Forex News

The United States (US) House of Representatives is poised to begin casting votes on the Republican party's tax and budget bill that is front-loaded with many of President Donald Trump's wishlist items. President Trump has colloquially refered to the tax and budget bill as a "big, beautiful bill", leading Congressional Republicans to officially rename the document the "One Big Beautiful Bill Act".
Key Republicans have been hammering on dissidents to the bill within their own party after several hard-line Republicans voiced displeasure with the budget outline: some felt that the budget doesn't include enough cuts to critical federal spending programs like Medicaid, while others felt that the budget does the exact opposite of the Republican platform's stated goals of reducing the government deficit.
The budget bill is expected to be voted on sometime Thursday, and if passed, the One Big Beautiful Bill Act is poised to add somewhere between $3T and $4T to the US federal budget deficit over the next ten years.

- WTI crude oil retreats below $62.00
- EIA report highlights increased supply, placing downside pressure on prices.
- Geopolitical risks, including US-Iran nuclear talks, remain a key focal point for oil prices.
Oil prices have been under persistent pressure since the inauguration of US President Donald Trump in January, weighed down by a combination of recession fears, rising global supply, and a softer US Dollar.
These factors have collectively contributed to renewed weakness in the liquid commodity, dampening the bullish momentum that previously supported elevated energy prices.
For West-Texas Intermediary (WTI) Crude Oil - the US benchmark extracted primarily from Texas and surrounding regions - prices found support late last year as global trade resumed and post-pandemic demand surged.
This resurgence helped lift energy prices through the final months of last year, particularly as supply remained constrained.
Oil prices have been under persistent pressure since the inauguration of US President Donald Trump in January, weighed down by a combination of recession fears, rising global supply, and a softer US Dollar.
These factors have collectively contributed to renewed weakness in the liquid commodity, dampening the bullish momentum that previously supported elevated energy prices.
For West-Texas Intermediary (WTI) Crude Oil - the US benchmark extracted primarily from Texas and surrounding regions - prices found support late last year as global trade resumed and post-pandemic demand surged.
This resurgence helped lift energy prices through the final months of last year, particularly as supply remained constrained.
However, under the Trump administration, new energy policy priorities, which have included proposals to expand domestic oil production and ease environmental regulations, have shifted market expectations for long-term supply growth. These developments, coupled with lingering macroeconomic uncertainty and slowing growth in major economies, have altered the broader supply-demand outlook moving into mid-2025.
Adding to the downward pressure on crude, fresh data from the US Energy Information Administration (EIA) revealed a larger-than-expected build in domestic crude inventories, signaling potential demand weakness and reinforcing concerns about oversupply.
The rise in stockpiles comes amid ongoing increases in production from both non-OPEC players, including US shale, and OPEC+, which has recently confirmed plans to ramp up output to defend market share. These supply-side pressures have further weighed on WTI, now trading below $62 per barrel.
Despite known risks surrounding the oil market, including inflation sensitivity and fiscal spillovers, geopolitical developments remain a key wildcard.
On Wednesday, reports surfaced that Israel may be preparing potential strikes on Iranian nuclear facilities, briefly pushing prices higher before gains faded in the wake of bearish inventory data. The potential for escalation in the Middle East could reintroduce risk premiums, particularly if supply routes are disrupted, though for now, the market appears more focused on structural imbalances.
WTI rally runs out of fuel below $62.00
From a technical standpoint, WTI crude recently attempted to break above the 38.2% Fibonacci retracement level ($64.179) of the January–April YTD decline.
However, the rally was capped by strong selling pressure, forming a long upper wick on the daily candlestick, a classic sign of bullish exhaustion and a potential reversal point.
This reinforces the $64.00 region as key resistance, and unless buyers can regain control above this level, near-term price action may favor further consolidation or downside movement.
The 10-day Simple Moving Average (SMA) near $61.68 is acting as dynamic support, while a clean break lower could expose the next support zone at $60.58 (23.6% Fib).
WTI Crude Oil daily chart

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.

