Forex News
- USD/JPY attracts some sellers as JPY bears turn cautious amid intervention fears.
- Iran diplomacy hopes prompt some USD profit-taking and also weigh on the pair.
- The fundamental backdrop backs the case for the emergence of some dip-buying.
The USD/JPY pair drifts lower during the Asian session on Friday, stalling its recent strong move up to a three-week high, near the 159.00 mark, touched the previous day. Nevertheless, spot prices remain on track to register strong gains for the second week in a row and currently trade just above mid-158.00s, down around 0.20% for the day.
Intervention risk re-emerged as a two-week-long slide drags the Japanese Yen (JPY) back toward the critical 160.00 psychological threshold against its American counterpart. Furthermore, the US Dollar (USD) pauses for a breather following the recent strong move up to a nearly two-month high. This prompts bullish traders to take some profits off the table, exerting some pressure on the USD/JPY pair.
Meanwhile, the USD pullback comes amid reports that the US and Iran were exploring a phased deal to reopen the Strait of Hormuz. However, a Houthi missile attack on Saudi Arabia keeps geopolitical risks elevated, fueling oil-driven inflation fears. This, along with the hawkish Federal Reserve (Fed), continues to push US bond yields to multi-year highs, supporting the USD and the USD/JPY pair.
Moreover, the interest rate gap between the US and Japan remains wide, at roughly 250 to 275 basis points (bps). This should keep the so-called JPY carry trade in play, which should contribute to limiting the downside for the USD/JPY pair. Hence, any further slide is likely to be bought into and remain limited. Traders now look to the US macro data and Fed speeches for some impetus heading into the weekend.
USD/JPY 4-hour chart
Technical Analysis
The USD/JPY pair maintains a bullish near-term bias following the overnight breakout above the 200-period Simple Moving Average (SMA) on the 4-hour chart and the 50.0% Fibonacci retracement. The latter is located at 158.45 and should offer immediate support, ahead of the 200-period SMA at 157.59.
On the topside, immediate resistance is seen at the 61.8% Fibo. retracement at 159.76, followed by the 78.6% retracement at 161.62, with the cycle high zone at 163.99 acting as a broader cap.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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 New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.02% | 0.01% | -0.30% | 0.03% | -0.02% | 0.06% | 0.06% | |
| EUR | -0.02% | 0.00% | -0.32% | 0.01% | -0.05% | 0.02% | 0.02% | |
| GBP | -0.01% | -0.00% | -0.31% | 0.02% | -0.04% | 0.04% | 0.03% | |
| JPY | 0.30% | 0.32% | 0.31% | 0.34% | 0.27% | 0.34% | 0.34% | |
| CAD | -0.03% | -0.01% | -0.02% | -0.34% | -0.07% | 0.00% | 0.00% | |
| AUD | 0.02% | 0.05% | 0.04% | -0.27% | 0.07% | 0.08% | 0.07% | |
| NZD | -0.06% | -0.02% | -0.04% | -0.34% | -0.00% | -0.08% | 0.00% | |
| CHF | -0.06% | -0.02% | -0.03% | -0.34% | -0.00% | -0.07% | -0.00% |
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).
- AUD/USD trades flat near 0.7010 in Friday’s early Asian session.
- China’s Xi said Washington-Beijing ties reach a new historical milestone; major breakthroughs are not expected.
- The RBA is expected to raise its Official Cash Rate next week.
The AUD/USD pair holds steady around 0.7010 during the early Asian trading hours on Friday. Traders continue to assess the developments surrounding the US President Donald Trump and Chinese President Xi Jinping summit at the White House.
Xi Jinping said on Thursday that the US-China ties reached a new historical milestone, saying that they reached broad agreement on numerous issues and a new arrangement after trade talks is good news. A Chinese leader added that Beijing and Washington must find a proper way to coexist peacefully and act as partners rather than rivals, per the Financial Times.
On Thursday, US Treasury Secretary Scott Bessent said that the US and China have agreed to extend a bilateral trade truce that was set to expire in November through January 10.
However, markets see the summit was heavy on symbolism but light on substance, with no sign of breakthroughs on thorny issues such as AI, trade, Taiwan and the war with Iran. Any progress on US-China trade talks could provide some support to the China-proxy Aussie, as China is a major trading partner of Australia.
Australia’s Unemployment Rate climbed to 4.6% in August from 4.5% in July, the Australian Bureau of Statistics showed on Thursday. This report is a crucial piece of the economic puzzle ahead of the Reserve Bank of Australia (RBA) rate decision next week.
