Forex News
- AUD/USD flatlines around 0.7150 in Monday’s early Asian session.
- Fed rate hike bets grow, which could support the US Dollar.
- Trump warned Iran to ‘get moving’ or ‘there won’t be anything left.’
The AUD/USD pair trades on a flat note near 0.7150 during the early Asian session on Monday. The pair steadies after retreating from multi-year highs amid shifting US interest rate expectations and ongoing geopolitical tensions. Traders will take more cues from the Chinese Industrial Production and Retail Sales reports, which are due later on Monday.
Market bets for the path of monetary policy from the US Federal Reserve (Fed) continue to shift towards possible rate hikes. Several Fed officials this week stated that keeping inflation pressures in check was a top priority, while others did not rule out the possibility that rate hikes may be needed if price pressures keep rising.
Markets are now pricing in nearly a 48.4% probability the US central bank could hike rates by at least 25 basis points (bps) at its December meeting, compared with 14.3% a week ago, according to the CME FedWatch tool.
The United States (US) and Iran remained far apart Sunday on a deal to end weeks of war and reopen the crucial Strait of Hormuz, highlighting the risks of a fragile ceasefire. On Sunday, US President Donald Trump threatened Iran to “get moving" or seemingly face new consequences. Signs of a prolonged conflict in the Middle East could lift a safe-haven currency such as the US Dollar (USD) and act as a headwind for the pair in the near term.
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
US President Donald Trump warned Iran the "clock is ticking" as talks to bring the war to an end have stalled, CNBC reported on Sunday.
“For Iran, the Clock is Ticking, and they better get moving, FAST, or there won’t be anything left of them,” Trump said in a Truth Social post. “TIME IS OF THE ESSENCE!,” Trump added.
Trump did not detail what exactly the consequences would be nor what he expects Iran to do in order to avoid them. The statement came as the US President was due to speak with Israeli Prime Minister Benjamin Netanyahu on Sunday.
Meanwhile, Iranian media reported the US had failed to make any concrete concessions in its response to Tehran's latest proposals to end the conflict.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
ING analysts see Taiwan’s external demand remaining a key growth driver, led by technology exports. They expect export orders to stay very strong, even as the year-on-year rate moderates. Robust higher-tech product prices are supporting headline export values and overall growth, although they also raise import costs, tempering some of the positive impact on Taiwan’s trade balance.
Export orders remain exceptionally strong
"Taiwan releases its export orders data."
"We expect orders to moderate to 54.3% YoY, which remains a very strong reading."
"Export orders opened the year quite strongly, suggesting that Taiwan’s external demand-driven growth is set to continue."
"Higher-tech product prices have been a major tailwind, even though they have also boosted import costs."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
DBS economists Taimur Baig and Radhika Rao anticipate Singapore’s April 2026 non-oil domestic exports to rise 11.5% year-on-year, marking an eighth consecutive month of expansion after 15.3% in March. The performance is expected to be driven by strong electronics benefiting from global artificial intelligence demand, while non-electronics lag and petrochemicals face downside risks from Middle East-related feedstock disruptions.
Electronics strength offsets petrochemical risks
"Singapore’s goods export performance likely remained robust in April 2026, in line with regional trends."
"We expect non-oil domestic exports (NODX) to grow by 11.5% yoy in April, extending the expansion for the eighth consecutive month, compared with 15.3% yoy in March."
"The increase in NODX was likely supported by the prevailing trend of superior momentum in electronics relative to weaker non-electronics shipments, as electronics continued to benefit from global artificial intelligence-related tailwinds."
"We continue to monitor the impact of the Middle East conflict, with petrochemical shipments likely to be negatively affected by curtailed feedstock supply."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
ING’s Min Joo Kang expects Japan’s economy to maintain similar growth to the previous quarter, with first-quarter Gross Domestic Product (GDP) seen rising 0.3% quarter-on-quarter. The war-related energy shock is judged to have limited impact on trade and growth but a more visible effect on inflation. ING forecasts April inflation at 1.8% year-on-year, helped by subsidies that cap broader price pressures.
Growth steady while prices edge higher
"Japan’s upcoming data releases will reveal the economic impact of energy disruptions."
"Energy effects may have a limited impact on growth but a greater impact on inflation."
"We believe the economy continued to grow at a similar rate as the previous quarter."
"We expect GDP to rise 0.3% quarter-on-quarter, seasonally adjusted."
"Inflation is expected to rise to 1.8% year-on-year in April, up from 1.5% in March."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
The US Dollar Index (DXY) climbs above the 99.30 region, reaching fresh multi-week highs on Friday as stronger-than-expected United States (US) economic data reinforced expectations that the Federal Reserve (Fed) may keep interest rates elevated for longer.
April Retail Sales rose 0.5%, highlighting resilient consumer spending despite elevated borrowing costs, while hotter Consumer Price Index (CPI) and Producer Price Index (PPI) reports continued fueling inflation concerns.
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 | 0.42% | 0.66% | 0.27% | 0.27% | 1.05% | 1.26% | 0.40% | |
| EUR | -0.42% | 0.24% | -0.13% | -0.16% | 0.62% | 0.87% | -0.00% | |
| GBP | -0.66% | -0.24% | -0.36% | -0.39% | 0.41% | 0.62% | -0.24% | |
| JPY | -0.27% | 0.13% | 0.36% | -0.01% | 0.75% | 0.98% | 0.12% | |
| CAD | -0.27% | 0.16% | 0.39% | 0.01% | 0.75% | 0.96% | 0.14% | |
| AUD | -1.05% | -0.62% | -0.41% | -0.75% | -0.75% | 0.24% | -0.63% | |
| NZD | -1.26% | -0.87% | -0.62% | -0.98% | -0.96% | -0.24% | -0.85% | |
| CHF | -0.40% | 0.00% | 0.24% | -0.12% | -0.14% | 0.63% | 0.85% |
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).