- The Dow Jones fell on Wednesday, shedding 800 points at its lowest and slipping below 42,000.
- Investors have pivoted to concerns about the US federal budget which will send US deficits higher, not lower.
- Market concerns that the Trump administration’s bespoke budget won’t actually do anything to fix inflation or US debt issues sent Treasury yields higher, putting downward pressure on equity markets.
The Dow Jones Industrial Average (DJIA) recoiled on Wednesday, tumbling 800 and testing below 42,000 after demand for United States (US) Treasuries declined. Financial markets are showing waning interest and confidence in US debt financing, even with 20-year Treasury bonds offering a yield north of 5% for the first time since October of 2023. The bid-to-cover on 16B worth of 20-year Treasuries fell below its six-month average of 2.57, slipping to 2.46 and sending market sentiment into a brief tailspin.
The US government inches closer to approving US President Donald Trump’s “big, beautiful budget” that will add almost four trillion dollars to the US deficit over the next decade. The deficit-swelling budget comes less than a week after Moody’s downgraded US sovereign debt, citing long-running failures by the US government to reel in government spending or sufficiently increase tax receipts.
A rate cut, a rate cut, my kingdom for a rate cut!
Investor hopes for another rate cut from the Federal Reserve (Fed) continue to get pushed further out this year. According to Fed policymakers, the looming threat that US tariffs could reignite inflation and throw a wrench in US economic growth is limiting their ability to adjust policy rates as they wait for clear data. The Trump administration is barreling towards the end of its own “reciprocal tariffs” suspension deadline, and evidence of ink-on-paper trade deals remains functionally non-existent. With the future of US trade policy muddying the waters, rate traders are now split on whether the Fed will deliver its first quarter-point rate cut in September or October.
Read more stock news: US stock market slips despite Republicans inching closer to major tax cuts
Dow Jones price forecast
Fundamentals have bled through the chart paper, taking over market dynamics as investors react to headlines about trade and federal budgets. The Dow Jones Industrial Average is still trading above the 200-day Exponential Moving Average (EMA) near 41,570, at least for now. Bullish price action continues to have the wind knocked out of its sails, and buyers have thus far struggled to muscle the major equity index back to the 43,000 handle.
Dow Jones daily chart

Economic Indicator
S&P Global Composite PMI
The S&P Global Composite Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging US private-business activity in the manufacturing and services sector. The data is derived from surveys to senior executives. Each response is weighted according to the size of the company and its contribution to total manufacturing or services output accounted for by the sub-sector to which that company belongs. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the private economy is generally expanding, a bullish sign for the US Dollar (USD). Meanwhile, a reading below 50 signals that activity is generally declining, which is seen as bearish for USD.
Read more.Next release: Thu May 22, 2025 13:45 (Prel)
Frequency: Monthly
Consensus: -
Previous: 50.6
Source: S&P Global

- The Canadian Dollar climbed over 0.5% on Wednesday as markets hammer the US Dollar.
- Investors are growing apprehensive of the Greenback as Treasury yields climb.
- Federal budget deficit concerns and a stubbornly immovable Fed are crimping investor confidence.
The Canadian Dollar (CAD) caught a firm bid on Wednesday, climbing one-half of one percent during the midweek market session. It’s a data-light session during the American market window, and markets are roiling as federal debt headlines and rising Treasury yields spike market confidence into the floor.
Canadian New Housing Prices surprisingly contracted in April. The data is strictly low-tier, but the potential return of housing affordability in one of the most expensive developed countries in housing terms is providing some support for the Loonie. Impactful Canadian economic data will remain limited through the remainder of May, with the Bank of Canada’s (BoC) next rate call slated for June 4.
Daily digest market movers: Canadian Dollar catches a bid as markets fret over debt and yields
- The Canadian Dollar is on the rise in the near term, but still has plenty of work remaining to pair May’s early losses.
- US Treasury bonds saw both rising yields and declining demand on Wednesday as US government debt concerns reignite.
- A recent rise in Crude Oil prices is helping to provide some support for the Loonie. Barrel bids have made a halting recovery from recent lows.
- The US government is on pace to pass President Donald Trump’s “big beautiful tax bill” that will add $4T to the US deficit over the next ten years.
- The spending-heavy, revenue-light budget comes hot on the heels of the US losing its triple-A sovereign debt rating from the Moody’s ratings agency for the first time in over a century.
Canadian Dollar price forecast
The Canadian Dollar has gained ground against the Greenback for three straight trading sessions, pushing USD/CAD back into defensive positioning and sending bids back down to the 1.33850 region. As the Loonie pares away near-term losses against the US Dollar, USD/CAD is caught in a downside pivot below the 200-day Exponential Moving Average (EMA) near 1.4025. Technical oscillators are still caught in a downside pivot, but still have plenty of room to run before hitting oversold territory, implying USD/CAD could have some room to move further lower.
USD/CAD daily chart

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.

