Forex News
- WTI Oil prices bounce up to $89.00 from three-week lows below $85.00.
- The announcement of a total blockade of the Strait of Hormuz has reversed the downtrend.
- Oil prices had lost nearly 8% over the previous two days amid speculation of a new round of US-Iran peace talks.
Oil prices have bounced up during the Asian session, as the US military announced a total blockade of the Strait of Hormuz on Tuesday, increasing the chokehold on supply and putting the new round of talks with Iran into question. The price of the US benchmark West Texas Intermediate (WTI) barrel appreciated about $4 during the Asian session, retracing previous daily losses, and reaching levels near $89.00.
WTI prices had lost nearly 8% over the previous two days, to hit fresh three-week lows at $84.86 earlier on Tuesday amid rumours that the US and Iran maintained contacts to resume peace talks. US President Trump finally confirmed those hopes, affirming that negotiations might restart in the next two days.
Technical Analysis: Support around $84.50 is holding bears
The technical picture shows the WTI US Oil in a bearish bias within a broader horizontal channel, with support in the area of $84,50 holding downside attempts for now.
Indicators in the 4-hour chart remain in bearish territory. The Relative Strength Index (RSI) is recovering from oversold territory but is still below 50, and the Moving Average Convergence Divergence (MACD) shows an expanding negative histogram highlighting the weak momentum.
A clear break below $84.46 would confirm a deeper correction from the early March highs, aiming for the $80.00 psychological level and the March 10 low, near $76.00. On the topside, bulls face the next significant barrier at the weekly high of $98.10, followed by the April 6 and 7 highs, near $106.28, and the mentioned March 9 high, at $113.16.
(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.
Commerzbank strategists note that Brent Oil dropped nearly 5%, reversing Monday’s gains, as hopes for a second round of US–Iran negotiations and International Energy Agency (IEA) warnings of demand destruction weighed on prices. The International Monetary Fund’s (IMF) baseline still assumes Brent averages USD82 in 2026, but its adverse scenario envisions USD100 Oil and weaker global growth if the conflict persists.
Negotiation hopes clash with demand destruction
"Brent oil prices fell nearly 5% and reversed all of the gains on Monday."
"At the same time, Brent oil prices are still up 31% compared to the start of the war and up 56% year-to-date."
"The drop in crude was reinforced by the IEA's assessment that the war will wipe out global oil demand growth for the first time since 2020, pointing to demand-destruction."
"IMF’s current base case or “reference forecast” is a benign scenario that assumes a short-lived conflict and oil prices to normalize in H2 2026."
"It assumes an average Brent oil price of USD82 for 2026."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Gold struggles to capitalize on a modest Asian session uptick to a four-week high.
- Hormuz risks eased the recent USD selling bias, which caps gains for the commodity.
- Iran diplomacy hopes and receding Fed rate hike bets keep a lid on the USD bounce.
Gold (XAU/USD) remains depressed below a nearly four-week high, touched earlier this Wednesday, though it lacks follow-through selling and holds above the $4,800 mark heading into the European session. Given that the path to a durable US-Iran agreement remains uncertain on the back of the instability in the Strait of Hormuz, the US Dollar (USD) stages a modest recovery from its lowest level since early March and undermines the commodity. In fact, Iran's ambassador to the UN described the US blockade, which took effect on Monday, as a grave violation of Tehran's sovereignty.
Moreover, Iran’s Islamic Revolutionary Guard Corps (IRGC) has vowed to retaliate, keeping geopolitical risks in play. This, in turn, benefits the USD's reserve currency status and exerts some downward pressure on the Gold price. Investors, however, remain hopeful that the door for Iran diplomacy remains open. Furthermore, diminishing odds for a rate hike by the US Federal Reserve (Fed) should keep a lid on any meaningful USD recovery. This, in turn, offers some support to the non-yielding yellow metal and helps limit deeper losses, warranting some caution for aggressive bearish traders.