It also followed RBA Governor Michele Bullock saying the jobless rate needs to rise for inflation to fall. The market is widely expecting a 25-basis-point RBA rate hike next week, and Thursday’s slight unemployment increase is unlikely to stay the RBA’s hand.
Australia jobs data keeps RBA tightening narrative intact
Brown Brothers Harriman’s Elias Haddad points out that the latest Australia labor force figures were mixed, with the “unemployment rate unexpectedly rose 0.1ppt to 4.6%, which was above consensus and RBA year-end projection of 4.5%.” He stresses, however, that this apparent deterioration in headline joblessness is largely a function of stronger labor supply, noting that “the increase in the jobless rate largely reflects a higher participation rate suggesting some tightness in the labor market persists.” In Haddad’s view, the underlying resilience of labor demand, despite the uptick in unemployment, supports the case for further RBA tightening and underpins the constructive medium-term outlook for the Aussie.
Technical Analysis: AUD/USD
In the daily chart, AUD/USD keeps a bearish near-term tone as spot holds below the 100-day moving average (MA) and the Bollinger middle band. Price is pressing the lower end of the Bollinger envelope, with the lower band now acting as immediate overhead resistance, while the Relative Strength Index (14) at 32.7 hovers near oversold territory, hinting that downside momentum is stretched but not yet reversed.
On the topside, initial resistance is aligned at the Bollinger lower band at 0.7015, followed by the 100-day MA at 0.7070, ahead of a denser cap at the Bollinger middle band near 0.7138; a sustained break above these layers would be needed to ease the current bearish pressure. Further up, the Bollinger upper band at 0.7260 marks a more distant barrier. With no clear structural supports printed below the market in this dataset, AUD/USD remains vulnerable to additional weakness while it trades beneath these clustered resistance levels.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
Japanese Finance Minister (FM) Satsuki Katayama said on Friday that the latest rate hike from the Bank of Japan (BoJ) was done to achieve the inflation target. Katayama added that she expects the central bank to conduct appropriate monetary policy while coordinating with the government.
Key quotes
Specific monetary policy tools are up to BoJ to decide.
BoJ's latest rate hike was done to achieve inflation target.
Expect BOJ to conduct appropriate monetary policy while coordinating with the government.
Won't comment on specific FX levels, rate checks.
Trump expressed concerns about weak yen during summit.
Will closely coordinate with us on forex.
PM Takaichi expressed concern over yen weakness in general.
Market reaction
At the time of writing, the USD/JPY pair is down 0.24% on the day at 158.48.
Bank of Japan FAQs
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
- Canadian Dollar declines as oil prices drop on reports of US-Iran talks to reopen the Strait of Hormuz.
- Geopolitical standoffs persist as Iran demands an end to port blockades while the US maintains its firm stance.
- US Dollar strengthens as CME FedWatch data shows a 67.5% chance of an October rate hike.
USD/CAD extends its gains for the fifth consecutive day, trading around 1.4140 during Asian hours on Friday. The pair appreciates as the commodity-linked Canadian Dollar (CAD) faces downward pressure from falling crude oil prices.
Crude oil prices drop after reports that the United States (US) and Iran are considering a phased agreement to reopen the Strait of Hormuz and lift the US blockade on Iranian ports. Mediated by Qatari officials, these breakthrough discussions were reportedly initiated on the sidelines of the United Nations General Assembly.
However, both nations maintain firm positions. Iran refuses to enter any agreement or relinquish control over the Strait of Hormuz unless the US lifts its port blockade and reduces military pressure. On the other side, a White House official noted that while President Donald Trump remains open to negotiations, the US feels little pressure to concede due to its strong standing following the sanctions campaign.
Concurrently, the USD/CAD pair is gaining momentum as the US Dollar (USD) strengthens, driven by hawkish signals from Federal Reserve officials. Financial markets have responded accordingly: data from the CME FedWatch Tool indicates that the likelihood of an October benchmark rate hike has jumped to nearly 67.5%, a noticeable increase from 55.4% a week prior and just 11% a month ago.
Fed’s Paulson flags risk of further rate hikes as inflation stays stubborn
Fed’s Paulson delivered a distinctly hawkish message, with an FXS Speechtracker score of 8.1/10, notably stronger relative to the historical average of 7/10. Emphasizing that the US central bank may need to raise interest rates again, Paulson framed the September hike as moving policy into a more effective inflation-fighting stance, while stressing that underlying inflation remains “stubbornly high” and that the best that can be said is that it has not worsened. References to the AI buildout as a source of inflation pressures, alongside a resilient economy and stable labor market, reinforce a bias toward further tightening to restore inflation to 2%.