The US Dollar (USD) maintained its weekly leg lower well in place, weakening to new two-week lows on the back of rising concerns over the US fiscal position in light of President Trump’s tax bill and worries over the performance of the US economy.
Here’s what to watch on Thursday, May 22:
The US Dollar Index (DXY) retreated for the third consecutive day on Wednesday, breaking below the psychological 100.00 support to hit new two-week troughs. The Chicago Fed National Activity Index is due, seconded by the usual Initial Jobless Claims, Existing Home Sales and the advanced S&P Global Manufacturing and Services PMIs.
EUR/USD surpassed the key 1.1300 barrier and advanced to new two-week highs, always on the back of the intense sell-off in the Greenback. The preliminary HCOB Manufacturing and Services PMIs are expected in Germany and the Euro area, along with Germany’s IFO Business Climate and the release of the European Central Bank (ECB) Monetary Policy Meeting Accounts. In addition, the ECB’s Elderson and De Guindos are due to speak.
GBP/USD reached the 1.3470 zone for the first time since February 2022 following the weaker US Dollar and higher-than-estimated UK inflation data. The Public Sector Net Borrowing figures will be published, followed by the CBI Industrial Trends Orders, and the flash S&P Global Manufacturing and Services PMIs. Furthermore, the BoE’s Pill and Breeden will speak.
There was no respite for the downward trend in USD/JPY. That said, spot dropped for the seventh day in a row, revisiting the mid-143.00s, or two-week troughs. In Japan, Machinery Orders readings are due, ahead of the advanced Jibun Bank Manufacturing and Services PMIs, and the weekly Foreign Bond Investment data. The BoJ’s Noguchi will speak as well.
AUD/USD extended its weekly choppiness and resumed its uptrend, leaving behind Tuesday’s decline and retesting the 0.6460 region. The preliminary S&P Global Manufacturing and Services PMIs are due, while the RBA’s Hauser is also due to speak.
WTI reversed initial gains just above the $64.00 mark per barrel and deflated below $62.00 amid fears of potential supply disruptions and larger-than-expected weekly inventories, as per the EIA’s report.
Gold rose to weekly highs north of the $3,300 mark per troy ounce in response to the selling pressure hurting the US Dollar and persistent geopolitical effervescence. Silver prices, in the meantime, climbed to new three-week tops past the $33.00 mark per ounce.

- Gold rises as traders brace for vote on Trump’s debt-heavy tax bill.
- Moody’s downgrade and falling US Dollar fuel safe-haven demand for Gold.
- Middle East unrest offsets easing US-China trade tensions, keeping risk appetite muted.
Gold prices advance by over 0.50% and remain above the $3,300 mark as traders grow increasingly nervous about the United States (US) tax bill vote, along with escalating tensions in the Middle East. XAU/USD trades at $3,307 after bouncing off a daily low of $3,285.
The market mood remains downbeat as major US equity indices post losses while US Treasury bond yields rise. Market participants are awaiting the approval of President Trump’s tax-cut bill, which, according to the Congressional Budget Office (CBO), would add nearly $3.8 trillion to the US national debt.
The approval could underpin US stocks higher. However, the Greenback’s reaction is uncertain following Moody’s downgrade of US government debt last Friday, which triggered a USD sell-off, as depicted by the US Dollar Index (DXY).
The DXY, which tracks the performance of the American currency against six others, declines 0.52% to 99.49, a tailwind for bullion prices.
Heightened tensions in the Middle East boosted Gold prices, even though China-US tensions de-escalated as Beijing and Washington substantially reduced tariffs for 90 days to kick off negotiations to achieve a trade deal.
This week, traders will eye Fed speeches, Flash PMIs, housing data and Initial Jobless Claims.
Gold daily market movers: Gold rallies amid high US Treasury bond yields, weak US Dollar
- US Treasury bond yields are skyrocketing as the US 10-year Treasury note yield climbs nine and a half bps to 4.58%. Meanwhile, US real yields are also up nine and a half basis points at 2.229%.
- Bullion prices are rising due to concerns about the increase in US debt. Last week, Moody’s, the international rating agency, downgraded the US government rating from AAA to AA1, propelling Gold prices higher as the US Dollar got ditched and the US fiscal position worsened.
- On Tuesday, Federal Reserve (Fed) policymakers commented that monetary policy is appropriate, acknowledging that rising US import tariffs are inflation-prone and warrant holding rates.
- Gold price could extend its gains, boosted by geopolitical news. On Tuesday, CNN news, citing multiple sources, revealed that Israel is preparing to attack Iranian nuclear facilities.
- Data from the Chicago Board of Trade (CBOT) suggests that traders are pricing in 48.5 basis points of easing towards the end of the year.
XAU/USD technical outlook: Gold poised to test $3,350 as bulls gather steam
Gold price rally extended for the third straight day, as price action has printed successive days of higher highs and higher lows, with buyers eyeing key resistance levels. Momentum, as depicted by the Relative Strength Index (RSI), suggests that the uptrend will continue before the RSI gets to overbought territory, which could warrant a pause lying ahead.
Therefore, Gold's first resistance would be the $3,350 psychological level. Once surpassed, the next target would be $3,400, followed by the May 7 daily high of $3,438, before testing the all-time high (ATH) at $3,500.
For a bearish reversal, Gold bears must drag spot prices below $3,300. Once cleared, immediate support emerges at a May 20 daily low of $3,204, ahead of the 50-day Simple Moving Average (SMA) at $3,184.