US Vice President JD Vance, speaking at a public event, again struck a cautiously optimistic tone and said that Washington is pursuing a broader grand bargain aimed at reshaping Iran’s economic integration with the world. Furthermore, United Nations (UN) Secretary-General António Guterres told reporters on Tuesday that the resumption of US-Iran talks is highly probable. The optimism over diplomatic efforts to extend the US-Iran ceasefire has been a key factor behind the recent USD decline over the past two weeks or so, and could further lend support to the Gold price.
Data released on Tuesday showed that the US Producer Price Index (PPI) rose to 4% on a yearly basis in March from 3.4% in the previous month. On a monthly basis, the PPI climbed 0.5%, while the gauge excluding Food & Energy was up 3.8% YoY in March. These readings fell short of consensus estimates and eased concerns about the inflationary impact of the war-driven surge in energy prices, tempering hawkish expectations. The resultant decline in US Treasury bond yields should contribute to capping the USD and back the case for the emergence of dip-buyers around the Gold.
XAU/USD 4-hour chart
Gold could attract dip-buyers; 200-period SMA on H4 holds the key for bulls
The XAU/USD pair is holding a constructive bullish bias and looking to build on momentum beyond the 200-period Simple Moving Average (SMA) pivotal resistance on the 4-hour chart. Meanwhile, momentum remains strong, with the Relative Strength Index (RSI) at 65.5, edging toward overbought territory, and the Moving Average Convergence Divergence (MACD) rising in positive territory. This hints that bullish pressure persists but may be vulnerable to fatigue on further gains.
In the meantime, initial resistance is seen at the 61.8% Fibonacci retracement level at $4,912.54, and a sustained break above this level would open the way toward the 78.6% retracement at $5,134.37, ahead of the cycle high at $5,416.94. On the downside, the 50% retracement level of the March downfall reinforces the underlying floor at $4,756.73. A convincing break below this would expose deeper supports at the 38.2% retracement level at $4,600.92 and the 23.6% level at $4,408.14, where buyers would be expected to regroup on a more pronounced correction.
(The technical analysis of this story was written with the help of an AI tool.)
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.
- The Indian Rupee opens positively against the US Dollar on hopes of a US-Iran permanent ceasefire.
- Negotiations between the US and Iran are expected to resume this week.
- The FIIs' selling pressure has cooled down since the US-Iran two-week ceasefire announcement.
The Indian Rupee (INR) opens higher against the US Dollar (USD) after a holiday the previous day due to Dr. Baba Saheb Ambedkar Jayanti. The USD/INR pair falls to near 93.20 as a sharp decline in the oil price and upbeat market sentiment due to growing expectations that the United States (US) and Iran could reach a permanent ceasefire soon have improved the Indian Rupee’s appeal.
Trump expects war with Iran to be very close to being over
Earlier in the day, US President Donald Trump said in an interview with Fox Business, "I think it’s close to over, yeah. I view it as very close to being over," when asked about how long the war with Iran will remain.
US President Trump also said to The New York Post on Tuesday that negotiation teams from Washington and Tehran could resume talks in Pakistan in the next two days.
Positive commentary from US President Trump over a permanent truce with Iran, despite the first round of talks ending without a breakthrough, has fuelled market sentiment, diminished the appeal of safe-haven assets, and weighed on the oil price.
As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, ticks higher to near 98.15, but is still close to its almost seven-week low of 98.00.
WTI Oil price slides below $90.00 on hopes that the US-Iran truce would ease supply crisis; however, market experts worry that supply constraints will remain for longer due to significant damage to energy infrastructure in the Middle East.
The appeal of currencies from economies, such as India, which rely heavily on oil imports to meet their energy needs, improves when oil prices start declining after a healthy run.
The pace of FIIs selling cools down
Since the announcement of the two-week ceasefire between the US and Iran, the amount of daily selling by overseas investors in the Indian stock market has cooled down. So far in April, Foreign Institutional Investors (FIIs) have remained net sellers in seven out of eight trading days and have pared their stake worth Rs. 40,955.81 crore. However, the stake offloaded since the two-week truce announcement on April 7 midnight was Rs. 5,834.25 crore, one-fifth of the amount recorded in the first week of this month.