The FXS Fed Sentiment Index was unchanged, moving 0.00 points and holding at a high 148.18, firmly in hawkish territory according to the FXS Speechtracker framework. The static but elevated reading signals that Paulson’s remarks are consistent with an already entrenched hawkish stance at the Federal Reserve, rather than a fresh escalation in perceived policy aggression.
Technical Analysis:
In the daily chart, USD/CAD trades at 1.4140, extending its advance above both the nine-period Exponential Moving Averages (EMAs) at 1.4048 and the 50-period EMA at 1.3955, which together underpin a firm bullish near-term bias. The short-term EMA has crossed well above the longer one, reinforcing an upward trend structure, while the 14-day Relative Strength Index (RSI) at 72.64 sits in overbought territory, hinting that upside momentum is strong but increasingly stretched.
On the downside, initial support emerges at the nine-period EMA, with a deeper cushion at the 50-period EMA should a corrective pullback unfold. As long as USD/CAD holds above these moving average supports, the broader topside bias remains intact, although the elevated RSI warns that the pair could be vulnerable to bouts of profit-taking before fresh buying interest resumes.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
- GBP/USD holds steady during the Asian session as the USD pauses for a breather near a two-month top.
- The hawkish Fed and oil-driven inflation fears lift US bond yields to multi-year highs, favouring USD bulls.
- The divergent Fed-BoE outlooks further warrant caution before placing bullish bets on the currency pair.
The GBP/USD pair edges higher during the Asian session on Friday, trading above its lowest level since June 29, around the 1.3200 neighborhood, touched the previous day. Meanwhile, the fundamental backdrop seems tilted in favor of bearish traders and warrants caution before positioning for any meaningful recovery.
The US Dollar (USD) pauses for a breather following the recent strong rally to a nearly two-month high and turns out to be a key factor offering some support to the GBP/USD pair. However, the US Federal Reserve's (Fed) hawkish outlook, elevated US bond yields, and persistent geopolitical uncertainties favor USD bulls. Furthermore, the Bank of England's (BoE) more cautious holding or gradual easing bias amid stagflation fears suggests that the path of least resistance for the currency pair is to the downside.
According to the CME Group's FedWatch Tool, traders are now pricing in over a 65% chance that the US central bank will raise borrowing costs again in October following the recent 25 basis points (bps) rate hike earlier this month. Adding to this, oil-driven inflation fears underpin prospects for further Fed tightening and continue to push US bond yields to multi-year highs. This, in turn, validates the positive outlook for the buck, suggesting that the GBP/USD pair might attract fresh sellers at higher levels.
Traders now look forward to BoE Governor Andrew Bailey's scheduled speech for more cues about the future policy path, which will drive the British Pound (GBP). Later during the North American session, traders will take cues from the US macro data – Durable Goods Orders and the revised University of Michigan Consumer Sentiment Index. Moreover, comments from influential FOMC members should provide some impetus to the USD and produce trading opportunities around the GBP/USD pair.
GBP/USD daily chart
Technical Analysis
The GBP/USD pair continues to trade under the longer-term 200-day Simple Moving Average (SMA), which suggests that rallies are likely to be capped while sellers stay in control. The said SMA, at 1.3452, acts as the primary overhead barrier that bulls would need to reclaim to ease the current bearish tone.
On the downside, a break below 1.3300 would expose the year-to-date low, around 1.3265, touched in June. Some follow-through selling will be seen as a fresh trigger for bearish traders and pave the way for a further near-term depreciating move.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.95% | 1.30% | 1.17% | 1.10% | 1.44% | 1.06% | 0.70% | |
| EUR | -0.95% | 0.36% | 0.23% | 0.15% | 0.49% | 0.11% | -0.25% | |
| GBP | -1.30% | -0.36% | -0.23% | -0.21% | 0.12% | -0.25% | -0.61% | |
| JPY | -1.17% | -0.23% | 0.23% | -0.03% | 0.26% | -0.10% | -0.45% | |
| CAD | -1.10% | -0.15% | 0.21% | 0.03% | 0.40% | -0.06% | -0.39% | |
| AUD | -1.44% | -0.49% | -0.12% | -0.26% | -0.40% | -0.38% | -0.80% | |
| NZD | -1.06% | -0.11% | 0.25% | 0.10% | 0.06% | 0.38% | -0.35% | |
| CHF | -0.70% | 0.25% | 0.61% | 0.45% | 0.39% | 0.80% | 0.35% |
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 softens to around 1.1375 in Friday’s early Asian session.