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.

- The Mexican Peso fails to respond to rising Retail Sales, with USD/MXN breaking above 19.300
- House of Representatives' tax bill vote remains in focus, with both bulls and bears weighing the probability of a clear move in either direction.
- USD/MXN rises above prior trendline resistance with prices heading toward 19.400.
The Mexican Peso (MXN) and the US Dollar (USD) have been anxiously waiting for the release of crucial economic data and remarks from policymakers in anticipation of the next big move.
For the Mexican Peso, the release of April’s Retail Sales figures that did little to deter the movement of the pair continues to be overshadowed by the expected path of the US Dollar and the progression of the highly anticipated upcoming new “one big beautiful bill” recently proposed by US President Donald Trump.
With Mexico Retail Sales 12:30 GMT data release beating forecasts on a monthly and annual basis, developments out of the United States overshadowed the recent report, highlighting the significance of the Greenback in the current economic environment.
Meanwhile, the projected trajectory of the Greenback remains in focus as investors await further commentary from US Federal Reserve (Fed) officials and the highly anticipated House of Representatives vote on President Donald Trump’s “One Big Beautiful Bill Act.”
Market participants are closely assessing the short- and long-term implications of the proposed tax legislation, which could significantly influence the fiscal policy outlook and investor sentiment toward the US Dollar.
Mexican Peso daily digest: USD/MXN rises on hopes for a stronger Greenback
- Mexican Retail Sales increased by 0.5% in March compared to the 0.2% rise in February, with the YoY figures smashing forecasts, coming in at 4.3%, far above the 2.2% forecasts.
- As the US Dollar drives broader market direction, shifts in USD sentiment, driven by US fiscal policy, economic data, or Fed signals, tend to dictate the short-term trajectory of USD/MXN, with the Peso reacting accordingly.
- President Trump’s “One Big Beautiful Bill” aims to extend the 2017 Tax Cuts and Jobs Act and introduce new tax relief measures.
- Suggested amendments would include State and Local Tax (SALT) deductions, which are expected to triple from $10K to $30K for married couples in the US, reducing the amount of income the government receives per tax year and placing additional pressure on the fiscal budget.
- To offset the cost of expanded tax cuts, President Trump has proposed reducing expenditure on programs associated with Medicaid, food stamps, and green energy subsidies, while reallocating funds toward defense and immigration enforcement.
- On the US side, S&P Global will release the preliminary Purchasing Managers Index (PMIs) for May and Existing Home Sales data for April on Thursday for fresh economic signals.
Mexican Peso technical analysis: USD/MXN trades cautiously with trendline resistance intact
The USD/MXN has recovered from its lowest level since October, breaking through the previous psychological support level, which has now turned into resistance at 19.30.
Currently, prices have risen above the prior descending trendline established from the April decline, providing an imminent barrier of support at 19.28.
USD/MXN daily chart