In Wednesday’s session, investors will focus on the WPI Inflation data for March. Inflation at the wholesale level is estimated to have grown at an annualized pace of 3%, faster than 2.13% in February.
Technical Analysis: USD/INR holds key 20-day EMA
USD/INR trades lower at around 93.25 in the opening session on Wednesday. The pair holds a modest bullish bias as spot remains above the 20-day Exponential Moving Average (EMA) at around 93.10. The recovery from last week’s trough is underpinned by this dynamic support, while the 14-day Relative Strength Index around 52.7 suggests neutral-to-slightly positive momentum rather than an overstretched advance.
On the downside, the 20-day EMA at 93.09 is the first key support to watch; a daily close below this level would weaken the constructive tone and open the door to a deeper correction toward the January high of 92.29. Looking up, the pair could advance towards the all-time high of 95.15 if it manages to recover sustainably above the 94.00 mark.
(The technical analysis of this story was written with the help of an AI tool.)
Indian Rupee FAQs
The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee.
The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference.
Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee.
Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.
- USD/CHF trades vulnerably around 0.7800 as the US Dollar underperforms across the board.
- US President Trump expresses confidence that the war with Iran is close to an end.
- The US and Iran are expected to resume talks soon.
The USD/CHF pair trades flat around 0.7812 during the late Asian trading session on Wednesday, but is still close to its monthly low of 0.7790 posted the previous day. The Swiss Franc pair faces selling pressure as the US Dollar (USD) underperforms its peers amid optimism that the United States (US) and Iran could reach a permanent ceasefire soon.
During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, ticks higher to near 98.15, but is still close to its almost seven-week low of 98.00.
The optimism over the US-Iran permanent ceasefire is backed by positive commentary from US President Donald Trump, in an interview with Fox Business earlier in the day, that the war with Iran is close to an end. "I think it’s close to over, yeah. I view it as very close to being over,” Trump said. He also said to The New York Post on Tuesday that negotiations with Iran could resume in Pakistan in the next two days.
US Vice President (VP) JD Vance also said in a public event that talks with Iran are taking place via channels including Pakistan, will continue, as “both sides work toward a deal”.
Meanwhile, traders are no longer pricing in interest rate hikes by the Federal Reserve (Fed) this year, as inflation expectations have de-anchored due to US-Iran optimism, a sharp turnaround from two hike projections seen in March after the war started.
- EUR/USD may retest the ascending channel top near the eight-week high of 1.1834.
- The 14-day Relative Strength Index near 64 indicates solid positive momentum.
- The immediate support lies at the nine-day EMA at 1.1701.
EUR/USD remains calm after halting its seven-day winning streak, trading around 1.1790 during the Asian hours on Wednesday. The daily chart technical analysis indicates a bullish bias, as the pair is moving upwards within an ascending channel.
The EUR/USD pair maintains a bullish near-term bias as spot holds above both the nine-day and 50-day Exponential Moving Averages (EMAs). The pair is pressing higher with the 14-day Relative Strength Index hovering near 64, suggesting firm positive momentum but edging towards overbought territory as price approaches nearby overhead levels.
On the upside, the EUR/USD pair may retest its immediate barrier at the upper boundary of the ascending channel around 1.1830, followed by the eight-week high of 1.1834, reached on February 23. A sustained break above this confluence resistance zone would lead the pair to explore the region around 1.2082, the highest since June 2021, reached on January 27.
The EUR/USD pair may find the initial support at the nine-day EMA of 1.1701, followed by the nine-day EMA of 1.1654 and the lower ascending channel boundary around 1.1630. Further declines below the channel would expose the eight-month low of 1.1411, recorded on March 13.
(The technical analysis of this story was written with the help of an AI tool.)
