US Dollar's safe-haven bid. The move has been especially generous to commodity-linked currencies like the Aussie, which had spent much of early April pinned near 0.6900 on geopolitical anxiety. The risk is that the ceasefire is fragile. Questions remain over whether Israel will halt operations in Lebanon, a condition Iran reportedly attached to the deal. Any sign of escalation over the weekend could reverse AUD/USD gains quickly.
PCE lands hot, but markets shrug
Thursday's February Personal Consumption Expenditures (PCE) data was a mixed bag. Headline PCE printed at 2.8% YoY, above the 2.6% consensus forecast, while core PCE came in at 3.0% YoY, matching expectations but still uncomfortably far from the Federal Reserve's (Fed) 2% target. On a monthly basis, both headline and core rose 0.4%, stronger than expected. In normal circumstances, that kind of print would send the US Dollar higher. But markets are clearly more focused on the geopolitical mood shift than backward-looking inflation data from February, which does not yet capture the impact of the Iran conflict on energy prices.
Friday's CPI is the real test
The March Consumer Price Index (CPI) report drops at 12:30 GMT on Friday and is expected to show the first clear imprint of the Iran war on consumer prices. Economists surveyed by FactSet expect headline CPI to surge 0.8% MoM, driven by a sharp jump in energy costs, pushing the YoY rate to around 3.1%-3.3%. Core CPI, which strips out food and energy, is forecast at a more modest 0.2%-0.3% MoM and 2.7% YoY. For AUD/USD, the CPI print is a double-edged sword. A hotter-than-expected number could revive rate hike expectations and give the US Dollar a jolt, dragging the pair off its highs. A softer core reading, on the other hand, would validate the market's view that the inflation spike is energy-driven and transitory, giving the Aussie room to push through 0.7100. With no meaningful Australian data on the calendar Friday, the pair's fate rests entirely with the US data docket.
AUD/USD daily chart
Technical Analysis
In the daily chart, AUD/USD trades at 0.7084. The pair holds a constructive near-term bias as spot remains comfortably above both the 50-day exponential moving average (EMA) at 0.6967 and the 200-day EMA at 0.6752, keeping the broader uptrend intact after the latest bounce from sub-0.70 levels. The Stochastic RSI around 57 hints at improving but not yet overbought momentum, suggesting that buyers still retain control while leaving room for further upside extension.
On the downside, immediate support is seen near the recent close at 0.7084, with the 50-day EMA at 0.6967 providing the next layer of dynamic support ahead of the more strategic 200-day EMA at 0.6752. As long as AUD/USD holds above the 50-day EMA, pullbacks are likely to be treated as corrective within the broader bullish structure, while a sustained break beneath that level would expose the 200-day EMA as the next downside target.
(The technical analysis of this story was written with the help of an AI tool.)
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
- Head-and-shoulders pattern emerges as USD/JPY prints lower highs and lows.
- RSI trends toward 50, confirming growing bearish momentum pressure.
- Break below 158.48 exposes 157.88 and 157.35 support levels.
USD/JPY rises and tests the 20-day Simple Moving Average (SMA) at 159.19 on Thursday, yet it retreated amid an improvement in risk appetite, a headwind to the safe-haven appeal of the US Dollar. At the time of writing, the pair trades at 158.99, up 0.28%.
USD/JPY Price Forecast: Technical Outlook
The USD/JPY chart shows the pair is forming a quasi-head-and-shoulders pattern, which could signal further downside. Worth noting, the pair registered a lower high and a lower low after reaching a yearly peak of 161.46, an indication that in the short.-term, sellers are gathering strength.
Furthermore, the Relative Strength Index (RSI) is trending lower towards its 50-neutral level, indicating that sellers are in charge.
For a bearish continuation, the USD/JPY needs to clear the April 9 daily low of 158.48. Once surpassed, the path to challenge the April 8 swing low of 157.88 increases. Below here, fresh buying pressure is seen at the 50-day SMA at 157.35, ahead of the 100-day SMA at 156.85.
Conversely, if USD/JPY breaks past the 20-day SMA at 159.19, it exposes the pair to selling pressure around 160.00, a line in the sand for Japanese authorities to increase their intervention threats. Hence, the USD/JPY remains capped on the upside. But if market mood remains optimistic, the downside risks emerge, further underpinned by falling US bond yields.
