Forex News
Joachim Nagel, President of the Bundesbank and member of the European Central Bank (ECB), told Handelsblatt on Tuesday that ECB rate hikes are becoming increasingly likely with the high inflation that is ahead of them.
Key takeaways:
We still have quite a bit of inflation ahead of us.
No longer in baseline scenario, moving to adverse one.
ECB rate hikes are becoming increasingly likely."
ECB FAQs
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger 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.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
Kunal Kundu of Societe Generale argues that India’s Goods and Services Tax (GST) data and Index of Industrial Production (IIP) figures point to a soft consumption backbone. Post-September 2025 GST rate cuts have not produced a broad-based demand uplift, with gains concentrated in motor vehicles and select categories. IIP shows consumer durables outperforming flat non-durables, suggesting everyday consumption remains subdued.
IIP signals uneven household demand trends
"Apart from motor vehicle demand, the economy-wide demand impulse has not yet been strong enough to lift net domestic GST materially once refunds are stripped out. This is consistent with the idea that demand response has been narrow, concentrated in a few rate-cut beneficiaries, rather than broad-based across the consumption basket that typically drives domestic GST buoyancy."
"That’s where usefulness of the IIP data lies, not because IIP is perfect, but because it offers an independent check on whether household demand is strengthening broadly or only in select channels."
"The use-based IIP classification continues to show an uneven consumer picture, with consumer durables (demand that is more skewed toward middle and upper income households) holding up better than consumer non-durables."
"During FY26, while consumer goods production rose 2.45% yoy, it was primarily led by consumer durable goods production, while production of consumer non-durable goods remained flat. indicating unchanged production in the category that typically tracks everyday consumption."
"The point is not that non-durables are collapsing, but that the broad consumption backbone still looks soft. To us, this is hardly the environment in which a demand-led GST upswing usually takes root."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Austan Goolsbee, President of the Federal Reserve (Fed) Bank of Chicago, said that without central bank independence, inflation will come roaring back at the Greater Rockford Chamber of Commerce in Rockford, Illinois on Tuesday.
Key takeaways:
Don't think Fed independence is going away.
Without central bank independence, inflation will come roaring back.
CPI report tells us 'not much that's good.'
Inflation is going the wrong way not just in oil-related and tariff-related things.
Drift upward in services inflation is a worry.
Today's unexpected disappointment was seeing services inflation going up.
Labor market stable, but not good.
Interconnection of private credit with conventional institutions are not as big as connections in 2007-2009 financial crisis.”
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.39% | 0.58% | 0.24% | 0.20% | 0.22% | 0.23% | 0.39% | |
| EUR | -0.39% | 0.19% | -0.13% | -0.21% | -0.17% | -0.18% | 0.00% | |
| GBP | -0.58% | -0.19% | -0.34% | -0.41% | -0.36% | -0.37% | -0.19% | |
| JPY | -0.24% | 0.13% | 0.34% | -0.07% | -0.05% | -0.04% | 0.12% | |
| CAD | -0.20% | 0.21% | 0.41% | 0.07% | 0.02% | 0.03% | 0.19% | |
| AUD | -0.22% | 0.17% | 0.36% | 0.05% | -0.02% | 0.00% | 0.16% | |
| NZD | -0.23% | 0.18% | 0.37% | 0.04% | -0.03% | -0.00% | 0.16% | |
| CHF | -0.39% | -0.01% | 0.19% | -0.12% | -0.19% | -0.16% | -0.16% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
- The US Dollar Index reached a five-day high as hotter-than-expected US inflation data boosted hawkish Fed expectations.
- Ongoing uncertainty surrounding US-Iran peace negotiations supports safe-haven demand for the Greenback.
- Technically, the DXY retains a modest bearish bias while trading beneath the 50-day, 100-day and 200-day SMAs.
The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, climbs to a five-day high on Tuesday as stronger-than-expected US inflation data bolsters the hawkish Federal Reserve (Fed) outlook. At the time of writing, the DXY is trading around 98.38, up roughly 0.45% on the day.
Meanwhile, ongoing uncertainty surrounding US-Iran peace negotiations and growing doubts over the durability of the current ceasefire support safe-haven demand for the Greenback.
US consumer inflation accelerated in April, largely driven by higher energy prices amid supply disruptions around the Strait of Hormuz. Data released by the Bureau of Labor Statistics showed the headline Consumer Price Index (CPI) rose 0.6% MoM in April after increasing 0.9% in March, matching market expectations, while annual inflation accelerated to 3.8% from 3.3% previously, above forecasts of 3.7%.
Meanwhile, core CPI, which excludes volatile food and energy prices, rose 0.4% MoM, up from 0.2% in March and above expectations of 0.3%. On an annual basis, core inflation climbed to 2.8% from 2.6%, also exceeding forecasts of 2.7%.
Following the release, US Treasury yields moved sharply higher as traders scaled back expectations for near-term Fed rate cuts. According to the CME FedWatch Tool, the probability of a rate hike at the September meeting currently stands near 20%, rising to around 40% for the December meeting.
