Forex News
BNY’s Head of Markets Macro Strategy Bob Savage highlights U.S. diesel prices breaking above $5 per gallon for the first time since 2022, warning of pass‑through to transport and broader inflation and potential political risks into the U.S. midterms.
Energy price shock posing potential political risks
"U.S. diesel prices have surged above $5 per gallon, reaching $5.044. This marks the first time they have exceeded this level since December 2022, driven by supply disruptions linked to the Iran conflict and the effective closure of the Strait of Hormuz."
"The spike reflects constrained flows of crude, refined fuels, natural gas and fertilizers from the Persian Gulf, with diesel particularly impacted given the region’s refining capacity."
"The increase has already been evident across multiple states and extended to heating oil, which also moved above $5."
"Elevated diesel prices are expected to feed through to transportation, agriculture and construction costs, amplifying broader inflationary pressures and posing potential political risks as the U.S. midterm elections approach."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Commerzbank's FX & Commodity Analyst Volkmar Baur reports that Chinese Aluminium production has risen nearly 3% year-on-year and is running above the government’s annualized cap, supported by higher Aluminium prices and redirected Alumina flows as the Strait of Hormuz remains blocked. The bank warns that if Beijing does not raise the cap, smelters will eventually need to scale back output later in the year.
High prices and alumina surplus drive output
"It is expected that Chinese production figures will remain above the 3.75 million-ton threshold in the coming months as well. As long as the Iran conflict persists and renders the Strait of Hormuz impassable, production disruptions in the Gulf region are likely to continue."
"This has led to a 9% increase in the price of aluminium since the conflict began."
"In addition, the closure of the Strait of Hormuz is leading to a global oversupply of alumina. Alumina (or aluminium oxide) is primarily used for aluminium production and is imported into the Gulf region as a feedstock for aluminium production."
"Both rising aluminium prices and a surplus of alumina therefore make it economically lucrative (at least for the moment) for Chinese smelters to produce above the government’s cap. If this cap is not raised, production would have to be scaled back accordingly over the course of the year."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Gold remains subdued ahead of major central bank decisions this week.
- Markets focus on forward guidance as Oil-driven global inflation risks complicate the outlook.
- On the 4-hour chart, XAU/USD maintains a bearish near-term bias as price trades below key SMAs.
Gold (XAU/USD) trades in a tight range on Tuesday as traders remain cautious and avoid large directional bets ahead of a heavy week of monetary policy announcements from major central banks. At the time of writing, XAU/USD trades virtually unchanged around $5,008, hovering near one-month lows.
Focus on central banks as inflation risks resurface
The upcoming policy decisions from major central banks, including the Federal Reserve (Fed), European Central Bank (ECB), Bank of England (BoE), Bank of Japan (BoJ), Bank of Canada (BoC), and the Swiss National Bank (SNB), come at a particularly sensitive time for global markets.
While all are widely expected to keep interest rates unchanged, the focus will be firmly on forward guidance and how policymakers assess the future policy path, as elevated Oil prices driven by the ongoing US-Iran war raise concerns about renewed inflationary pressure.
This backdrop has strengthened expectations that central banks may delay cuts on borrowing costs to keep them higher for longer. Higher interest rates increase the opportunity cost of holding non-yielding assets such as Gold, which is reflected in the metal’s steady downside pressure since the Middle East war began as markets started to reprice the global interest-rate outlook in a more hawkish direction.
Traders now anticipate only around 25 basis points (bps) of Fed rate cuts by year-end, down from earlier expectations of more than 50 bps. According to the CME FedWatch Tool, the Fed is expected to remain on hold through April, June and July. September is currently seen as the most likely timing for a rate cut, with a probability of around 50.8%.
Strait of Hormuz tensions keep markets on edge
Meanwhile, escalating geopolitical tensions continue to support Gold prices, helping to limit deeper losses. The ongoing conflict between the US-Irael and Iran shows no clear signs of de-escalation, while disruptions in the Strait of Hormuz persist, keeping energy markets on edge.
US President Donald Trump has called on other countries to help secure the Strait, urging nations that rely on the route to support his country's efforts. However, international backing remains limited.
Japan's defense minister said it has no plans to send ships, UK Prime Minister Keir Starmer noted Britain would “not be drawn into the wider war,” while Spain’s Foreign Minister Jose Manuel Albares remarked, “We must not do anything that adds even more tension or escalation.”