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.07% | 0.00% | 0.11% | 0.06% | -0.17% | 0.02% | 0.06% | |
| EUR | -0.07% | -0.06% | 0.06% | -0.01% | -0.17% | -0.05% | -0.01% | |
| GBP | -0.00% | 0.06% | 0.13% | 0.09% | -0.10% | 0.01% | 0.05% | |
| JPY | -0.11% | -0.06% | -0.13% | -0.06% | -0.21% | -0.14% | -0.08% | |
| CAD | -0.06% | 0.00% | -0.09% | 0.06% | -0.15% | -0.05% | -0.02% | |
| AUD | 0.17% | 0.17% | 0.10% | 0.21% | 0.15% | 0.10% | 0.15% | |
| NZD | -0.02% | 0.05% | -0.01% | 0.14% | 0.05% | -0.10% | 0.05% | |
| CHF | -0.06% | 0.00% | -0.05% | 0.08% | 0.02% | -0.15% | -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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
- USD/JPY edges higher during the Asian session on Wednesday, though it lacks follow-through.
- Hormuz risks undermine the JPY and lend support to spot prices amid a modest USD recovery.
- The mixed technical setup warrants some caution before placing aggressive directional bets.
The USD/JPY pair once again shows some resilience below the 200-period Simple Moving Average (SMA) on the 4-hour chart and edges higher during the Asian session on Wednesday. Spot prices, however, lack bullish conviction and struggle to capitalize on the strength beyond the 159.00 mark.
Despite the optimism over Iran diplomacy, economic concerns stemming from the instability in the Strait of Hormuz hold back traders from placing bullish bets around the Japanese Yen (JPY). This, along with a modest US Dollar (USD) recovery from its lowest level since early March, turns out to be another factor lending some support to the USD/JPY pair. However, the optimism over continued US-Iran peace talks and diminishing odds for a rate hike by the US Federal Reserve (Fed) caps the upside for the currency pair.
From a technical perspective, the USD/JPY pair retains a mildly bullish near-term bias as it remains above the 158.30-158.25 horizontal support. Moreover, the Moving Average Convergence Divergence (MACD) indicator is slightly negative and flat below the zero line, suggesting waning bearish pressure rather than a strong directional impulse for now. That said, the Relative Strength Index (RSI) around 46 hints at only modest downside momentum. This, in turn, warrants caution before positioning for further gains.
Meanwhile, the 200-period SMA on the 4-hour chart near 158.76 might continue to protect the immediate downside. A sustained break would weaken the constructive tone and open the door to a deeper correction. As long as USD/JPY holds above this moving average, dips are likely to attract buyers, though the lack of bullish conviction implies that the near-term trajectory will have to be defined on the basis of forthcoming price action rather than the existing mixed technical setup.
(The technical analysis of this story was written with the help of an AI tool.)
USD/JPY 4-hour chart
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.07% | 0.01% | 0.13% | 0.06% | -0.15% | 0.03% | 0.07% | |
| EUR | -0.07% | -0.06% | 0.07% | -0.02% | -0.15% | -0.04% | -0.00% | |
| GBP | -0.01% | 0.06% | 0.11% | 0.09% | -0.10% | -0.01% | 0.05% | |
| JPY | -0.13% | -0.07% | -0.11% | -0.06% | -0.21% | -0.12% | -0.07% | |
| CAD | -0.06% | 0.02% | -0.09% | 0.06% | -0.13% | -0.04% | -0.01% | |
| AUD | 0.15% | 0.15% | 0.10% | 0.21% | 0.13% | 0.10% | 0.14% | |
| NZD | -0.03% | 0.04% | 0.00% | 0.12% | 0.04% | -0.10% | 0.04% | |
| CHF | -0.07% | 0.00% | -0.05% | 0.07% | 0.00% | -0.14% | -0.04% |
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).
- US Dollar Index may weaken as safe-haven demand fades amid rising optimism over a diplomatic US-Iran resolution.
- US Vice President Vance cited “significant progress” in initial Iran talks in Pakistan, with follow-up discussions likely within days.
- Softer US PPI reinforced easing inflation pressures, reducing the need for the Federal Reserve to raise rates.
The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is halting its seven-day losing streak and trading around 98.20 during the Asian hours on Wednesday.
However, the Greenback may face further challenges on reduced safe-haven demand as market optimism grows on hopes for a diplomatic solution to the Middle East conflict. The United States (US) and Iran are reportedly preparing for a second round of peace talks before the current two-week ceasefire expires, even as rising tensions in the Strait of Hormuz continue to exacerbate global energy risks.
