Forex News
Neel Kashkari, President of the Federal Reserve (Fed) Bank of Minneapolis, spoke at a St. Paul Area Chamber event in St. Paul, Minneapolis, on Wednesday. He said that the big question is how long the Strait of Hormuz will be closed and what effect will it have on inflation.
Key takeaways:
Inflation too high.
A huge question mark about how long Hormuz Strait will be closed, that will have a big effect on inflation.
Need to get back to 2% inflation, should not move the goalpost.
Inflationary shocks don't let the Fed off the hook, but have made the job challenging on inflation.
Before Iran conflict, had some confidence inflation was heading back down to 2%.
Labor market moving sideways, 'lukewarm'.
Iran shock has upended inflation environment.
Labor market looks like it's hanging in there.
Not sure Fed's policy rate decisions will have much effect on mortgage rates.”
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 New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.29% | 0.19% | 0.21% | 0.09% | -0.23% | 0.34% | 0.26% | |
| EUR | -0.29% | -0.10% | -0.11% | -0.23% | -0.53% | 0.04% | -0.06% | |
| GBP | -0.19% | 0.10% | 0.00% | -0.11% | -0.41% | 0.17% | 0.04% | |
| JPY | -0.21% | 0.11% | 0.00% | -0.10% | -0.43% | 0.12% | 0.06% | |
| CAD | -0.09% | 0.23% | 0.11% | 0.10% | -0.33% | 0.25% | 0.14% | |
| AUD | 0.23% | 0.53% | 0.41% | 0.43% | 0.33% | 0.57% | 0.47% | |
| NZD | -0.34% | -0.04% | -0.17% | -0.12% | -0.25% | -0.57% | -0.11% | |
| CHF | -0.26% | 0.06% | -0.04% | -0.06% | -0.14% | -0.47% | 0.11% |
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).
- USD/JPY extends gains for a third straight day as hotter US inflation data boosts Fed rate hike expectations and supports the US Dollar.
- Rising Oil prices linked to the Middle East war continue to pressure the Japanese Yen given Japan’s heavy dependence on imported energy.
- Technically, USD/JPY holds above key moving averages while momentum indicators suggest the recent intervention-driven sell-off may be stabilizing.
USD/JPY trades with a mild upside bias on Wednesday as the Japanese Yen (JPY) remains under pressure from a stronger US Dollar (USD) and rising Oil prices linked to the Middle East war, given Japan’s heavy reliance on imported energy.
At the time of writing, USD/JPY is trading around 157.87, up for a third consecutive day. The US Dollar is drawing support from hotter-than-expected US inflation data, which boosted expectations that the Federal Reserve (Fed) could raise interest rates by year-end, while persistent uncertainty surrounding US-Iran negotiations to end the war is driving safe-haven flows into the Greenback.
The US Dollar Index (DXY), which tracks the USD against a basket of six major currencies, is trading around 98.50, its highest level in more than a week.
From a technical perspective, buyers are gradually returning after the recent suspected intervention-driven sell-off triggered near the 160.00 psychological level.
USD/JPY trades at 157.85, holding a constructive bias as it remains above the 100-day Simple Moving Average (SMA) at roughly 157.40 and the 200-day SMA near 154.47.
The Relative Strength Index (RSI) on the daily chart has rebounded toward 48 after recently dipping toward oversold territory, suggesting bearish momentum is easing but still lacking strong bullish conviction.
Meanwhile, the Moving Average Convergence Divergence (MACD) remains in negative territory, though the histogram is beginning to stabilize and the MACD line is attempting to turn higher, indicating downside pressure may be fading after the recent sell-off.
On the topside, initial resistance emerges at 158.00, where a horizontal barrier caps immediate advances, ahead of a more significant ceiling near 160.73 that guards the recent highs.
On the downside, the 100-day SMA at 157.40 offers the first layer of support, with the 200-day SMA around 154.47 providing a deeper structural floor if selling pressure extends.
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.
- The US Dollar remains supported after a sharp acceleration in US producer inflation.
- US Treasury yields rise as markets push back expectations for Federal Reserve easing.
- Elevated Oil prices continue to limit Canadian Dollar losses and support the Loonie.
USD/CAD trades without a clear direction on Wednesday, hovering around 1.3700 at the time of writing, as investors balance persistent US Dollar (USD) strength against support for the Canadian Dollar (CAD) from elevated Oil prices. The pair remains close to its four-week highs, supported by rising US yields and a reassessment of Federal Reserve (Fed) policy expectations.
