Forex News
Iran's military warned of powerful attack on predetermined targets in view of repeated threats by US President Donald Trump.
Key quotes
If US wants to maintain the shadow of war, it should consider the Strait of Hormuz effectively fully closed.
Will use force if necessary to break blockade.
Won't reopen Hormuz while naval blockade persists.
Market reaction
At the time of writing, the West Texas Intermediate (WTI) is up 4.98% on the day at $89.80.
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.
- Gold price tumbles to near $4,720 in Wednesday’s early Asian session.
- Ongoing conflict in the Middle East exerts some selling pressure on the yellow metal.
- US Retail Sales rose 1.7% in March, hotter than expected.
Gold price (XAU/USD) attracts some sellers to around $4,720 during the early Asian session on Wednesday. The precious metal falls as renewed Strait of Hormuz disruption stokes inflation concerns.
Bloomberg reported on Wednesday that US President Donald Trump will extend the ceasefire with Iran until talks between the two countries have progressed. Trump’s announcement struck a markedly different tone from earlier in the day when he said, “I expect to be bombing” if Iran didn’t meet his conditions, adding the military was “raring to go.”
Rising energy costs are stoking inflation fears, raising the bar for cutting rates. Gold is often used amid geopolitical uncertainty but does not yield interest, making it less attractive when interest rates are high.
However, hotter-than-expected US Retail Sales data could lift the US Dollar (USD) and weigh on the USD-denominated commodity price. Data released by the US Census Bureau on Tuesday showed that Retail Sales in the United States (US) rose 1.7% MoM in March, compared to the 0.7% increase (revised from 0.6%) seen in February. This figure came in above the market consensus of 1.4%. On a yearly basis, Retail Sales climbed 4.0% in March, matching February's print.
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’s Bob Savage highlights South Korea’s powerful export rebound, led by semiconductors and strong shipments to China and the U.S., generating a sizeable trade surplus. However, South Korean equities remain deeply below prior holdings peaks, tightening financial conditions just as the new BoK governor adopts a cautious stance amid Middle East-driven Oil and inflation risks.
Tech-led trade boom versus tight conditions
"South Korea’s exports in the first 20 days of April rose 49.4% y/y on both a working-day-adjusted and unadjusted basis. This marked an acceleration from 40.4% y/y in the equivalent period in March, while imports increased by 17.7% y/y, resulting in a trade surplus of $10.4bn."
"Export growth was driven by semiconductors (+182.5% y/y), computer peripherals (+399% y/y) and oil products (+48.4% y/y), although autos and auto parts recorded falls. By destination, there were y/y rises in shipments to China (+70.9%), the U.S. (+51.7%), the EU (+10.5%) and Taiwan (+77.1%)."
"Rising oil prices linked to the Middle East tensions have driven up import costs, with import prices around 16% higher and export prices also rising over 16% m/m, adding to inflation pressures. KOSPI +2.72% to 6388, USDKRW +0.14% to 1470.45, 10y KTB -3bp to 3.685%."
"The new BoK governor Shin Hyun-song has signaled a cautious and flexible monetary policy stance at the start of his term. He cited heightened uncertainty emanating from the Middle East crisis, with rising oil prices adding to upward pressure on inflation while weighing on growth and increasing financial market volatility."
"The BoK earlier held its benchmark rate at 2.5%, in a seventh consecutive hold despite being in an easing cycle, with Shin describing policy as requiring “strategic patience” given unclear inflation and growth paths."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Trump extended his Iran deadline after Tehran skipped fresh talks, lifting risk appetite before US data took over.
- UK ILO Unemployment fell to 4.9% versus 5.2% expected, but the Claimant Count rose 26.8K against the 21.4K forecast.
- Wednesday's UK CPI release is the next major catalyst, with the headline expected to lift to 3.3% YoY from 3% prior.
GBP/USD slid 0.15% on Tuesday, settling close to 1.3500 after a volatile session that traded a roughly 60-pip range. Price unwound twice during European and US trade with sharp downside candles, only to bounce back off the lows on each occasion before recovering modestly into the close.
The Iran standoff drove the early tape after President Trump extended his self-imposed deadline for direct talks, with Tehran declining to send a delegation to the proposed venue. The White House framed the move as a final goodwill gesture, though traders read it as another postponement in a sequence of shifting positions. Risk appetite firmed at first, weighing on the US Dollar, before stronger-than-expected March Retail Sales (+1.7% MoM versus +1.4% forecast) and notably hawkish testimony from Fed Chair-designate Kevin Warsh pulled flows back into the Greenback through the US session.