USD/JPY Price Chart — Daily
Japanese Yen Price This week
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies this week. Japanese Yen was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -1.53% | -1.80% | -0.41% | -0.88% | -2.78% | -2.92% | -1.30% | |
| EUR | 1.53% | -0.26% | 1.15% | 0.65% | -1.25% | -1.40% | 0.22% | |
| GBP | 1.80% | 0.26% | 1.35% | 0.91% | -0.99% | -1.13% | 0.52% | |
| JPY | 0.41% | -1.15% | -1.35% | -0.48% | -2.37% | -2.50% | -0.92% | |
| CAD | 0.88% | -0.65% | -0.91% | 0.48% | -1.90% | -2.02% | -0.41% | |
| AUD | 2.78% | 1.25% | 0.99% | 2.37% | 1.90% | -0.14% | 1.52% | |
| NZD | 2.92% | 1.40% | 1.13% | 2.50% | 2.02% | 0.14% | 1.67% | |
| CHF | 1.30% | -0.22% | -0.52% | 0.92% | 0.41% | -1.52% | -1.67% |
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 Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
- Persistent geopolitical tensions continue to support USD demand.
- Elevated oil prices are reinforcing inflation expectations in the US.
- A cautious RBNZ versus a relatively firm Fed stance makes a gap in the NZD/USD.
The NZD/USD pair is trading muted near 0.5860 on Friday, after climbing for four straight days, hovering near recent highs as the US Dollar (USD) remains supported by a combination of geopolitical tensions and a cautious Federal Reserve outlook.
The breakdown in communication between the United States and Iran, alongside ongoing military activity and uncertainty around the Strait of Hormuz, has kept risk appetite fragile. This environment tends to weigh on risk-sensitive currencies like the New Zealand Dollar (NZD), while supporting the USD through safe-haven demand and elevated US yields.
At the same time, recent US data has reinforced a resilient economic backdrop. While Initial Jobless Claims came in higher than expected, suggesting some softening in the labor market, the broader narrative remains one of relative strength. More importantly, inflation concerns persist, particularly as rising oil prices linked to geopolitical tensions threaten to feed into headline inflation.
This dynamic supports the Federal Reserve’s cautious stance, with policymakers signaling they are in no rush to cut rates. The “higher-for-longer” narrative continues to underpin the Greenback, keeping NZD/USD on the defensive.
On the New Zealand side, the backdrop remains mixed following the recent Reserve Bank of New Zealand (RBNZ) decision. While inflation remains slightly above target, policymakers are balancing upside price risks with a fragile domestic economy. Markets see limited room for aggressive tightening, reducing the NZD cap.
Technical analysis:
On the four-hour chart, NZD/USD trades at 0.5863. The pair holds a constructive near-term bias, trading above both the 20-period simple moving average (SMA) at 0.5791 and the 100-period SMA at 0.5779, which underpins the recent recovery. However, the Relative Strength Index (14) sits deep in overbought territory near 75, hinting that upside momentum is stretched even as price action remains supported.
On the topside, initial resistance emerges at 0.5868, with further barriers aligning at 0.5907 and 0.5930, ahead of a more distant hurdle around 0.5965. On the downside, immediate support is seen at 0.5854, followed by 0.5838 and 0.5831, while the clustered 20-period and 100-period SMAs at 0.5791 and 0.5779 respectively are set to act as a deeper demand zone on any corrective pullback.
(The technical analysis of this story was written with the help of an AI tool.)
- EUR/USD boosted by improving risk appetite, which dragged the US Dollar lower.
- Optimism in peace talks between Israel and Lebanon supported the Euro’s advance.
- Traders now await US CPI as the next major catalyst.
The EUR/USD pair edges higher by some 0.33% on Thursday as risk appetite improves, with Israel and Lebanon seeming ready to begin peace talks, even though hostilities continued. This weighed on the US Dollar (USD), which is on the back foot, down 0.18% according to the US Dollar Index (DXY). At the time of writing, the pair trades near the 1.1700 milestone, up 0.32%, after hitting a five-week high of 1.1723 earlier in the day.