Inflation concerns continue to dominate financial markets. Geopolitical tensions in the Middle East and stalled negotiations between the United States (US) and Iran are keeping Oil prices elevated, fueling fears of more persistent global inflation. This backdrop is prompting major central banks to maintain restrictive monetary policy for longer than previously expected.
In the United States, the Producer Price Index (PPI) accelerated to 6% YoY in April from 4.3% previously, reaching its highest level in four years and beating market expectations by a wide margin. The core PPI, which excludes volatile components, rose 5.2% YoY after 4% in March. These figures follow Tuesday’s Consumer Price Index (CPI) release, which had already shown stronger-than-expected consumer inflation.
The Bond market reaction was immediate. The US 10-year Treasury yield climbed toward 4.49%, supporting the US Dollar. The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, also advances toward 98.50.
Against this backdrop, money markets have significantly reduced expectations for Fed rate cuts. Investors now expect monetary policy to remain unchanged for an extended period, while some traders are even starting to price in the risk of another rate hike before year-end.
The Canadian Dollar (CAD), however, remains supported by firm Oil prices, as Oil is Canada’s main export. West Texas Intermediate (WTI) crude remains close to $98 per barrel, supporting Canada’s trade revenues and limiting further upside in USD/CAD.
Investors are also monitoring the release of the Bank of Canada (BoC) meeting minutes. Strategists at TD Securities believe markets will look for more details on geopolitical risks, the impact of higher Oil prices, and potential divisions within the Governing Council regarding future rate cuts or hikes.
Meanwhile, Scotiabank analysts believe the Canadian Dollar remains undervalued relative to their fair value estimate near 1.3510. However, the bank notes that widening short-term rate spreads in favor of the United States continue to provide near-term support for the US Dollar.
Canadian Dollar Price Today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the Euro.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.25% | 0.16% | 0.14% | 0.05% | -0.29% | 0.25% | 0.24% | |
| EUR | -0.25% | -0.09% | -0.13% | -0.22% | -0.56% | 0.01% | -0.03% | |
| GBP | -0.16% | 0.09% | -0.02% | -0.12% | -0.46% | 0.12% | 0.05% | |
| JPY | -0.14% | 0.13% | 0.02% | -0.09% | -0.44% | 0.09% | 0.09% | |
| CAD | -0.05% | 0.22% | 0.12% | 0.09% | -0.35% | 0.21% | 0.17% | |
| AUD | 0.29% | 0.56% | 0.46% | 0.44% | 0.35% | 0.57% | 0.53% | |
| NZD | -0.25% | -0.01% | -0.12% | -0.09% | -0.21% | -0.57% | -0.05% | |
| CHF | -0.24% | 0.03% | -0.05% | -0.09% | -0.17% | -0.53% | 0.05% |
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 Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).
- WTI trades with minor losses below the $100 mark as investors monitor stalled US-Iran negotiations and developments around the Strait of Hormuz.
- OPEC flags tighter Oil supplies after OPEC+ output fell by 1.74 million bpd in April amid Middle East disruptions.
- US crude inventories posted a larger-than-expected draw, while rising US inflation highlighted the impact of higher energy prices.
West Texas Intermediate (WTI) crude Oil fluctuates with minor losses on Wednesday, though prices remain supported by fears that disruptions through the Strait of Hormuz may persist longer than expected as US-Iran negotiations remain at an impasse. At the time of writing, WTI is trading around $97.80 per barrel, down nearly 0.85% on the day.
The subdued price action reflects cautious sentiment as traders await further developments in the US-Iran peace talks, particularly over the reopening of the Strait of Hormuz. Although tensions in the waterway remain elevated, the absence of major new developments is keeping WTI capped below the $100 mark for now.
OPEC’s latest Monthly Oil Market Report pointed to tighter Oil supplies due to supply disruptions in the Middle East. The organization said OPEC+ crude output averaged 33.19 million barrels per day (bpd) in April 2026, down 1.74 million bpd from March, as the Iran war prompted several Middle Eastern producers to cut output.
On the demand side, OPEC said global Oil demand is expected to grow by 1.2 million bpd in 2026, while 2027 demand growth was revised higher to 1.5 million bpd from the previous estimate of 1.3 million bpd.
The ongoing energy shock continues to fuel price pressures globally, with the latest US data showing the Consumer Price Index (CPI) accelerating to 3.8% YoY in April from 3.3% in March, marking the highest reading since May 2023. Producer Price Index (PPI) rose 6% YoY from 4.3% previously, above market expectations of 4.9%.