US President Donald Trump signaled negotiations could resume this week, while also opposing a 20-year suspension of Iran’s nuclear enrichment program. Meanwhile, Vice President JD Vance highlighted “significant progress” in the initial round of Iran talks held in Pakistan, with follow-up discussions potentially set to take place within days.
Additionally, the US Dollar could struggle as recent US Producer Price Index (PPI) data reinforced easing inflation pressures, reducing the need for the Federal Reserve (Fed) to raise rates. PPI rose 0.5% month-over-month (MoM), well below the 1.2% consensus, while core PPI printed at 0.1% MoM versus expectations of 0.6%. On an annual basis, US PPI increased 4% in March, missing the 4.6% forecast and rising from February’s 3.4%, while Core PPI held steady at 3.8% YoY, unchanged from the prior month.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact 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 when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
US President Donald Trump said in an ABC News interview on Wednesday that he isn't thinking about extending the ceasefire, adding that he doesn't think it will be necessary.
"I think you’re going to be watching an amazing two days ahead. I really do," Trump noted.
Market reaction
Even though Trump continues to talk up the anticipated Iran negotiations, the US Dollar Index (DXY) holds its latest bounce near 98.20, up 0.07% on the day.
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 Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.06% | 0.00% | 0.13% | 0.05% | -0.17% | -0.03% | 0.05% | |
| EUR | -0.06% | -0.05% | 0.07% | -0.01% | -0.15% | -0.09% | -0.01% | |
| GBP | -0.00% | 0.05% | 0.13% | 0.07% | -0.08% | -0.04% | 0.04% | |
| JPY | -0.13% | -0.07% | -0.13% | -0.07% | -0.22% | -0.18% | -0.09% | |
| CAD | -0.05% | 0.01% | -0.07% | 0.07% | -0.14% | -0.09% | -0.01% | |
| AUD | 0.17% | 0.15% | 0.08% | 0.22% | 0.14% | 0.06% | 0.14% | |
| NZD | 0.03% | 0.09% | 0.04% | 0.18% | 0.09% | -0.06% | 0.08% | |
| CHF | -0.05% | 0.01% | -0.04% | 0.09% | 0.01% | -0.14% | -0.08% |
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).
- NZD/USD bulls turn cautious as Hormuz risks offer some support to the safe-haven USD.
- Iran diplomacy hopes and reduced Fed rate hike bets keep the USD bulls on the defensive.
- Easing inflationary concerns drag US bond yields lower and contribute to capping the buck.
The NZD/USD pair struggles to capitalize on its strong move up witnessed over the past two days and oscillates in a narrow band near the 0.5900 mark during the Asian session on Wednesday. Spot prices, however, remain close to over a one-month top, touched on Tuesday, and seem poised to appreciate further.
The US Dollar (USD) recovers slightly from the lowest level since early March set on Tuesday amid the instability in the Strait of Hormuz and acts as a headwind for the NZD/USD pair. Iran's ambassador to the UN described the US blockade, which took effect on Monday, as a grave violation of Tehran's sovereignty. This could jeopardise the already fragile ceasefire. Moreover, Iran’s Islamic Revolutionary Guard Corps (IRGC) has vowed to retaliate, keeping geopolitical risks in play and offering some support to the Greenback.
Meanwhile, investors remain hopeful that the door for diplomacy remains open amid the high probability of the resumption of US-Iran peace talks. In fact, US Vice President JD Vance again struck a cautiously optimistic tone and signaled that negotiations are ongoing, with Washington pursuing a broader grand bargain aimed at reshaping Iran’s economic integration with the world. This, along with diminishing odds for a rate hike by the US Federal Reserve (Fed), caps the attempted USD recovery and favors the NZD/USD bulls.
Data released on Tuesday showed that the US Producer Price Index (PPI) rose less-than-expected in March, easing concerns over the inflationary impact of the war-driven surge in energy prices and tempering hawkish expectations. The resultant decline in US Treasury bond yields and the prevailing positive risk tone undermine the safe-haven USD and further validate the positive outlook for the NZD/USD pair.
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.
The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.
Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.
The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
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