Read more: Did Tehran snub the peace talks first?
On the Sterling side, March UK employment data offered a mixed read, with the ILO Unemployment Rate falling to 4.9% versus 5.2% consensus while the Claimant Count climbed 26.8K against the 21.4K forecast and 3M Employment Change slowed to 25K from 84K. Wages stayed firm, with Average Earnings (excluding bonus) at 3.6% YoY versus 3.5% expected. Wednesday's March Consumer Price Index (CPI) release is the headline event for the Pound this week, with consensus pointing to a 3.3% YoY headline print versus 3% previously and the Core measure forecast steady at 3.2%.
GBP/USD 15-minute chart
Technical Analysis
In the fifteen-minute chart, GBP/USD trades at 1.3504, holding below the daily open at 1.3529 and keeping a mild bearish intraday tone as price action remains capped under that reference point. The Stochastic RSI hovers in the upper half of its range after rebounding from oversold territory, hinting at some corrective upside potential, but this momentum improvement so far only suggests consolidation rather than a clear shift in trend while the pair trades under the opening level.
On the topside, the day’s open at 1.3529 acts as immediate resistance and would need to be reclaimed to ease the current downward pressure and open the way for a more meaningful recovery. Until that barrier is surpassed, the lack of clearly defined nearby supports on the chart leaves the pair vulnerable to further dips, with traders likely watching prior intraday lows on shorter time frames for signs of basing.
In the daily chart, GBP/USD trades at 1.3504, holding a constructive near-term bias as it remains above both the 50-day and 200-day exponential moving averages (EMAs) at 1.3424 and 1.3364 respectively. The short-term trend tone is supported by this stacked EMA configuration, though the Stochastic RSI hovering deep in overbought territory near 90 suggests upside momentum may be stretched and vulnerable to consolidation or a corrective pause.
On the downside, initial support is seen at the 50-day EMA around 1.3424, with a deeper floor reinforced by the 200-day EMA near 1.3364 if selling pressure extends. As long as spot holds above these moving averages on closing bases, pullbacks are likely to be treated as corrective within the broader advance, while overbought momentum readings hint that bulls may need to absorb a period of consolidation before attempting a sustained break higher.
(The technical analysis of this story was written with the help of an AI tool.)
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling 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, its currency will benefit 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.
- Trump extended his Iran deadline after Tehran skipped fresh talks, easing immediate concerns over the Strait of Hormuz.
- US March Retail Sales beat at 1.7% MoM, while Fed Chair-designate Warsh delivered hawkish testimony to Congress.
- Japan's March trade data is due late Tuesday, with National CPI to follow Thursday.
USD/JPY rose 0.37% on Tuesday, settling close to 159.40 after pushing as high as 159.65 during the US session. Price has held a rangebound pattern between roughly 158.55 and 159.65 over the past several sessions, with directional moves during overlap hours giving way to tighter, small-bodied candles in quieter periods.
The standoff between Washington and Tehran took a fresh turn after President Trump extended his self-imposed deadline for direct talks at the last minute, with Iran declining to send a delegation to the proposed venue. The White House framed the move as a final goodwill gesture before reverting to maximum pressure, though markets read it as another postponement in a sequence of shifting positions. Traders largely welcomed the de-escalation, with risk assets firming and the US Dollar Index slipping despite stronger-than-expected March Retail Sales (+1.7% MoM versus +1.4% forecast) and notably hawkish testimony from Fed Chair-designate Kevin Warsh.
Read more: Did Tehran snub the peace talks first?
On the Yen side, Japan's heavy dependence on imported crude leaves the currency disproportionately exposed to any escalation around the Strait of Hormuz, keeping JPY a structural underperformer through the standoff. Tuesday evening's adjusted merchandise trade data and Thursday's National Consumer Price Index (CPI) release (consensus 1.8% YoY for the ex-Fresh Food measure versus 1.6% prior) are the next domestic catalysts.
USD/JPY 15-minute chart
Technical Analysis
In the fifteen-minute chart, USD/JPY trades at 159.41. The pair holds a mild bullish intraday bias as it trades above the day’s open at 158.88, suggesting dips remain supported for now. The Stochastic RSI has eased toward mid-range readings near 36, indicating that upside momentum has cooled after earlier overbought conditions but has not yet flipped decisively bearish.