Meanwhile, the latest data from the US Energy Information Administration (EIA) revealed US crude oil inventories fell by 4.306 million barrels in the week ending May 8, well above market expectations for a 2.1 million-barrel draw and following a 2.314 million-barrel decline in the previous week.
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.
"Maximum employment" on the chopping block
The House Financial Services Committee (HFSC), chaired by Representative French Hill (R-AR), is the lower chamber's primary oversight body for banking, capital markets, housing finance, and monetary policy. It is now taking up H.R. 5396, the Price Stability Act of 2025, introduced by Hill in September 2025 with co-sponsors Byron Donalds (R-FL) and Marlin Stutzman (R-IN). The bill has already been the subject of a committee hearing titled "Less Mandates. More Independence," held by its Task Force on Monetary Policy, Treasury Market Resilience, and Economic Prosperity, and now sits with the full committee for further consideration.
The edit itself is surgical: H.R. 5396 would amend Section 2A of the Federal Reserve Act by striking "maximum employment, stable prices," and inserting "stable prices", removing the employment leg of what has been the Fed's dual mandate since the 1977 Federal Reserve Reform Act. The Federal Open Market Committee (FOMC) is currently required to balance maximum employment with stable prices, and supporters argue a single inflation focus would improve accountability, anchor expectations, and bring the US into line with single-mandate central banks like the European Central Bank (ECB) and the Bank of England (BoE).
Critics counter that stripping the employment mandate while payroll growth has effectively flatlined over the past 12 months and underemployment is creeping higher would remove the Fed's legal authority to act on a softening labor market. With Wednesday's Producer Price Index (PPI) for April surging to 6% YoY, the timing of the bill's revival has put the dual mandate debate squarely back on traders' radar.
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
- US Producer Price Index for April surged to 6% YoY, the biggest jump since December 2022 and well above the 4.9% consensus.
- Boston Fed President Susan Collins has aligned with FOMC dissenters and openly floated a rate hike scenario.
- Senate confirmation vote on Kevin Warsh as next Fed Chair scheduled for around 18:00 GMT, two days before Powell's chair term ends.
- President Trump landed in Beijing for the Xi summit, but markets are fading hopes for a breakthrough as the Iran war hands China more leverage.
Dow Jones Industrial Average (DJIA) futures slipped onto the back foot through European and early US hours on Wednesday, struggling to hold above 49,500 after fading from overnight highs near 49,800. The S&P 500 and Nasdaq Composite are also nursing losses, with risk sentiment souring on a blistering wholesale inflation print and a hawkish chorus from Federal Reserve (Fed) officials. Add in a high-profile Senate vote to install Kevin Warsh atop the Federal Reserve (Fed) and President Trump's arrival in Beijing for a high-stakes summit, and traders have plenty of reasons to keep risk dialled down.
Hot PPI deepens the pipeline inflation story
The April Producer Price Index (PPI) jolted markets, with headline prices rising 1.4% MoM, nearly triple the 0.5% consensus and the largest monthly increase since March 2022. On a YoY basis, PPI accelerated to 6%, far above the 4.9% consensus and the hottest reading since December 2022. Core PPI, which strips out food and energy, climbed 1% MoM and 5.2% YoY, also smashing forecasts of 0.3% and 4.3%, respectively. Energy did most of the heavy lifting, with gasoline prices surging 15.6% as the war with Iran continued to squeeze global Oil flows. But the services side also lit up, climbing 1.2% for the biggest gain since March 2022, a worrying signal that pipeline pressures are spreading well beyond fuel costs.
Collins puts a rate hike on the table in Boston speech
Fed officials have grown markedly more uncomfortable with the inflation backdrop, and Boston Fed President Susan Collins drove that point home in remarks to the Boston Economic Club on Wednesday. While stressing it is not her base case, Collins said she "could envision a scenario in which some policy tightening is needed to ensure that inflation returns durably to 2% in a timely manner." She also took a direct shot at the dovish playbook, noting that "more than five years of above-target inflation has reduced my patience for 'looking through' another supply shock," and warned the Iran war's hit to global supply chains will linger even if a deal is struck soon. Collins, a non-voting Federal Open Market Committee (FOMC) member this year, expects the current slightly restrictive stance to stay in place "for some time", with high inflation unlikely to abate until 2027. With Tuesday's hot Consumer Price Index (CPI) report and Wednesday's even hotter PPI release feeding into the picture, traders are taking the hike talk seriously, with futures pricing now showing roughly a 40% chance of a hike by year-end and effectively no probability of a cut in June.