- Traders are pricing in roughly a 67.5% chance that the Fed will increase rates again at its October meeting.
- Iran’s President said the US ‘must choose’ whether to end the war.
The EUR/USD pair trades with mild losses near 1.1375 during the early Asian trading hours on Friday. The US Dollar (USD) strengthens against the Euro (EUR) amid hawkish signals from the Federal Reserve (Fed) officials and a lack of progress between the US-Iran talks. Traders brace for the Fedspeak later on Friday.
The 30-year US Treasury bond yield reached a high of 5.501%, a level not seen since June 2004, while the US 10-year Treasury yield climbed to 5.223%, a level not reached since June 2007. Traders raise their bets on another Federal Reserve rate hike as oil prices rise, the US economy remains resilient, and Fed policymakers deliver hawkish remarks.
Philadelphia Fed President Anna Paulson said on Thursday that additional tightening could be needed if the economy continues to evolve as expected. She added that inflation remains well above the Fed's 2% target.
According to the CME FedWatch tool, markets are now pricing in nearly a 67.5% odds of an October benchmark rate hike, up from 55.4% a week earlier and 11% a month earlier.
Meanwhile, talks between the United States (US) and Iran showed little sign of progress. Iranian President Masoud Pezeshkian said that it is for the US to decide whether to end its war against the Islamic Republic, as Tehran does not wish to continue fighting, per Fox News. However, negotiations are stalling as neither side wants to surrender its leverage, according to comments to Reuters from two Iranian sources.
Uncertainty surrounding the US-Iran negotiation and ongoing Middle East conflicts could boost safe-haven flows, supporting the Greenback and acting as a headwind for the major pair.
Euro stays soft as spreads widen despite improving German sentiment
Strategists at Scotiabank note that the Euro “retains a soft undertone,” with price action still reflecting “the sustained widening in front-end spreads on the one hand and ongoing EU concerns about the impact of a potential US export ban of diesel on the other (despite US denials yesterday that it would not pursue a 90-day ban).” On the data front, they highlight that Germany’s IFO survey “improved a little more than expected in September, with the Business Climate Index firming to 89.9 and Expectations rising to 90.4.” Scotiabank adds that “the IFO sentiment data has diverged (unusually) from German GDP since 2024,” but the “lag remains apparent” and “improved sentiment aligns somewhat better with firming growth trends in the economy.”
Fed's Hammack flags upside inflation risks, keeping Dollar bulls alert
Fed's Hammack delivers a firmly hawkish message, with a FXS Speechtracker score of 7.4/10, only slightly softer relative to the historical average of 7.6/10. Emphasis that "price stability is responsibility of central banks" alongside warnings that inflation remains elevated amid solid demand and risks are tilted to the upside underscores a strong commitment to restrictive policy. The caution that prolonged high inflation becomes harder to tame reinforces expectations that the Fed will resist premature easing, a backdrop typically supportive for the Dollar.
The FXS Fed Sentiment Index slipped by 0.46 points to 148.18, signaling a modest pullback in hawkish intensity compared to recent communications. However, with the index still deep in hawkish territory well above the 100 neutral mark, the overall policy tone remains restrictive despite the slight softening captured by the FXS Speechtracker.
Technical Analysis: EUR/USD keeps a bearish vibe amid oversold condition
In the daily chart, EUR/USD extends its slide below the 20-day Bollinger middle band and the 100-day simple moving average (SMA), both acting as a cap on the topside. This location under key daily averages reinforces a bearish near-term bias, even as the latest Relative Strength Index (RSI) reading at 25.13 signals oversold conditions that could slow the downside rather than reverse it decisively.
On the downside, immediate support is offered by the lower Bollinger Band at 1.1355, where selling pressure could pause. On the topside, initial resistance is seen at the 100-day SMA at 1.1532, followed closely by the 20-day Bollinger middle band at 1.1535, while a more significant barrier emerges at the upper Bollinger Band near 1.1715, which would cap any deeper corrective bounce for now.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- WTI falls as Qatari-mediated US-Iran talks sparked hopes of reopening the Strait of Hormuz.
- Iran demanded a blockade end, while the White House noted little pressure to negotiate despite open dialogue.
- Oil prices may rebound after Saudi Arabia intercepted six Houthi ballistic missiles targeting major regional cities.
West Texas Intermediate (WTI) oil price declines after two days of gains, trading around $92.60 per barrel during Asian hours on Friday. Crude oil prices depreciated amid reports that the United States (US) and Iran were considering a phased deal to reopen the Strait of Hormuz and lift a US blockade on Iranian ports. Mediated by Qatari officials, these efforts to reach a breakthrough were reportedly underway on the sidelines of the United Nations (UN) General Assembly.