Euro gains as peace talk hopes pressure Dollar before US CPI data.
The Middle East conflict grabbed the headlines as economic data took a back seat, awaiting attention, and the US Consumer Price Index (CPI) report on Friday might be what economists need to crunch the numbers.
Meanwhile, Israel escalated its attacks on Hezbollah, as the fragile ceasefire between the US and Iran is threatened by Israeli attacks on Lebanon, with the Iranian regime emphasizing that the truce also extends to the Israel-Lebanon border. Recently, Israeli Prime Minister Benjamin Netanyahu thanked the Lebanese Prime Minister Nawaf Salam call, as both countries agreed to begin discussions next Tuesday in Washington.
The dip in Oil prices is a headwind for the Euro (EUR), as most countries are net energy importers. Also, the strong positive correlation between WTI, denominated in American dollars, pushed the Greenback lower, as depicted by the DXY, which tracks the USD's performance against six currencies and trades at 98.82.
Data from the US showed that inflation, although it remains above the Fed’s 2% goal, remains contained at around 2.8% on an annual basis, as reflected in the Personal Consumption Expenditures (PCE) Price Index. The core PCE, the Fed's main inflation gauge, ticked a tenth lower from 3.1% to 3% in February, as economists had forecast. Meanwhile, the US economy expanded at a lower pace than the expected 0.7% in Q4 2025, rising 0.5%.
Other data showed that the jobs market had stabilized after the release of Initial Jobless Claims for the week ending April 4, rising by 219K, above forecasts for a 210K increase, up from the 203K number for the previous week.
Despite the solid data release and 'hawkishly' tilted FOMC minutes from the last meeting, EUR/USD is projected to extend its gains on monetary policy divergence. Market participants suggest that the European Central Bank (ECB) would tighten policy by 56 basis points towards year-end.
In Europe, Germany’s industrial production fell unexpectedly in February, pointing to a sluggish first quarter, despite stronger-than-expected export growth driven by solid European demand.
EUR/USD Price Analysis: Technical Outlook
In the daily chart, EUR/USD trades at 1.1696. The pair is marginally above the clustered 50-, 100- and 200-day simple moving averages (SMAs) around 1.1677, which now act as near-term support and hint at an improving underlying tone. Price is also testing the descending resistance trend line drawn from 1.1929, while the 14-day Relative Strength Index hovers near 58, suggesting constructive but not yet overbought bullish momentum as the pair challenges this pivot region.
On the downside, immediate support is seen at the upward-sloping trend line and the nearby SMA cluster between 1.1696 and 1.1677, where a break would weaken the nascent bullish bias and open the way to deeper retracements. On the topside, a sustained move above the descending resistance trend line at 1.1696 would signal a clearer bullish breakout, exposing higher recovery levels in the sessions ahead as sellers lose control of the recent downtrend structure.
(The technical analysis of this story was written with the help of an AI tool.)
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
DBS Group Research economist Radhika Rao highlights sharp swings in Indonesian assets, with the Rupiah, bonds and equities rebounding after recent losses. She notes strong Bank Indonesia intervention and the importance of upcoming FTSE Russell and MSCI index decisions for Indonesia’s equity market status. Rao also flags a wider 1Q26 fiscal deficit and rising energy subsidy pressures on the budget.
Rupiah volatility, index risk, fiscal pressures
"After a three-day slide to fresh lows, IDR rallied back into the high-16k handle on Wednesday, accompanied by gains in domestic bonds (bull steepened) and equities, on positive global cues."
"Earlier, BI had reiterated that IDR stability was its “top priority”."
"Testament to the central bank’s strong intervention presence, foreign reserves moderated to $148.2bn in Mar vs $151.9bn in Feb, back at mid-2024 levels."
"Meanwhile, a fragile truce amongst the global actors in the Middle east conflict will keep domestic markets glued to developments, with IDR short-end bond yields to find support as rate cuts get priced out."
"This year’s energy subsidy bill of IDR 318trn was built on an oil assumption of $70/bl and USDIDR at 16500, both of which have been breached since Mar."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Gold gains as softer Treasury yields and a weaker Dollar offer support.
- Israel-Lebanon headlines and Hormuz disruptions keep haven demand elevated.
