Forex News
- USD/JPY attracts follow-through buying for the sixth straight day amid a broadly firmer USD.
- Rising geopolitical tensions and Fed rate hike bets lift the USD to its highest level since April 7.
- Economic concerns due to the Iran conflict counter intervention fears and undermine the JPY.
The USD/JPY pair scales higher for the sixth consecutive day – also marking the seventh day of a positive move in the previous eight – and climbs to a two-and-a-half-week high during the Asian session on Monday. Spot prices now look to build on the momentum above the 159.00 mark and remain well supported by a broadly firmer US Dollar (USD).
The USD Index (DXY), which tracks the Greenback against a basket of currencies, advances to its highest level since April 7 amid rising US-Iran tensions and hawkish US Federal Reserve (Fed) expectations. US President Donald Trump warned Iran that the “clock is ticking” and that there “won’t be anything left” if action is not taken soon, adding that “time is of the essence.” Adding to this, the Times of Israel reported on Saturday that Israel and the US are actively advancing military preparations to potentially resume coordinated attacks against Iran. This keeps geopolitical risks premium in play and continues to underpin the USD's reserve currency status.
Meanwhile, the US-Iran standoff, along with the effective closure of the critical Strait of Hormuz, pushes Crude Oil prices to a two-week high. This revives concerns that the war-driven surge in energy prices will fuel inflationary pressures and force the US Federal Reserve (Fed) to adopt a more hawkish stance. According to the CME Group's FedWatch Tool, traders are now pricing in over a 50% chance that the Fed will raise borrowing costs by the end of this year. The outlook remains supportive of elevated US Treasury bond yields, which turns out to be another factor supporting the Greenback and contributing to the bid tone surrounding the USD/JPY pair.
The Japanese Yen (JPY), on the other hand, is weighed down by concerns about economic risks stemming from the Middle East conflict. However, speculations that Japanese authorities might step in again to prop up the domestic currency might hold back the JPY bears from placing aggressive bets and act as a headwind for the USD/JPY pair. In the absence of any relevant market-moving economic releases, intervention fears warrant some caution before positioning for any further appreciating move.
Japanese Yen Price Last 7 Days
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies last 7 days. Japanese Yen was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 1.12% | 1.79% | 1.49% | 0.54% | 1.32% | 1.78% | 1.16% | |
| EUR | -1.12% | 0.65% | 0.42% | -0.59% | 0.19% | 0.65% | 0.03% | |
| GBP | -1.79% | -0.65% | -0.74% | -1.26% | -0.48% | -0.00% | -0.62% | |
| JPY | -1.49% | -0.42% | 0.74% | -0.99% | -0.18% | 0.28% | -0.29% | |
| CAD | -0.54% | 0.59% | 1.26% | 0.99% | 0.86% | 1.28% | 0.61% | |
| AUD | -1.32% | -0.19% | 0.48% | 0.18% | -0.86% | 0.46% | -0.15% | |
| NZD | -1.78% | -0.65% | 0.00% | -0.28% | -1.28% | -0.46% | -0.61% | |
| CHF | -1.16% | -0.03% | 0.62% | 0.29% | -0.61% | 0.15% | 0.61% |
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).
- EUR/JPY strengthens to around 184.80 in Monday’s early European session.
- Further consolidation cannot be ruled out as the cross remains under the Bollinger middle band, with neutral RSI momentum.
- The first support level to watch is 184.30; the immediate resistance level is located at 185.30.
The EUR/JPY cross gathers strength to near 184.80, snapping the four-day losing streak during the early European trading hours on Monday. A hawkish tone from the European Central Bank (ECB) provides some support to the Euro (EUR) against the Japanese Yen (JPY).
ECB Governing Council member Yannis Stournaras said over the weekend that a modest ECB interest-rate increase could temper inflation without causing economic damage. Meanwhile, Governing Council member Boris Vujcic stated on Friday that the decision on whether to increase interest rates in June will hinge on incoming information.
Traders will keep an eye on the preliminary reading of Japan’s Gross Domestic Product (GDP) for the first quarter (Q1), which is due later on Tuesday. The Japanese economy is estimated to grow by 0.4% in Q1, compared to 0.3% in the previous reading. Any signs of growth in Japan could help limit the JPY’s losses in the near term.