Arsenio Dominguez, Secretary-General of the International Maritime Organization (IMO), said naval escorts through the Strait of Hormuz would not “100 per cent guarantee” the safety of ships transiting the critical waterway. He added that military assistance is “not a long-term or sustainable solution,” according to the Financial Times.
Technical analysis: Downside bias holds below key SMAs
On the 4-hour chart, XAU/USD remains under pressure below the 100-period Simple Moving Average (SMA) near $5,158, with the 200-period SMA at $5,061 acting as immediate resistance.
The Relative Strength Index (RSI) has slipped to around 39, suggesting bearish momentum without entering oversold territory, while the Average Directional Index (ADX) near 35 signals a strengthening trend that currently favors the downside.
On the upside, a decisive break above the 200-period SMA near $5,061 could pave the way toward the 100-period SMA around $5,158. A sustained move above these levels could extend gains toward the $5,200 region.
On the downside, initial support stands at Monday’s low at $4,967, with a break below exposing the $4,850 and $4,650 levels as the next downside targets.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Commerzbank’s Commodity Analyst Carsten Fritsch notes that Gold has fallen about 5% since the Iran war began, struggling to act as a safe haven as a stronger Dollar and repriced Fed expectations weigh. ETF outflows have reversed earlier inflows, and he argues that a cautious FOMC is unlikely to provide fresh impetus for Gold unless rate-cut prospects are clearly kept open.
Safe-haven role challenged by Fed repricing
"The gold price is struggling to fulfil its role as a safe haven in times of crisis. It is currently trading at just over USD 5,000 per troy ounce. Since the start of the war in Iran two and a half weeks ago, the gold price has thus fallen by around 5%. The US dollar, which has risen significantly in value since the start of the war, has provided headwinds for the gold price. "
"However, there have also been periods in the recent past where the gold price has been able to defy a stronger US dollar. This is not the case this time due to the correction in expectations regarding Fed interest rate cuts. By the end of last week, Fed Funds futures were no longer pricing in even a 25-basis-point rate cut by the end of the year."
"This means that almost 50 basis points of expected rate cuts have been priced out of the market since the start of the war. This is primarily due to the sharp rise in oil prices and the resulting inflationary risks. Rising interest rates, or fewer rate cuts, increase the opportunity cost of holding gold."
"If the door remains open for interest rate cuts, the gold price could rise again. However, the considerable uncertainty surrounding the duration of the war and the disruption to oil supplies is likely to make the Fed cautious about making too clear a statement on the future interest rate path. The FOMC meeting is therefore unlikely to provide any new impetus for the gold price."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Silver price demonstrates caution around $80.50 ahead of the Fed’s monetary policy announcement on Wednesday.
- The Fed is anticipated to hold interest rates steady in the current range of 3.50%-3.75%.
- Heightened geopolitical tensions in the Middle East would continue supporting the Silver price.
Silver price (XAG/USD) trades cautiously around $80.50 during the European trading session on Tuesday. The white metal wobbles in a tight range as investors shift focus to the Federal Reserve’s (Fed) monetary policy announcement on Wednesday.
The Fed is expected to leave interest rates unchanged in the current range of 3.50%-3.75% for the second time in a row amid heightened inflation expectations in the wake of rising oil prices due to conflicts in the Middle East.
According to the CME FedWatch tool, the Fed is also expected to hold interest rates steady for the next four meetings after Wednesday’s interest rate decision.
The scenario of the Fed avoiding any monetary policy adjustment for a longer period bodes poorly for non-yielding assets, such as Silver.
For more cues on the United States (US) interest rate outlook, investors will focus on the Fed’s dot plot and Chairman Jerome Powell’s press conference following the interest rate decision on Wednesday.
Meanwhile, ongoing conflicts between the US, Israel, and Iran are expected to continue offering support to the Silver. Brutal war between these nations is unlikely to de-escalate in the near term as Iran's new Supreme Leader, Mojtaba Khamenei, has rejected peace proposals in the foreign policy session during the day, Reuters reports.
Theoretically, safe-haven assets, such as Silver, perform strongly in a heightened geopolitical environment.
Silver technical analysis
In the 4-hour chart, XAG/USD trades in a Descending Triangle chart pattern around $80.50, which signifies a sharp volatility contraction. The downward-sloping border placed from the March 1 high at $96.62 is capping the upside near $84.00. Meanwhile, the downside has been limited by the horizontal support plotted from the March 3 low around $78.00.