- Traders now await the US CPI and Michigan inflation expectations data.
Gold price (XAU/USD) resumed its rally on Thursday after Israeli Prime Minister Benjamin Netanyahu said that he is open to negotiations with Lebanon. This, along with broad US Dollar weakness, keeps the yellow metal underpinned, rising to challenge the $4,800 milestone.
Bullion stays bid as truce hopes, weak data weigh on greenback
In a turn of events, Netanyahu said on Thursday that he is seeking direct talks with Beirut, a day after Israel's largest attack killed more than 300 people in Lebanon. Netanyahu said that the negotiation “will focus on disarming Hezbollah and establishing peaceful relations between Israel and Lebanon.”
Recently, AFP reported that Lebanon is seeking a ceasefire before talks with Israel. In the meantime, the Strait of Hormuz remains largely shut despite the first 24 hours of the US-Iran two-week truce, as news revealed that just 5 vessels — one carrying oil — passed through the strait, compared with roughly 140 ships per day before the war.
In the meantime, Pakistan is preparing for the first round of talks between the US and Iran in Islamabad.
This news pushed Oil prices lower, with WTI trading around $95.60, down 0.13% on the day. The Greenback, which had been treading water throughout the day, fell 0.30%, as the US Dollar Index (DXY), which measures its performance against six currencies, fell to 98.63.
Gold rally extends as the drop in US Treasury yields boosts the yellow metal’s appeal as a haven. The US 10-year Treasury yield drops two basis points to 4.279%.
Data that had taken a back seat showed that the US economy grew at a rate below 0.7% YoY in the last quarter of 2025, as analysts estimated. The Gross Domestic Product (GDP) rose by 0.5% YoY, according to the US Bureau of Economic Analysis. At the same time, other data showed that the Fed’s favorite inflation gauge, the Core Personal Consumption Expenditure (PCE) Price Index, decreased in February from 3.1% to 3% YoY as estimated.
US jobs data held up despite a rise in Initial Jobless Claims to 219K last week, above expectations and the prior reading. Still, Continuing Claims fell to 1.794 million, their lowest since May 2024, signaling ongoing labor market resilience.
Traders' expectations for Fed rate cuts remained unchanged, as shown by money markets, which estimated 7.5 basis points of easing towards the end of the year, according to Prime Market Terminal (PMT) data.
Fed interest rate probabilities
Ahead on Friday, the US economic docket will feature the Consumer Price Index (CPI) report for March, which is projected to show a substantial increase, mostly in the headline print, rising from 2.4% to 3.3%. Core CPI is expected to rise from 2.5% to 2.7%. Besides this, traders' focus will be on the University of Michigan Consumer Sentiment and the release of inflation expectations.
XAU technical analysis: Gold’s recovery stalls at $4,800 as bears eye 20-day SMA
Despite forming a shooting star on Wednesday, Gold is showing signs of recovery, even though buyers remain far from reclaiming the next key resistance seen at $4,857, April’s 8 daily high. The Relative Strength Index (RSI) shows buyers are gathering momentum as the index cleared the 50 neutral level.
With that said, should Gold reclaim $4,800, traders could challenge $4,857 before targeting the psychological $4,900. Further upside lies overhead at $5,000.
On the other hand, if Gold slumps below the 20-day Simple Moving Average at $4,690, it would open the path to challenge the 100-day SMA at $4,656. Below this level sits the April 2 daily low of $4,553.
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.
BNY Strategist Geoff Yu highlights that CNY initially behaved like a secondary safe haven during the conflict, with strong performance and managed volatility, while flows showed an inverse relationship with CGB holdings. Early Q2 data now point to simultaneous buying of CNY and Chinese Government Bonds (CGBs), suggesting growing outright CNY exposure despite low relative yields and ongoing PBoC resistance to REER appreciation.
Flows hint at evolving Chinese safe-haven bid
"During the first week of the conflict, CNY was the best-performing currency, prompting us to explore whether it could serve as a secondary safe haven (after the dollar). Compared to savings-heavy APAC peers, its energy resilience was stronger, and currency volatility was heavily managed."