Technical Analysis:
In the daily chart, EUR/JPY is hovering just under the Bollinger middle band, leaving the short-term tone neutral to slightly capped while it holds beneath this reference level, with additional upside space toward the upper band. The 14-day Relative Strength Index at 47.75 sits near the midline, hinting at a lack of clear directional momentum after the recent pullback.
On the downside, initial support is seen at the 100-day simple moving average (SMA) at 184.30, with a more significant floor emerging near the May 7 low of 183.50 if selling pressure resumes. The next contention level to watch is the lower Bollinger band at 182.85.
On the topside, a daily close above the Bollinger middle band at 185.30 would ease immediate downside pressure and open the way toward the February 9 high of 186.24. The next hurdle emerges at the upper band resistance at 187.78.
(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.
- EUR/USD depreciates as the US Dollar rises on the Fed shifting toward a more aggressive inflation stance.
- Fed officials prioritized controlling inflation, suggesting further interest rate hikes remain necessary if price pressures persist.
- The Euro may rise due to hawkish European Central Bank policy expectations.
EUR/USD remains subdued for the sixth successive day, trading around 1.1620 during the Asian hours on Monday. The pair loses ground as the US Dollar (USD) rises on the US Federal Reserve (Fed) shifting toward a more aggressive policy stance on inflation.
Several Fed officials recently emphasized that controlling inflation is their top priority, even suggesting that further interest rate hikes could be necessary if price pressures persist. Financial markets have sharply increased the likelihood of a December rate hike to nearly 48%, up significantly from just 14% a week prior, according to the CME FedWatch tool.
The Greenback also receives support from increased safe-haven demand amid ongoing geopolitical conflicts. The United States (US) and Iran remain far from an agreement to end weeks of fighting and reopen the critical Strait of Hormuz shipping route.
US President Donald Trump escalated tensions by publicly warning Iran to make progress or face new consequences. Because the Strait remains effectively closed, global oil prices are continuing to climb, which places a heavy economic burden on countries that rely heavily on energy imports. Global investor anxiety is heightened further by warnings from Chinese leader Xi Jinping to President Trump that Taiwan could trigger direct clashes between their two economies.
However, the downside of the EUR/USD pair could be restrained as the Euro (EUR) may gain ground amid hawkish sentiment surrounding the European Central Bank (ECB) policy outlook.
ECB policymakers hinted at an interest rate hike to tame sticky inflation expectations. A Reuters poll suggested that the 85% of economists indicated that the central bank would raise its deposit rate by 25 basis points (bps) to 2.25% in June, up from just over half expecting that before the April meeting.
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.
- Gold rebounds after touching a fresh low since March 30 earlier this Monday.
- The USD stands firm amid geopolitical risks and might cap gains for the bullion.
- Inflation fears reaffirm Fed hike bets, warranting caution for the XAU/USD bulls.
Gold (XAU/USD) stages a modest recovery from the $4,480 region, or its lowest level since March 30, touched during the Asian session on Monday, though the upside potential seems limited. The US Dollar (USD) buying remains unabated in the wake of persistent geopolitical uncertainties. Furthermore, rising Crude Oil prices fuel inflationary concerns and bolster bets for a more hawkish US Federal Reserve (Fed), which lends additional support to the USD and contributes to keeping a lid on the non-yielding bullion.
In the latest developments surrounding the Middle East crisis, a drone strike caused a fire at the Barakah Nuclear Power Plant in the United Arab Emirates (UAE). Adding to this, Saudi Arabia said that it intercepted three drones launched from Iraq and also warned that it would take the necessary operational measures to respond to any attempt to violate its sovereignty and security. Furthermore, US President Donald Trump warned that Iran must get moving fast toward a deal or face severe consequences. In a post on Truth Social, Trump wrote that the “clock is ticking” and that there “won’t be anything left” if action is not taken soon, adding that “time is of the essence.”