The near-term bias is bearish as price holds beneath the 20-period Exponential Moving Average, which is rolling over near $81.80. The series of lower highs from above $96.00 reinforces a downside structure, while the 14-period RSI wobbles near 40s shows persistent weak momentum without oversold relief, keeping selling pressure in control.
Initial resistance is located at the 20-period EMA near $81.80, followed by the downward-sloping border around $84.00. A sustained break above the latter would challenge the bearish bias and open the way toward the $86.00 area. On the downside, immediate support emerges at $79.00, ahead of the recent trough near $78.50, where a pause in downside momentum would be expected if the RSI dips closer to oversold territory.
(The technical analysis of this story was written with the help of an AI tool.)
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.
BNY’s Head of Markets Macro Strategy Bob Savage highlights that the Canadian Dollar (CAD) has been among the best-performing G10 currencies over the past two weeks, helped by steady inflows during the Iran conflict. However, he notes investors are cautious into the upcoming Bank of Canada (BoC) decision, with USD/CAD selling dominating and little evidence that CAD is being favored versus higher-yielding G10 or Emerging Markets (EM) currencies as a true haven.
Strong run but haven status questioned
"CAD has been one of the best-performing G10 currencies in the past two weeks, over the period of the Iran conflict. Toward end-February, there were already signs of a turnaround taking place, as CAD saw some good inbound flows, possibly related to rebalancing. Over the past two weeks, however, interest has been very consistent and the currency is amid its best run of the last two months."
"At a +0.07 YTD flow average, the currency has a comfortable buffer in place, although there is a sense that markets are trying to avoid excessive exposure heading into the BoC decision. USD/CAD selling is currently severely outpacing CAD purchases, supporting the view that aside from hedging on the pair (or Canadian investors adding to hedges on their USD-denominated assets), there is very little interest in CAD on a relative-value basis."
"If anything, it would require significant selling of CAD on the crosses to bring the CAD aggregate inflow average down to +0.07 from 0.18 for CAD vs. USD. CAD versus higher-yielding G10 and EM currencies appears to be a carry trade, especially if the currency is seen as relatively liquid and easier to manage for relative-value participants in FX markets."
"As such, the fact that CAD is not being favored over AUD, GBP or EM names would cast doubt on its status as a solid haven during times of stress, even if there is an energy angle in play."
"The BoJ and BoC will both be watched for FX market reactions and the tone that central bankers strike in their forward policy guidance as they balance risks."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- AUD/USD recovers after a more hawkish-than-expected press conference from the RBA.
- The Reserve Bank of Australia delivers a rate hike but reveals internal divisions.
- Markets remain cautious ahead of the Federal Reserve’s policy decision.
AUD/USD trades around 0.7090 on Tuesday at the time of writing, up 0.25% on the day, rebounding after an initial pullback following the Reserve Bank of Australia (RBA) monetary policy decision. The pair finds support from comments by Governor Michele Bullock, which help ease concerns over a narrow vote behind the rate hike.
The Reserve Bank of Australia (RBA) raises its Official Cash Rate by 25 basis points to 4.10%, in line with market expectations. However, the 5-4 split decision initially weighed on the Australian Dollar (AUD), as investors interpreted it as a sign of uncertainty within the policy board. The central bank nevertheless warned that inflation risks remain elevated, partly driven by rising energy prices amid geopolitical tensions.
During her press conference, Michele Bullock emphasized that inflation was already high before the recent Oil price shock, due to domestic demand exceeding supply. This clarification is perceived as relatively hawkish and supports the rebound in AUD/USD after the initial negative reaction.
Several financial institutions provide mixed assessments of the decision. Commerzbank notes that the limited reaction of the Australian Dollar reflects concerns about a stagflationary environment and the lack of a strong consensus within the central bank. Standard Chartered highlights that the debate focused more on the timing rather than the direction of policy, while still pointing to a potential terminal rate around 4.35%.
MUFG underlines that the tightening bias remains intact, with inflation risks and higher yields continuing to support the Aussie. ING, however, sees signs of fatigue in the bullish trend, although it still expects a gradual appreciation of the pair over the medium term.