Despite these talks, both nations maintained firm positions. Iran insisted on retaining control over the Strait of Hormuz, refusing any agreement unless the US eases military pressure and lifts the port blockade. Meanwhile, a White House official stated that President Donald Trump remained open to discussions, though he emphasized that the US felt little pressure to negotiate given its strong position following the sanctions campaign.
However, oil prices may soon rebound as Middle East tensions continue to escalate. Iran-aligned Houthi militants in Yemen recently launched missiles targeting Saudi cities, including Yanbu and Taif. The Saudi-led coalition in Yemen confirmed that Saudi Arabia intercepted six of these ballistic missiles.
US energy surplus cushions manufacturers from Strait of Hormuz risks
Analysts at ING warn that “restrictions on shipping through the Strait of Hormuz have raised concerns about energy shortages, higher prices and potential production disruption for manufacturers globally.” However, they argue that the US is “better positioned to manage those challenges than European and Asian competitors,” noting that the country “produces more energy than it consumes,” which offers a meaningful buffer against supply disruptions and price spikes affecting international peers.
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.
Chinese President Xi Jinping stated during his visit to Washington that Beijing and Washington must find a proper way to coexist peacefully and act as partners rather than rivals, the Financial Times reported on Thursday.
Xinhua news agency reported that Trump and Xi confirmed that they would support each other in hosting the APEC Economic Leaders meeting and the G20 Summit in 2026.
Key quotes
China and the United States . . . stand to gain from co-operation and will both lose in confrontation.
Our competition should be a healthy one, and should be kept within bounds. It should be a race of catching up with one another, not a wrestle in which one either wins or loses.
Seek new method for major powers to coexist peacefully.
Major powers should demonstrate responsibility.
US-China ties reach new historical milestone.
Reached broad agreement on numerous issues.
Had a candid and thorough exchange with Trump.
New arrangement after China-US trade talks is good news.
Had a candid and thorough exchange with Trump.
Market reaction
At the time of writing, the AUD/USD pair is down 0.05% on the day at 0.7000.
US-China Trade War FAQs
Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.
An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.
The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.
Yemen's Houthi claimed on Thursday that it launched dozens of ballistic missiles and drones at Saudi military installations in the kingdom's southwestern Jazan region, the Saudi-led coalition in Yemen said were aimed at Taif in western Saudi Arabia and the Yanbu area on the Red Sea.
Houthi military spokesman Yahya Saree stated that the operation targeted command-and-control centers, operations rooms and weapons depots in the Al-Tuwal area of Jazan, along with missile launch sites at Al-Daghareer camp and other Saudi military camps in the region.
Saudi Arabia's Civil Defense said later that the danger had passed in Mecca, Taif and the northwestern Tabuk region, after emergency warnings had been issued earlier for those areas as well as Jeddah, Yanbu, and Jazan.
The Saudi Arabia Foreign Ministry said early Friday that Saudi, Turkey, and Pakistan will hold an urgent chiefs of staff meeting on backing Riyadh under a joint defense pact. Saudi’s Foreign Minister Prince Faisal bin Farhan bin Abdullah added that the kingdom, Turkey and Pakistan affirm Riyadh’s right to defend itself under the United Nations (UN) charter.
Market reaction
At the time of writing, the West Texas Intermediate (WTI) is up 0.80% on the day at $92.86.
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.
Iranian President Masoud Pezeshkian said that it is for the United States (US) to decide whether to end its war against the Islamic Republic, as Tehran does not wish to continue fighting, Fox News reported on Thursday.
“When we can resolve issues through dialog, we shouldn’t resort to killing one another. But with the instigations conducted by Israel, they have imposed this war on us,” said Pezeshkian. “But we do not wish to continue,” Pezeshkian adds. “It’s America that must choose whether it wants to end this or not.”
A senior Iranian official said the most possible way to end the conflict would be a phased arrangement, with Iran allowing navigation through the Strait of Hormuz in return for the US lifting its economic blockade and Tehran potentially gaining access to frozen assets.
Elsewhere, In his speech at the United Nations General Assembly, Qatar categorically rejected Prime Minister Benjamin Netanyahu's claim that it is conducting an influence campaign against Israel, stating that "his attacks are an effort to divert attention from his political responsibility for policies on the ground."
Market reaction
At the time of writing, the West Texas Intermediate (WTI) is up 0.80% on the day at $92.86.
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.
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