This raises the risk of a further escalation of tensions in the Middle East and dampens hopes for a US-Iran agreement on the back of stalled peace talks, underpinning the USD's reserve currency status. Furthermore, the US blockade of Iranian ports and the effective closure of the Strait of Hormuz pushed crude oil prices to a two-week high, fueling expectations for an interest rate hike by the US central bank in 2026. According to the CME Group's FedWatch Tool, traders are currently pricing in over a 50% chance that the Fed will raise borrowing costs by the end of this year. The outlook remains supportive of elevated US Treasury bond yields, favoring the USD bulls and capping the Gold price.
The aforementioned fundamental backdrop suggests that the path of least resistance for the XAU/USD pair is to the downside. Hence, any further move up is more likely to get sold into and remain capped in the absence of any relevant market-moving macro data from the US on Monday. Moving ahead, the market focus remains glued to the FOMC Minutes on Wednesday, which will be looked for fresh clues about the central bank's policy outlook. Traders this week will also monitor the release of global flash PMIs. Moreover, the incoming geopolitical headlines might continue to inject volatility into financial markets, which, in turn, will drive the USD demand and influence the Gold price.
Meanwhile, discounts in India jumped to a record last week, while strong investment demand for physical bullion keeps Chinese premiums firm over global benchmark prices. This, however, might do little to act as a floor for Gold prices as rising Iran tensions, inflationary concerns, and hawkish Fed bets might continue to support the USD.
XAU/USD daily chart
Gold shows resilience below $4,500; not out of the woods yet amid bearish setup
Against the backdrop of last week's failure near the 100-day Simple Moving Average (SMA) hurdle, acceptance below the $4,500 psychological mark will suggest that the broader downtrend is gaining momentum. Moreover, the Relative Strength Index (RSI) is near 40, and a negative Moving Average Convergence Divergence (MACD) reading both hint at subdued buying interest. This validates the near-term bearish bias for the Gold price.
Meanwhile, immediate focus stays on the broader support area anchored by the 200-day SMA at $4,352.59, as a sustained break beneath this zone would likely expose gold to deeper corrective losses in the sessions ahead. On the topside, the 100-day SMA at $4,790.55 is the first meaningful resistance that bulls would need to reclaim to ease the current downside pressure.
(The technical analysis of this story was written with the help of an AI tool.)
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Bank of England (BoE) Deputy Governor Sarah Breeden warned that political uncertainty is hitting the business environment and cautioned that the UK central bank should not be "trigger happy" when adjusting interest rates, the Financial Times reported on Monday.
Key quotes
Political uncertainty is hitting the business environment.
BoE should avoid being ‘trigger happy’ on rates.
Market reaction
At the time of writing, the West Texas Intermediate (WTI) is down 0.08% on the day at 1.3315.
BoE FAQs
The Bank of England (BoE) decides monetary policy for the United Kingdom. Its primary goal is to achieve ‘price stability’, or a steady inflation rate of 2%. Its tool for achieving this is via the adjustment of base lending rates. The BoE sets the rate at which it lends to commercial banks and banks lend to each other, determining the level of interest rates in the economy overall. This also impacts the value of the Pound Sterling (GBP).
When inflation is above the Bank of England’s target it responds by raising interest rates, making it more expensive for people and businesses to access credit. This is positive for the Pound Sterling because higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls below target, it is a sign economic growth is slowing, and the BoE will consider lowering interest rates to cheapen credit in the hope businesses will borrow to invest in growth-generating projects – a negative for the Pound Sterling.
In extreme situations, the Bank of England can enact a policy called Quantitative Easing (QE). QE is the process by which the BoE substantially increases the flow of credit in a stuck financial system. QE is a last resort policy when lowering interest rates will not achieve the necessary result. The process of QE involves the BoE printing money to buy assets – usually government or AAA-rated corporate bonds – from banks and other financial institutions. QE usually results in a weaker Pound Sterling.
Quantitative tightening (QT) is the reverse of QE, enacted when the economy is strengthening and inflation starts rising. Whilst in QE the Bank of England (BoE) purchases government and corporate bonds from financial institutions to encourage them to lend; in QT, the BoE stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive for the Pound Sterling.