Meanwhile, the US Dollar (USD) trades cautiously as investors await the Federal Reserve (Fed) policy decision. While the Fed is widely expected to keep rates unchanged, the focus will be on updated economic projections and guidance regarding the timing of future rate cuts. Goldman Sachs has already pushed back its rate-cut expectations, citing a higher inflation trajectory.
In this context, AUD/USD price action remains driven by the relative monetary policy outlook between Australia and the United States (US), as well as broader market sentiment surrounding inflation and geopolitical risks.
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.06% | -0.09% | -0.03% | 0.12% | -0.20% | 0.29% | -0.13% | |
| EUR | 0.06% | -0.03% | 0.04% | 0.18% | -0.13% | 0.35% | -0.06% | |
| GBP | 0.09% | 0.03% | 0.08% | 0.21% | -0.10% | 0.39% | -0.03% | |
| JPY | 0.03% | -0.04% | -0.08% | 0.15% | -0.17% | 0.32% | -0.10% | |
| CAD | -0.12% | -0.18% | -0.21% | -0.15% | -0.31% | 0.18% | -0.24% | |
| AUD | 0.20% | 0.13% | 0.10% | 0.17% | 0.31% | 0.48% | 0.07% | |
| NZD | -0.29% | -0.35% | -0.39% | -0.32% | -0.18% | -0.48% | -0.42% | |
| CHF | 0.13% | 0.06% | 0.03% | 0.10% | 0.24% | -0.07% | 0.42% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
Brown Brothers Harriman’s (BBH) Elias Haddad notes that the Dollar is trading defensively even as Brent holds above $100 and European gas prices stay elevated. The bank highlights mixed news on shipping security through the Strait of Hormuz and questions whether markets are closer to peak fear, concluding that near-term USD risks remain skewed to the upside.
Strait security keeps USD risks elevated
"Brent crude oil prices are holding above $100 a barrel and natural gas prices in Europe remain just shy of recent highs. Iranian drones and missiles continue to batter energy infrastructure around the Persian Gulf. In parallel, USD is trading on the defensive against most major currencies, global sovereign bond yields pulled back from recent highs, while stock markets are finding a floor."
"News around the security of shipping through the crucial Strait of Horuz is mixed. Some countries (China, Pakistan, India, Turkiye, France, Italy) are reportedly securing side deals with Iran to keep their ships moving. That has stabilized the perceived risk of shipping through the Strait."
"Nevertheless, the head of the International Maritime Organization warned that naval escorts though the Strait cannot fully guarantee ships’ safety. The waterway’s narrow navigable channels (2-mile wide, or 3.7km) and proximity to Iran’s mountainous coastline leave vessels exposed to attacks."
"For financial markets, the key issue is whether we are closer to peak fear than to another leg higher in shipping security concerns. We lean towards the former, but with a very low conviction given US action so far appears more reactive than strategic. As such, near-term USD risks remain skewed to the upside."
"DXY holds under 100.00 while Brent stays above $100 a barrel. Stocks and bonds stable."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
ING’s Francesco Pesole notes the Reserve Bank of Australia (RBA) delivered a split 25 bp hike to 4.10%, initially read as dovish and triggering a sell-the-fact move in AUD/USD before a rebound on Governor Bullock’s comments. ING sees signs of fatigue in the AUD bull market but still expects higher levels, targeting 0.70 in coming weeks and 0.74 by year-end.
RBA split hike and AUD fatigue
"The Reserve Bank of Australia delivered a back-to-back 25bp hike overnight, taking rates to 4.10% in a 5-4 split decision. The division in the board was read as a dovish signal initially by markets (that had priced in around 65% probability of a hike) and caused a correction in AUD/USD, with sell-the-fact kind of price action also playing a role in our view."
"AUD rebounded during Governor Michele Bullock’s press conference, where she clarified the Board’s debate was on the timing of a rate hike (March vs May) rather than on whether to tighten policy, and reiterated some alarmism on inflation."
"Still, we do see some signs of tiredness in the AUD bull market. The swap market remains aggressively hawkish (47bp priced in by year-end), but AUD has lost a bit of beta to rate expectations and is looking more sensitive to risk sentiment. That mirrors stretched long positioning, which requires a flow of positive news to fuel short-term rallies."
"We have just updated our AUD/USD forecasts, seeing 0.70 as a more likely target than 0.71 in the coming weeks. Beyond that, we remain bullish, thanks to AUD’s good carry and economic fundamentals and our expectations of a USD decline. Our year-end target is now 0.74."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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