Warsh Fed Chair vote teed up for 18:00 GMT
The political backdrop adds another layer to the Fed narrative. The Senate is scheduled to vote on Kevin Warsh's confirmation as Fed Chair at around 18:00 GMT, after Tuesday's 51-45 vote confirmed him to the Board of Governors. Warsh, a Fed governor between 2006 and 2011 and a known inflation hawk, has pitched what he calls "regime change" at the Fed, including a smaller balance sheet and tighter coordination with the Treasury. Markets are watching closely because Powell's term as chair expires Friday, and Powell has confirmed he intends to remain on the Board through January 2028 to defend the institution's independence. With CPI and PPI both sitting at three-year highs, Warsh's first FOMC meeting on June 16-17 looks set to be anything but quiet.
Trump-Xi summit hopes fade as Iran war hands China leverage
President Trump landed in Beijing on Wednesday, his first visit to China since 2017 and his second face-to-face with Xi Jinping in under a year after their October sit-down on the sidelines of the APEC summit in Busan. The two leaders are scheduled to meet on Thursday and Friday with trade, Taiwan, artificial intelligence and the Iran war all on the agenda, but the optimism that usually accompanies such summits is conspicuously absent. The problem for the US side is timing. With the Strait of Hormuz still under a US blockade and Iran's foreign minister Abbas Araghchi having just visited Beijing, China is sitting on more leverage than at any point since the conflict began, not less. Trump has already described the current ceasefire as on "massive life support" and his aides are reportedly weighing a resumption of combat operations. Far from softening Xi's position, the US-Iran standoff is reinforcing the Chinese leader's home turf advantage, and equity traders are responding by dialling back expectations for any meaningful trade or geopolitical wins from the trip.
What's next
Attention now turns to Thursday's data dump at 12:30 GMT, with Initial Jobless Claims expected at 205K and April Retail Sales forecast to rise 0.5% MoM, alongside the closely watched Retail Sales Control Group. Any sign of consumer pullback would harden the stagflationary tone that has driven this week's defensive bid in stocks, while a resilient print could give the hike camp at the Fed even more ammunition. Friday's NY Empire State Manufacturing Index and Industrial Production round out the week, but the macro spotlight will remain firmly on Beijing and the Senate floor.
Dow Jones 15-minute chart
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
- US PPI jumps to four-year high, lifting Treasury yields.
- Dollar gains as Oil-driven inflation keeps Fed cuts distant.
- Starmer resignation rumors pressure Sterling before UK GDP data.
The British Pound (GBP) posts a 0.19% loss against the US Dollar (USD) on Wednesday in back-to-back bearish days after a red-hot US inflation report, amid mounting pressure on UK Prime Minister Keir Starmer to resign. The GBP/USD pair trades at 1.3513 after hitting a low of 1.3484 earlier in the day.
Sterling weakens as US inflation shock and UK politics bite
Inflation continues to grab the headlines. High energy prices, due to stalled negotiations between the US and Iran to resolve the conflict, keep Oil prices above $100. Hence, central banks are positioning to hold interest rates higher for longer, prompting traders to buy the Greenback.
Producer inflation in the US hit its highest level in four years, up 6% YoY in April, exceeding March’s 4.3% rise. Excluding volatile items, the so-called Core Producer Price Index (PPI) expanded by 5.2% YoY, up from March’s 4%, crushing estimates of 4.3%.
Consequently, US Treasury yields shoot up, with the 10-year note up 2.5 basis points to 4.488%. The US Dollar Index (DXY), which tracks the buck’s value against a basket of six currencies, is up 0.21% at 98.49.
Meanwhile, money markets have priced out Federal Reserve (Fed) interest rate cuts, expecting the central bank to keep rates unchanged. Data from Prime Terminal suggests that the Fed will keep funds rate unchanged at the 3.50%-3.75% range at its first meeting with Kevin Warsh as Chair, if he is confirmed by the Senate.
In the UK, some Labour MPs voted to oust Prime Minister Keir Starmer following the local election, in which his party suffered losses. Rumors that his health minister, Wes Streeting, is resigning to trigger a contest to replace him are exerting pressure on Sterling.
Meanwhile, 111 Labour MPs signed a statement of support for Starmer, saying that “This is no time for a leadership contest.”
Aside from this, GBP/USD traders are awaiting the release of UK GDP data on Thursday. In the US, jobless claims and Retail Sales will provide updates on the economy.
GBP/USD Price Forecast: Technical outlook
In the daily chart, GBP/USD trades at 1.3518, holding a mild bullish bias as it stays above the clustered simple moving averages (SMAs) around 1.3430 while still trading below the descending resistance trend line that is now projected near 1.3620. The latest 14-day Relative Strength Index hovers close to the 50 line, suggesting balanced momentum and hinting that any immediate upside will likely depend on whether buyers can sustain the pair above the reclaimed moving average support.