Gold prices remained broadly unchanged in India on Monday, according to data compiled by FXStreet.
The price for Gold stood at 14,087.38 Indian Rupees (INR) per gram, broadly stable compared with the INR 14,087.50 it cost on Friday.
The price for Gold was broadly steady at INR 164,312.50 per tola from INR 164,313.90 per tola on Friday.
Unit measure | Gold Price in INR |
|---|---|
1 Gram | 14,087.38 |
10 Grams | 140,875.80 |
Tola | 164,312.50 |
Troy Ounce | 438,165.40 |
FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
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.
(An automation tool was used in creating this post.)
- USD/CHF trades flat around 0.7870 in Monday’s early European session.
- Markets now see the next Fed interest rate move.
- Trump threatened Iran to “get moving” or there “won’t be anything left of them.”
The USD/CHF pair holds steady near 0.7870 during the early European session on Monday. The pair currently trades near the highest since April 30, bolstered by a stronger US Dollar (USD). Traders will closely monitor the developments surrounding the US-Iran conflicts.
Hotter-than-expected US inflation reports released last week have led the market to price in potential US Federal Reserve (Fed) interest rate hikes later this year, supporting the Greenback. According to the CME FedWatch tool, financial markets are now pricing in nearly a 48.4% chance the Fed could hike rates by at least 25 basis points (bps) at its December meeting, compared with 14.3% a week ago.
US President Donald Trump on Sunday warned Iran that the "clock is ticking" as talks to bring the war to an end have stalled. Meanwhile, Iranian media reported the US had failed to make any concrete concessions in its response to Tehran's latest proposals to end the conflict.
A lack of compromise from Washington and signs of a prolonged conflict could lift the USD against the Swiss Franc (CHF) in the near term. RBC Capital Markets analysts noted that the USD is better shielded from global energy shocks than the CHF because the US operates as a net oil exporter.
Swiss Franc FAQs
The Swiss Franc (CHF) is Switzerland’s official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country’s economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc’s value, causing a turmoil in markets. Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone.
The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country’s currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in.
The Swiss National Bank (SNB) meets four times a year – once every quarter, less than other major central banks – to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.
Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc’s (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank’s currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate.
As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland’s main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.
- AUD/JPY may rebound toward the nine-day EMA of 113.72.
- The 14-day Relative Strength Index near 50 hints at a current lack of directional conviction.
- A break below the triangle would expose the 50-day EMA support at 112.44.
AUD/JPY extends its losses for the third successive day, trading around 113.20 during the Asian hours on Monday. The technical analysis of the daily chart suggests a potential busted pattern or bearish failure as the currency cross is positioned on the lower trendline of an ascending triangle. A sustained break below the lower trendline would indicate that buyers have lost momentum and sellers have taken control.
The AUD/JPY cross holds a mildly bullish near-term bias as it remains above the 50-day Exponential Moving Average (EMA). The pair is consolidating after its recent pullback, with price now caught between short-term resistance at the nine-day EMA and underlying trend support from the longer EMA, while the 14-day Relative Strength Index (RSI) at roughly 50 signals neutral momentum and hints at a lack of directional conviction for now.
On the upside, the AUD/JPY cross may rebound toward the nine-day EMA of 113.72. A break above the short-term average would support the currency cross to test the all-time high of 114.74, aligned with the upper boundary of the ascending triangle around 115.00.
A successful break below the triangle would expose the 50-day EMA at 112.44. Further declines would put downward pressure on the AUD/JPY cross to navigate the region around the three-month low at 108.79, recorded on March 31.
(The technical analysis of this story was written with the help of an AI tool.)