Looking ahead, traders will continue to closely monitor developments surrounding the US-Iran negotiations, while attention also turns to upcoming US economic data, including the Producer Price Index (PPI) report due on Wednesday and Retail Sales data scheduled for release on Thursday.
Technical Analysis:
In the daily chart, Dollar Index Spot trades at 98.39, holding below a tight band of key moving averages and keeping a modest bearish bias intact. The 100-day Simple Moving Average (SMA) at 98.46, the 200-day SMA at 98.53 and the 50-day SMA at 99.00 all sit overhead, suggesting rallies are likely to encounter supply near this cluster. Momentum remains subdued, with the Relative Strength Index (14) hovering just below the midline and the Moving Average Convergence Divergence (MACD) fractionally negative, hinting at a waning but still fragile recovery tone.
On the topside, initial resistance is seen at the 100-day SMA near 98.46, followed by the 200-day SMA around 98.53, while a stronger barrier emerges at the 50-day SMA at 99. On the downside, the next notable cushion is the horizontal support level at 97.83, where buyers previously emerged, and a break below this floor would reinforce the broader bearish narrative.
(The technical analysis of this story was written with the help of an AI tool.)
Inflation FAQs
Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
Commerzbank’s Barbara Lambrecht and colleagues note Brent has jumped as Iran–US tensions escalate and US policy debates gasoline tax relief. China’s crude Oil imports fell sharply in April, with further declines expected as shipments from Saudi Arabia and Iran drop. Beijing is drawing on reserves, maintaining refinery quotas, and curbing product exports to stabilise domestic supply, leaving a mixed picture across Oil and other energy imports.
Iran conflict and Chinese flows
"The price of Brent crude responded to the developments with a USD 7 increase since yesterday to USD 107 per barrel for now. The fact that the US government is considering suspending the gasoline tax shows that it, too, does not necessarily seem to believe in a quick agreement."
"The decline is likely only the beginning, as further drops in shipments from Saudi Arabia are on the horizon. According to traders, shipments in May halved compared to April, dropping to 20 million tons, and a further decline to 13 to 14 million tons is expected for June."
"Although crude oil processing figures for April are not yet available, all signs point to China having drawn on its crude oil reserves — built up over many years — for the first time in a long while. The National Development and Reform Commission has instructed refineries to maintain their 2025 production quotas regardless of costs."
"To ensure the supply situation, the Chinese government additionally imposed an export ban on diesel and gasoline. As a result, exports of oil products fell significantly in April by one-third compared to the previous month to 3.12 million tons, the lowest monthly level in more than nine years."
"According to the data provider Oilchem, China’s commercial diesel stocks are at their highest level since the summer of 2024."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- WTI rallies more than 3% as stalled US-Iran talks and Hormuz disruption fears keep supply concerns elevated.
- EIA warns that a prolonged closure of the Strait of Hormuz could push crude Oil prices another $20 higher.
- Technically, WTI maintains a bullish structure above key SMAs, though trend momentum remains moderate.
West Texas Intermediate (WTI) crude Oil rallies more than 3% on Tuesday as fading hopes for a near-term end to the US-Iran war continue to fuel concerns over supply disruptions through the Strait of Hormuz. At the time of writing, WTI is trading around $98.38 per barrel, holding above the middle of its war-driven trading range.
The US Energy Information Administration (EIA) said in its latest STEO report that global Oil trade and output may not return to pre-war levels until late 2026 or early 2027. The agency assumes the Strait of Hormuz will remain closed through late May before gradually reopening in June and normalizing later in 2026. The EIA also warned that if the strait stays shut through late June, crude Oil prices could rise another $20 per barrel above current forecasts.
Meanwhile, a Reuters survey published on Monday showed OPEC Oil output in April fell to its lowest level in more than two decades.
US-Iran negotiations remain deadlocked over Tehran’s nuclear program and control of the Strait of Hormuz, with US President Donald Trump warning that the ceasefire is “on massive life support."
Reuters reported on Tuesday that Iran has expanded its definition of the Strait of Hormuz into a “vast operational area” significantly wider than before the Iran war, according to a senior officer in the Islamic Revolutionary Guard Corps (IRGC) Navy. Fars and Tasnim reported that the strait’s operational width has expanded to between 200 and 300 miles from an earlier estimate of 20-30 miles.
The move has intensified fears that Iran is attempting to tighten its grip over the strategic chokepoint, which handles roughly 20% of global Oil shipments, increasing the risk of prolonged supply disruptions. This continues to keep a strong geopolitical risk premium in Oil markets, with WTI up more than 40% since the start of the Middle East war.
Technical Analysis:
On the daily chart, WTI US Oil keeps a constructive bullish bias as it holds well above the 50-day Simple Moving Average (SMA) and comfortably over the longer-term 100-day and 200-day SMAs at roughly $77 and $69.