"However, our flows indicated that the period of CNY purchases was fully aligned with large outflows from Chinese government bonds. The CNY-CGB inverse relationship has been consistent for most of the year so far, so the CNY purchases reflected unwinding of CGB holdings, likely driven by fears of higher inflation pushing down real rates."
"CGB interest returned toward month-end, and we saw CNY flows also shift back into net selling as hedging likely picked up. However, early Q2 flows point to a change in behavior, with CNY and CGBs now both being net bought. This could be an early indication that markets are seeking greater CNY exposure outright – with CGBs now being bought at lower hedge ratios."
"On the other hand, there is also the possibility that for the first time since the post-pandemic re-opening, there is genuine reflation taking place in China, and the market may be misjudging the outlook for front-end yields. Coupled with expectations of an easing-inclined Fed (even before the ceasefire was announced), keeping the same hedging dynamics on any Chinese asset may not have the same risk-reward as in previous years."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Here is what you need to know for Friday, April 10:
The US Dollar Index (DXY) dropped to the 98.80 price region after the United States (US) Personal Consumption Expenditures (PCE) report confirmed that inflation remains sticky, reinforcing the Federal Reserve’s (Fed) cautious stance. However, this was quickly overshadowed by a significant upside surprise in Initial Jobless Claims, which pointed to potential softening in the labor market. The combination of persistent inflation and weakening employment data created uncertainty around the Fed’s path, prompting a decline in US Treasury yields, which ultimately weighed on the Greenback.
At the same time, geopolitical headlines introduced a slightly more constructive tone. An Israeli official indicated that operations in Lebanon could be eased in the coming days due to US pressure, while Israel also signaled direct talks with Lebanon regarding Hezbollah disarmament. Despite these developments, the broader situation remains fragile, with military activity ongoing and risks still elevated across the region.
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 Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.33% | -0.31% | 0.25% | -0.19% | -0.47% | -0.59% | -0.14% | |
| EUR | 0.33% | 0.04% | 0.61% | 0.17% | -0.14% | -0.23% | 0.20% | |
| GBP | 0.31% | -0.04% | 0.56% | 0.13% | -0.19% | -0.28% | 0.17% | |
| JPY | -0.25% | -0.61% | -0.56% | -0.45% | -0.73% | -0.86% | -0.39% | |
| CAD | 0.19% | -0.17% | -0.13% | 0.45% | -0.27% | -0.40% | 0.03% | |
| AUD | 0.47% | 0.14% | 0.19% | 0.73% | 0.27% | -0.09% | 0.34% | |
| NZD | 0.59% | 0.23% | 0.28% | 0.86% | 0.40% | 0.09% | 0.44% | |
| CHF | 0.14% | -0.20% | -0.17% | 0.39% | -0.03% | -0.34% | -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).
EUR/USD edged higher toward 1.1700, supported by the pullback in US yields and a modest improvement in risk sentiment. Still, gains remained contained as investors stayed cautious amid lingering geopolitical uncertainty and uneven global growth prospects.
GBP/USD followed a similar path, recovering gradually near the 1.3430 region as the USD softened. The pair continues to trade largely as a function of broader market sentiment, with limited domestic catalysts driving price action.
USD/JPY lost bullish traction and hovered near the 159.00 region. The pair was particularly sensitive to the decline in US yields, which reduced the appeal of carry trades. While the Japanese Yen (JPY) did not surge aggressively due to still-fragile sentiment, it benefited enough to cap further upside in the pair.
AUD/USD moved modestly higher near 0.7080, supported by lower US yields and a slight improvement in risk appetite following the geopolitical headlines
West Texas Intermediate (WTI) Oil remained elevated but showed signs of stabilization as the prospect of easing Israeli operations in Lebanon tempered immediate supply fears, even as the broader Middle East conflict continues to underpin prices.
Gold held firm near $4,771, supported by lower US yields and a softer USD. The precious metal continues to benefit from both declining real yields and persistent geopolitical uncertainty, maintaining its appeal as a hedge.
What’s next in the docket:
Friday, April 10
- Germany Harmonized Index of Consumer Prices
- Canadian Employment data
- US CPI
- US Factory Orders
- US Michigan Consumer Index’s
- US UoM 1-year Consumer Inflation Expectations
- US UoM 5-year Consumer Inflation Expectation
- US Monthly Budget Statement
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
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