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.02% | 0.08% | 0.10% | 0.00% | 0.22% | -0.00% | -0.02% | |
| EUR | -0.02% | 0.04% | 0.09% | -0.02% | 0.20% | -0.02% | -0.05% | |
| GBP | -0.08% | -0.04% | 0.02% | -0.07% | 0.14% | -0.07% | -0.09% | |
| JPY | -0.10% | -0.09% | -0.02% | -0.14% | 0.10% | -0.15% | -0.15% | |
| CAD | -0.01% | 0.02% | 0.07% | 0.14% | 0.22% | 0.00% | -0.01% | |
| AUD | -0.22% | -0.20% | -0.14% | -0.10% | -0.22% | -0.20% | -0.20% | |
| NZD | 0.00% | 0.02% | 0.07% | 0.15% | -0.00% | 0.20% | -0.01% | |
| CHF | 0.02% | 0.05% | 0.09% | 0.15% | 0.01% | 0.20% | 0.01% |
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 Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
According to the China National Bureau of Statistics's (NBS) statistician, the economy is facing external challenges, but internal driving forces remain unchanged and solid.
Additional remarks
Stability of economy as defining feature remains unchanged.
Economy has developed a stronger material, technological foundation.
Digital economy, ai driving economy and have strong spillover effects.
Room for counter-cyclical, cross-cyclical adjustments in policy toolbox.
Should make full use of macro-economic policies going forward.
On producer price increase, China’s NBS said that fluctuations in international oil prices had an impact.
These comments came from China's NBS after key data releases, such as Retail Sales, Industrial Production, Fixed Asset Investment, and the House Price Index for April.
Market reaction
No major response by the Australian Dollar (AUD) after these comments. As of writing, AUD/USD is down 0.36% to near 0.7120 due to risk-off market sentiment.
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.
- Australian Dollar holds losses as China’s Retail Sales rose 0.2% YoY in April, against 2.0% expected and 1.7% prior.
- Fed officials prioritized controlling inflation, suggesting further interest rate hikes remain necessary if price pressures persist.
- The US Dollar finds safe-haven support as the US and Iran remain far from an agreement.
AUD/USD loses ground for the third consecutive day, trading around 0.7130 during the Asian hours on Monday. The pair depreciates following key economic data from Australia’s close trading partner, China.
China’s Retail Sales rose 0.2% year-over-year (YoY) in April vs. 2.0% expected and 1.7% in March. Chinese Industrial Production climbed 4.1% YoY in the same period, compared to the 5.9% forecast and 5.7% seen previously. Meanwhile, the Fixed Asset Investment came in at -1.6% year-to-date (YTD) YoY in April, weaker than the expected increase of 1.6%. The March reading was a rise of 1.7%.
The AUD/USD pair also loses ground as the US Dollar (USD) rises on the US Federal Reserve (Fed) shifting toward a more aggressive policy stance on inflation. Several Fed officials recently emphasized that controlling inflation is their top priority, even suggesting that further interest rate hikes could be necessary if price pressures persist. Financial markets have sharply increased the likelihood of a December rate hike to nearly 48%, up significantly from just 14% a week prior, according to the CME FedWatch tool.
Meanwhile, the Greenback is receiving support from increased safe-haven demand amid ongoing geopolitical conflicts. The United States (US) and Iran remain far from an agreement to end weeks of fighting and reopen the critical Strait of Hormuz shipping route.
US President Donald Trump escalated tensions by publicly warning Iran to make progress or face new consequences. Because the Strait remains effectively closed, global oil prices are continuing to climb, which places a heavy economic burden on countries that rely heavily on energy imports. Global investor anxiety is heightened further by warnings from Chinese leader Xi Jinping to President Trump that Taiwan could trigger direct clashes between their two economies.
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.
Forex Market News
Our dedicated focus on forex news and insights empowers you to capitalise on investment opportunities in the dynamic FX market. The forex landscape is ever-evolving, characterised by continuous exchange rate fluctuations shaped by vast influential factors. From economic data releases to geopolitical developments, these events can sway market sentiment and drive substantial movements in currency valuations.
At Rakuten Securities Hong Kong, we prioritise delivering timely and accurate forex news updates sourced from reputable platforms like FXStreet. This ensures you stay informed about crucial market developments, enabling informed decision-making and proactive strategy adjustments. Whether you’re monitoring forex forecasts, analysing trading perspectives, or seeking to capitalise on emerging trends, our comprehensive approach equips you with the insights needed to navigate the FX market effectively.
Stay ahead with our comprehensive forex news coverage, designed to keep you informed and prepared to seize profitable opportunities in the dynamic world of forex trading.