The relative strength index (RSI) around 54 suggests moderate, non-overbought upside momentum, while the subdued Average Directional Index (ADX) near 18 hints that the recent advance is unfolding within a relatively weak directional trend despite volatility staying elevated per the Average True Range (ATR).
On the downside, immediate technical cushioning emerges from the 50-day SMA at $93, with additional demand expected around the prior horizontal support zone near $85.00, before deeper medium-term floors at the 100-day SMA at $77.37 and the 200-day SMA at $69.14 come into play.
As long as WTI holds above these stacked moving-average supports, pullbacks are likely to be treated as corrective pauses within the broader upswing rather than a decisive trend reversal.
(The technical analysis of this story was written with the help of an AI tool.)
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.
TD Securities’ FX team, led by Jayati Bharadwaj and colleagues, keeps a neutral short-term stance on the US Dollar (USD) following the April United States (US) Consumer Price Index (CPI) release. They argue that reopening the Strait of Hormuz would weaken the USD, but strong US labor data and equity outperformance limit downside. They also see limited upside unless US inflation re-accelerates or global demand weakens.
Dollar seen capped in both directions
"We remain neutral on the USD short-term; while reopening the Strait of Hormuz will weaken the USD, recent resilient US labor market data and equity outperformance raises the threshold for a major selloff beyond that."
"On the other hand, significant USD gains remain unlikely unless US inflation spikes or rest of the world shows signs of demand destruction."
"Market reaction to CPI is relatively muted due to soft core goods inflation and limited tariff passthrough."
"Markets are focusing on central bank responses to inflation, not future growth impacts from the current conflict."
"If core inflation doesn't worsen going forward, the current global energy shock should prompt only moderate rate changes for some banks with negative real rates like the ECB."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- The New Zealand Dollar weakens as stronger-than-expected US inflation data reinforces expectations of a restrictive Fed policy.
- US inflation accelerated to 3.8% YoY in April, above market expectations.
- Investors now focus on the Reserve Bank of New Zealand inflation expectations report due on Wednesday.
NZD/USD trades around 0.5940 on Tuesday at the time of writing, down 0.41% on the day, pressured by stronger-than-expected inflation data from the United States (US). The rebound in the US Dollar (USD) is weighing on the pair as markets scale back expectations for Federal Reserve (Fed) monetary easing.
The Bureau of Labor Statistics (BLS) reported that inflation, as measured by the Consumer Price Index (CPI), accelerated to 3.8% YoY in April from 3.3% previously, above market expectations of 3.7%. On a monthly basis, the CPI rose 0.6%, in line with forecasts. Core inflation, which excludes volatile food and energy prices, increased to 2.8% YoY from 2.6% previously, also exceeding the 2.7% consensus.
The report also noted that energy prices rose 3.8% in April, accounting for more than 40% of the monthly increase in the overall index. Shelter and food costs also continued to rise, reinforcing concerns about persistent inflationary pressures in the United States.
Meanwhile, weekly ADP data showed that US private employers added an average of 33K jobs per week over the four weeks ending April 25, signaling a modest improvement in labor market momentum.
Following the release, the US Dollar Index (DXY) advanced toward 98.40, while US Treasury yields also moved higher. Investors now assess that the Fed may need to keep interest rates elevated for longer in order to contain inflationary pressures. According to the CME FedWatch tool, the chance of a rate hike by the December meeting increased to 30.3% after the CPI release, up from 21.5% the previous day.
The US Dollar is also benefiting from safe-haven demand. Geopolitical tensions in the Middle East remain elevated after US President Donald Trump stated that the US-Iran ceasefire was “on massive life support,” reviving concerns over a possible resumption of military operations.
On the New Zealand side, expectations that the Reserve Bank of New Zealand (RBNZ) may maintain a cautious stance or even consider further tightening to bring inflation back toward the 2% midpoint could help limit NZD/USD losses. Markets are now awaiting the RBNZ’s Q2 inflation expectations report, scheduled for release on Wednesday.
New Zealand Dollar Price Today
The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies today. New Zealand Dollar was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.44% | 0.63% | 0.30% | 0.25% | 0.41% | 0.36% | 0.48% | |
| EUR | -0.44% | 0.18% | -0.11% | -0.22% | -0.04% | -0.10% | 0.06% | |
| GBP | -0.63% | -0.18% | -0.32% | -0.39% | -0.23% | -0.28% | -0.13% | |
| JPY | -0.30% | 0.11% | 0.32% | -0.08% | 0.09% | 0.04% | 0.17% | |
| CAD | -0.25% | 0.22% | 0.39% | 0.08% | 0.16% | 0.12% | 0.25% | |
| AUD | -0.41% | 0.04% | 0.23% | -0.09% | -0.16% | -0.04% | 0.08% | |
| NZD | -0.36% | 0.10% | 0.28% | -0.04% | -0.12% | 0.04% | 0.13% | |
| CHF | -0.48% | -0.06% | 0.13% | -0.17% | -0.25% | -0.08% | -0.13% |
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 New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).
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