On the topside, initial resistance is defined by the downward-sloping trend line break level around 1.3620, and a daily close above this barrier would open the way for a more sustained recovery. On the downside, the SMA cluster near 1.3430 acts as the first significant support, with the immediate price area around 1.3518 functioning as a nearby pivot that bulls will want to defend to keep the constructive tone intact.
(The technical analysis of this story was written with the help of an AI tool.)
Pound Sterling 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 Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.32% | 0.27% | 0.76% | 0.16% | -0.57% | 0.03% | 0.58% | |
| EUR | -0.32% | -0.06% | 0.50% | -0.17% | -0.89% | -0.33% | 0.26% | |
| GBP | -0.27% | 0.06% | 0.06% | -0.13% | -0.86% | -0.26% | 0.32% | |
| JPY | -0.76% | -0.50% | -0.06% | -0.66% | -1.33% | -0.74% | -0.12% | |
| CAD | -0.16% | 0.17% | 0.13% | 0.66% | -0.64% | -0.08% | 0.42% | |
| AUD | 0.57% | 0.89% | 0.86% | 1.33% | 0.64% | 0.60% | 1.16% | |
| NZD | -0.03% | 0.33% | 0.26% | 0.74% | 0.08% | -0.60% | 0.55% | |
| CHF | -0.58% | -0.26% | -0.32% | 0.12% | -0.42% | -1.16% | -0.55% |
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).
BNY’s Geoff Yu notes that APAC (Asia-Pacific) currencies remains underowned outside the Korean Won (KRW) and Japanese Yen (JPY), as investors revisit the region for diversification but remain wary of inflation spillovers from China. Yu expects further Chinese Yuan (CNY) appreciation, yet not enough to ease pressure on other APAC currencies, and highlights rising intervention risks and the need for greater vigilance on pass-through from CNY, JPY and US Dollar (USD).
Selective support for APAC currencies
"The search for diversification continues amid resurging tensions over Iran and fears over equity concentration risk, and the market is once again revisiting APAC FX."
"A process that we felt would occur in any case has been accelerated by the conflict, and CNY ended last week as the best-bought currency in EM APAC, even though the net gain was marginal."
"Based on current flow figures, it appears markets fear the adverse scenario more in the near term."
"Meanwhile, outflows suggest the market will only hold currencies (or be unhedged in underlying markets) where there is a clear idiosyncratic narrative, whether AI-driven growth (South Korea), or more assertive intervention (Japan)."
"We continue to see CNY appreciation, but not at a pace that will provide relief for other APAC currencies."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Silver advances on Wednesday, supported by robust physical demand in China and persistent buying across Asian markets.
- Tensions in the Middle East and expectations surrounding the Fed continue to support interest in precious metals.
- TD Securities highlights that elevated Chinese premiums and import flows are supporting Silver’s bullish momentum.
Silver (XAG/USD) advances on Wednesday and trades around $88.65 at the time of writing, up 2.40% on the day. The white metal remains supported by strong Asian demand, despite the rebound in the US Dollar (USD) and higher US Treasury yields, which generally limit the appeal of non-yielding assets.
The bullish move in Silver comes amid persistent geopolitical tensions in the Middle East, as negotiations between the United States (US) and Iran remain deadlocked. Concerns over disruptions to energy supply continue to fuel global inflationary pressures, reinforcing investor interest in precious metals.
The latest US inflation data also strengthened expectations that the Federal Reserve (Fed) could maintain a restrictive monetary policy for longer. The US Consumer Price Index (CPI) accelerated to 3.8% YoY in April, its highest level since May 2023, while the Producer Price Index (PPI) rose 6% YoY. This dynamic is pushing US Treasury yields higher and supporting the Greenback.
Despite this less favorable environment for precious metals, Silver continues to show resilience. Strategists at TD Securities believe Chinese demand is currently acting as a key driver for the market. The bank noted that top traders on the Shanghai Futures Exchange (SHFE) have remained buyers of Silver in recent weeks, while Chinese premiums continue to stay elevated.
TD Securities also added that the import arbitrage has remained open several times recently, suggesting that Asian demand is supporting Silver’s upside beyond systematic Commodity Trading Advisor (CTA) flows.
This strength in physical demand is helping offset the negative impact of a stronger US Dollar and expectations that the Fed could keep interest rates higher for longer.
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
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