On the downside, immediate support is located at the current intraday pivot area around 159.41, with a deeper floor at the day’s open near 158.88 if sellers gain traction. With no nearby technical resistance levels provided, price action around these supports and the evolution of short-term momentum signals will be key to gauging whether the pair can extend its advance or slip into a corrective phase.
In the daily chart, USD/JPY trades at 159.41, maintaining a constructive bullish bias as it holds above both the 50-day exponential moving average (EMA) at 158.20 and the 200-day EMA at 154.64. The short-term uptrend remains intact while spot stays supported by these rising averages, although the Stochastic RSI near 27 hints at fading upside momentum after recent gains.
On the downside, immediate support is seen around the 159.40 area as a near-term pivot, followed by the 50-day EMA at 158.20 and then the 200-day EMA near 154.64, where buyers would be expected to re-emerge on deeper pullbacks. With no clear resistance levels derived from the present indicator set, further direction will likely depend on whether buyers can defend the 159 handle and keep price anchored above the 50-day EMA despite softening momentum signals.
(The technical analysis of this story was written with the help of an AI tool.)
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
OCBC strategists Sim Moh Siong and Christopher Wong highlight that USD/TWD has been grinding lower, supported by strong Taiwan equities, foreign inflows and robust tech exports. They note Taiwan Dollar (TWD) is re-coupling with the technology cycle and remains fundamentally supported. However, USD/TWD shows a falling wedge pattern with Relative Strength Index (RSI) near oversold, suggesting scope for a bullish reversal from support around 31.40–31.50.
Tech cycle supports TWD, chart stretched
"USD/TWD continued to trade lower over the past few sessions."
"With foreign inflows returning to Taiwan equities and tech exports staying strong, TWD appears to be trading more closely with the technology cycle again."
"On net, TWD remains supported by both portfolio inflows and external trade fundamentals."
"Bearish momentum on daily chart intact while RSI is near oversold conditions."
"Price action continues to show falling wedge pattern – typically associated with bullish reversal."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- NZD/USD trims gains despite USD softening after mixed session flows.
- The Greenback loses traction amid lower yields and improved sentiment, even as geopolitical tensions linger.
- Fed pressure narrative intensifies as Trump pushes for cuts and Warsh signals potential policy and communication changes.
The NZD/USD receded during the American session, recovering toward the 0.5880 area as the US Dollar (USD) lost some traction despite ongoing geopolitical risks and political pressure on the Federal Reserve.
While the Greenback initially held firm on safe-haven demand linked to tensions around the Strait of Hormuz, momentum faded earlier in the Asian session. A pullback in US yields and a modest improvement in risk sentiment allowed currencies like the Kiwi to gain ground.
Markets also digested fresh comments on United States (US) monetary policy, as President Donald Trump reiterated his preference for lower interest rates, stating he would be “disappointed” if Kevin Warsh failed to cut rates “right away” if confirmed as the next Fed Chair.
Warsh acknowledged that most presidents tend to favor lower rates but stressed that the independence of the Federal Reserve ultimately rests with the institution. He also downplayed tariff-related inflation risks, suggesting price pressures have eased somewhat, and argued that a smaller balance sheet could support lower rates, improved inflation, and stronger economic growth.
Additionally, Warsh pushed back against forward guidance, criticizing the number of Fed officials signaling rate paths in advance, and called for broader structural changes, including new tools, updated communication strategies, and a revised inflation framework, noting current data used to assess inflation is “quite imperfect.”
Short-term technical analysis:
On the four-hour chart, NZD/USD trades at 0.5888. The pair is hovering just under the 20-period Simple Moving Average (SMA) at 0.5891, while holding well above the 100-period SMA at 0.5813, which leaves the near-term bias broadly neutral. The Relative Strength Index (RSI) around 50 reinforces the idea of consolidation, suggesting that directional conviction is currently lacking as price oscillates between nearby support and resistance levels.
On the topside, initial resistance is provided by the 20-period SMA at 0.5891, followed by horizontal barriers at 0.5904 and 0.5907, ahead of a higher cap near 0.5965. On the downside, immediate support is seen at 0.5887, with a further floor at 0.5874; a deeper slide would expose the 100-period SMA at 0.5813 as the next key demand area.
(The technical analysis of this story was written with the help of an AI tool.)
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