The Relative Strength Index (RSI) indicator has recovered above 36.00, but continues to reflect bearish momentum. Since the 30 mark is considered a potential oversold territory, the bearish trend remains intact, with the next key support level at the round number of 19.20.
On the other hand, if USD strength resurges and prices rise above the descending trendline, USD/XN could see a retest of the April low near 19.47, bringing the 20-day Simple Moving Average (SMA) into play at 19.53.
Central banks FAQs
Central Banks have a key mandate which is making sure that there is price stability in a country or region. Economies are constantly facing inflation or deflation when prices for certain goods and services are fluctuating. Constant rising prices for the same goods means inflation, constant lowered prices for the same goods means deflation. It is the task of the central bank to keep the demand in line by tweaking its policy rate. For the biggest central banks like the US Federal Reserve (Fed), the European Central Bank (ECB) or the Bank of England (BoE), the mandate is to keep inflation close to 2%.
A central bank has one important tool at its disposal to get inflation higher or lower, and that is by tweaking its benchmark policy rate, commonly known as interest rate. On pre-communicated moments, the central bank will issue a statement with its policy rate and provide additional reasoning on why it is either remaining or changing (cutting or hiking) it. Local banks will adjust their savings and lending rates accordingly, which in turn will make it either harder or easier for people to earn on their savings or for companies to take out loans and make investments in their businesses. When the central bank hikes interest rates substantially, this is called monetary tightening. When it is cutting its benchmark rate, it is called monetary easing.
A central bank is often politically independent. Members of the central bank policy board are passing through a series of panels and hearings before being appointed to a policy board seat. Each member in that board often has a certain conviction on how the central bank should control inflation and the subsequent monetary policy. Members that want a very loose monetary policy, with low rates and cheap lending, to boost the economy substantially while being content to see inflation slightly above 2%, are called ‘doves’. Members that rather want to see higher rates to reward savings and want to keep a lit on inflation at all time are called ‘hawks’ and will not rest until inflation is at or just below 2%.
Normally, there is a chairman or president who leads each meeting, needs to create a consensus between the hawks or doves and has his or her final say when it would come down to a vote split to avoid a 50-50 tie on whether the current policy should be adjusted. The chairman will deliver speeches which often can be followed live, where the current monetary stance and outlook is being communicated. A central bank will try to push forward its monetary policy without triggering violent swings in rates, equities, or its currency. All members of the central bank will channel their stance toward the markets in advance of a policy meeting event. A few days before a policy meeting takes place until the new policy has been communicated, members are forbidden to talk publicly. This is called the blackout period.

- UK CPI inflation climbs to 3.5% YoY in April, well above the BoE’s 2% inflation target.
- Core inflation accelerates to 3.8%, raising doubts over future rate cuts.
- US Dollar tumbles as G-7 stokes speculation of Washington favoring weaker Greenback.
The Pound Sterling (GBP) rose to a new year-to-date (YTD) high of 1.3468 against the US Dollar (USD) on Wednesday as United Kingdom (UK) inflation rose, drifting away from the Bank of England's (BoE) 2% target, which had led to interest rate reductions earlier in the month. At the time of writing, GBP/USD trades at 1.3446, up 0.40%.
UK inflation spikes past forecasts, derailing BoE’s easing path and lifting GBP/USD above 1.34 as the Dollar weakens
Data from the UK has pushed aside the BoE’s intentions to continue reducing interest rates at forward meetings. The Consumer Price Index (CPI) in April rose 3.5% YoY, up from 2.6% in March, revealed the Office for National Statistics (ONS). The core CPI rose by 3.8% YoY, exceeding the 3.4% increase in March.
On the data, UK’s finance minister Rachel Reeves commented on a statement that she was disappointed and added, “I know cost of living pressures are still weighing down on working people.”
The increases in water, gas, and electricity bills contributed to higher consumer inflation. It should be noted that analysts expected CPI at 3.3% and underlying inflation at 3.6%, both figures above the prior month’s print.
Money market futures are pricing in just 35 basis points (bps) of easing from the Bank of England (BoE) towards the end of the year.
Across the Atlantic, discussions about President Trump's “One Big Beautiful Bill” continued. US House Speaker Mike Johnson stated that they had completed SALT discussions and indicated that a Thursday tax bill floor vote remains realistic.
In the meantime, the Greenback continues to weaken, as the US Dollar Index (DXY), which tracks the US Dollar’s value against a basket of six currencies, falls 0.52% to 99.50.
A meeting of the G-7 in Canada has increased speculation that the Trump administration is seeking a weaker US Dollar to reduce the trade deficit. According to Bloomberg, local media in South Korea reported that the Korean Won (KRW) was discussed at trade negotiations with the US.
Ahead this week, the UK economic docket will feature Flash PMIs and BoE speakers. In the US, traders will eye PMIs and Initial Jobless Claims for the week ending May 17, Fed speeches and housing data.
GBP/USD Price Forecast: Technical outlook
GBP/USD uptrend continued as the pair hit a new YTD peak. Momentum remains bullish, as depicted by the Relative Strength Index (RSI), which cleared the latest peak above 60, with enough room before reaching overbought conditions.
That said, GBP/USD's first key resistance level upfront would be 1.3468, followed by the 1.35 figure. If surpassed, the next stop would be the February 18, 2022, swing high at 1.3642.
Conversely, if GBP/USD slides below 1.340, the next support would be 1.3350, followed by 1.3300. Key support levels lie underneath the latter at 1.3250, 1.3200, and the 50-day Simple Moving Average (SMA) at 1.3141.
(This story was corrected on May 21 at 16:05 GMT to say that UK CPI inflation climbed to 3.5 YoY, not 3.6%)