EUR/USD falls toward the 1.1620 area amid broad USD strength and higher US yields, pressuring the shared currency. Investors also remain cautious as rising energy costs linked to Middle East tensions weigh on the European growth outlook.
GBP/USD drops near the 1.3320 region, hitting fresh monthly lows as Sterling remains pressured by the stronger Greenback and persistent UK fiscal and political concerns about Prime Minister Kier Starmer's longevity in office.
USD/JPY advances toward the 158.80 zone, a two-week high, supported by widening US-Japan yield differentials following hotter-than-expected US inflation data. The Japanese Yen (JPY) also loses part of its safe-haven appeal as markets react positively to constructive headlines from the meeting between US President Donald Trump and Chinese leader Xi Jinping.
AUD/USD weakens toward the 0.7150 region as persistent USD demand offsets support from improving market sentiment surrounding the Trump-Xi summit.
West Texas Intermediate (WTI) Oil remains elevated above the $101.30 per barrel mark, as stalled negotiations involving Iran continue to fuel fears of prolonged disruptions to global energy flows through the Strait of Hormuz.
Gold trades under pressure near the $4,530 region as rising Treasury yields and persistent USD strength reduce demand for the non-yielding precious metal, though ongoing geopolitical tensions limit deeper losses.
Anticipating economic perspectives: Voices on the horizon
Monday, May 18:
- G7 Meeting
- ECB’s Elderson speech
- BoE’s Greene speech
- BoE’s Mann speech
Tuesday, May 19:
- G7 Meeting
- Fed’s Waller speech
- BoE’s Breeden speech
- ECB’s Lane speech
- Fed’s Paulson speech
Wednesday, May 20:
- Non-Monetary Policy ECB Meeting
- Fed’s Barr speech
- FOMC Minutes
- ECB’s Sleijpen speech
Thursday, May 21:
- German Buba Monthly Report
- BoE’s Taylor speech
- ECB’s Elderson speech
Friday, May 22:
- ECB’s Lane speech
- EcoFin Meeting
- Eurogroup Meeting
- Fed’s Waller speech
Central banks' meetings and upcoming data releases to shape
Sunday, May 17:
- NZ Business NZ PSI
Monday, May 18:
- China Industrial Production, Retail Sales
- NZ Q1 Producer Price Index Output
- Japan Q1 Gross Domestic Product
Tuesday, May 19:
- Australia May Westpac Consumer Confidence, RBA Meeting Minutes
- UK March Labor Market Data (Average Earnings, Employment Change, Unemployment Rate)
- UK April Claimant Count Data
- US ADP Employment Change 4-week average
- Canada April Inflation Data (BoC Core CPI, CPI)
- US April Pending Home Sales
Wednesday, May 20:
- China PBoC Interest Rate Decision
- UK April Inflation Data (CPI, Core CPI, PPI, RPI)
- Germany April Harmonized Index of Consumer Prices
- NZ April Trade Data (Exports, Imports, Trade Balance)
- Australia May Preliminary S&P Global PMIs
- Japan April Trade Data (Exports, Imports, Trade Balance)
Thursday, May 21:
- Australia May Consumer Inflation Expectations
- Australia April Labor Market Data (Employment Change, Participation Rate, Unemployment Rate)
- Germany April Producer Price Index
- Switzerland Q1 Industrial Production
- France May Preliminary HCOB PMIs
- Germany May Preliminary HCOB PMIs
- EU May Preliminary HCOB PMIs
- UK May Preliminary S&P Global PMIs
- US April Housing Data (Building Permits, Housing Starts)
- US Initial Jobless Claims, May Philadelphia Fed Manufacturing Survey
- US May Preliminary S&P Global PMIs
- EU May Preliminary Consumer Confidence
- NZ Q1 Retail Sales
- UK May GfK Consumer Confidence
- Japan April CPI
Friday, May 22:
- Germany Q1 Gross Domestic Product
- UK April Retail Sales
- Germany May IFO Survey (Business Climate, Current Assessment, Expectations)
- Canada March Retail Sales
- US May Michigan Consumer Sentiment and Inflation Expectations
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.
OCBC's strategist Christopher Wong says Asian FX remains constrained by a firm Dollar and higher US yields, despite some optimism around US–China talks. The Renminbi (RMB) is the main outperformer on lower USD/CNY fixes and policy-tolerated appreciation, but broader Asia FX stays soft. The bank characterizes the backdrop as measured, selective optimism rather than a broad regional rally.
Selective RMB resilience versus softer Asia FX
"The FX read-through was less clear-cut."
"Better US retail sales data reinforced the resilience of the US consumer and saw markets price in around a 23% probability of a 25bp Fed hike by Dec-2026, lending support to the USD and weighing on most major and Asian FX."
"RMB was the key exception, staying resilient on US–China optimism and policy-tolerated appreciation signals."
"For now, this points to measured and selective optimism on RMB rather than a broad Asia FX rally."
"US–China tail risks have eased at the margin, but higher US yields and a firmer USD remain key constraints for Asian FX."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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