British Pound PRICE This week
The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the US Dollar.
USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
---|---|---|---|---|---|---|---|---|
USD | -1.35% | -1.17% | -1.15% | -1.01% | -0.94% | -1.35% | -1.39% | |
EUR | 1.35% | 0.16% | 0.26% | 0.41% | 0.55% | 0.06% | -0.03% | |
GBP | 1.17% | -0.16% | -0.19% | 0.24% | 0.39% | -0.10% | -0.19% | |
JPY | 1.15% | -0.26% | 0.19% | 0.14% | 0.37% | -0.01% | -0.19% | |
CAD | 1.01% | -0.41% | -0.24% | -0.14% | 0.08% | -0.35% | -0.44% | |
AUD | 0.94% | -0.55% | -0.39% | -0.37% | -0.08% | -0.48% | -0.55% | |
NZD | 1.35% | -0.06% | 0.10% | 0.00% | 0.35% | 0.48% | -0.09% | |
CHF | 1.39% | 0.03% | 0.19% | 0.19% | 0.44% | 0.55% | 0.09% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

- New Zealand posted a record goods trade surplus with the US in April, led by a surge in agricultural exports.
- The US Dollar faces headwinds from Moody’s credit downgrade, high interest rates and growing deficit projections.
- Markets await progress on Trump’s “One Big Beautiful Bill” in the House as a potential USD catalyst.
The New Zealand Dollar (NZD) continues to strengthen against the US Dollar (USD) on Wednesday, with the release of a record trade surplus in April highlighting the largest monthly goods surplus on record with the United States (US).
Amid ongoing concerns about the rising costs of US imports and broader fiscal uncertainty, the positive trade figures from New Zealand have reinforced investor confidence in the Kiwi.
The data underscored the country’s export resilience, particularly in agricultural goods, which accounted for approximately 25% of the YoY increase. This robust performance has prompted traders to favor the NZD as an appealing alternative to the Greenback, offering relative stability and return potential in a time of elevated global uncertainty.
Meanwhile, the US Dollar remains weighed down by multiple headwinds: a recent Moody’s credit downgrade, elevated interest rates and mounting fiscal risks tied to President Donald Trump’s proposal to extend the 2017 tax cuts under his sweeping “One Big Beautiful Bill.” These proposed extensions are projected to widen the US federal deficit by over $3.8 trillion, further amplifying concerns over long-term debt sustainability.
NZD/USD is currently trading near multi-week highs, with technical momentum tilted in favor of further upside. However, near-term direction will likely hinge on developments in Washington, where President Trump is actively pressuring the House of Representatives to approve his bill before the Memorial Day recess. Progress or political roadblocks on this front could influence sentiment around the US Dollar and, in turn, the trajectory of NZD/USD.
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.
The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.
Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.
The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
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