Forex News
- USD/CAD appreciates as the commodity-linked Canadian Dollar faces challenges due to a slight decline in oil prices.
- WTI may regain ground as Trump threatened to attack Iran within days to force a war-ending deal.
- The US 30-Year Treasury Yield declines to 5.180% after hitting a near 19-year high of 5.200% on Wednesday.
USD/CAD remains stronger for the second successive day, trading around 1.3760 during the Asian hours on Wednesday. The pair appreciates as the commodity-linked Canadian Dollar (CAD) faces challenges due to a slight decline in oil prices. Canada is one of the world's largest oil producers and exporters, sending the vast majority of its supply to the United States (US). Changes in oil prices impact Canada's export revenues and terms of trade.
West Texas Intermediate (WTI) oil price halts its four-day winning streak, trading around $102.80 per barrel at the time of writing. However, crude oil prices may regain their ground due to US President Donald Trump’s renewed threat to resume military strikes on Iran within two or three days to force a deal ending the war, following a brief pause after a new proposal from Tehran. In response, an Iranian official asserted that the US threat of a massive assault would be met resolutely, stating that Iran is fully prepared to confront any military aggression.
Statistics Canada reported on Tuesday that the annual inflation rate accelerated to 2.8% in April from 2.4% in March, largely driven by higher gasoline prices. Despite the pickup, the reading came in below market forecasts of 3.1%. On a monthly basis, headline inflation rose by 0.4%, slowing down from the 0.9% increase seen in the previous month. Meanwhile, preferred measures of core inflation cooled, supporting the Bank of Canada’s (BoC) view that energy-driven price pressures may eventually fade, and easing broader market concerns over further domestic interest rate hikes.
The USD/CAD pair appreciates as the US Dollar (USD) receives support from safe-haven flows. This increase in risk aversion followed fresh threats from US President Donald Trump regarding potential military strikes on Iran. US inflation risks are also rising due to these war-driven energy price pressures, with earlier spikes in oil reinforcing expectations that the Federal Reserve may need to maintain higher interest rates for longer or even tighten policy further. Additionally, a sharp increase in Treasury yields reflects renewed market concerns that inflation could remain elevated for longer than previously anticipated.
In the fixed-income market, the US 30-Year Treasury Yield inched lower to 5.180% at the time of writing, after reaching a nearly 19-year high of 5.200% on Wednesday. In contrast, shorter-term yields maintained their upward momentum. The 10-Year Treasury Yield remained stronger near its 16-month high of 4.687%, and the 2-year yield held close to its 15-month high of 4.139%, with both of those peaks having been recorded during Tuesday's session.
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
- The Indian Rupee continues to decline due to elevated oil prices and rising US Treasury yields.
- US President Trump threatens to resume military attacks on Iran.
- The Fed will likely deliver at least one interest rate hike this year.
The Indian Rupee (INR) continues to underperform against the US Dollar (USD) on Wednesday, trading close to its fresh all-time lows. The USD/INR pair holds onto gains near 97.00 as elevated oil prices due to fears of a prolonged closure of the Strait of Hormuz remain a key drag on the Indian Rupee.
At press time, the WTI Oil price is marginally lower around $102.50, but is up over 50% since the onset of the war in the Middle East.
Currencies from economies, such as India, which rely heavily on oil imports to meet their energy needs, tend to underperform in a high-oil price environment.
Trump threatens military actions if Iran doesn’t agree to a deal
Oil prices continue to remain elevated as negotiations between the United States (US) and Iran over multiple issues, such as Tehran’s nuclear ambitions, compensation for war damages and the US blockade of Iranian seaports remain unsolved.
Iran's Deputy Foreign Minister Kazem Gharibabadi said on Tuesday that lifting sanctions, releasing frozen funds, ending blockade are major demands included in Iran's recent proposal to the US, IRNA reported.
Meanwhile, US President Donald Trump has threatened to resume military attacks on Iran if Iran doesn’t agree to a deal soon. Trump said on Tuesday that he doesn’t favor a war, but Washington can hit Iran again in the next few days.
“I hope we don’t have to do the war, but we may have to give them another big hit,” Trump told reporters on Tuesday. When asked how long he would wait, Trump said, “Well, I mean, I’m saying two or three days, maybe Friday, Saturday, Sunday. Something maybe early next week — a limited period of time.”
In response, Iran has stated that it is prepared for any military aggression. On Tuesday, a spokesperson from the Iranian army also said that Iran’s army would “open new fronts” against the US if it resumes attacks on the country.
FIIs resume selling pressure on Tuesday
After remaining net buyers for three straight trading days in the Indian stock market, the selling pressure from Foreign Institutional Investors (FIIs) has returned amid growing concerns over India’s economic outlook due to higher energy prices. On Tuesday, FIIs emerged as net sellers, paring their stake worth Rs. 2,457.49 crore. In the previous three trading days, FIIs had cumulatively bought shares worth Rs. 4,330.32 crore.
Higher US Treasury Yields diminish appeal of riskier currencies
Surging US Treasury yields due to firm expectations that the Federal Reserve (Fed) will not cut interest rates this year are also hurting risk-sensitive currencies, such as the Indian Rupee. The 10-year US bond yields have posted a fresh yearly high at 4.69% during the day.
According to the CME FedWatch tool, the odds of the Fed delivering at least one interest rate hike this year is 56.3%, while the rest almost favor a ‘hold’.
Technical Analysis:
USD/INR trades higher at around 96.85 as of writing. The pair holds well above the 20-day Exponential Moving Average (EMA) at 95.29, keeping the near-term structure firmly supported.
The 14-day Relative Strength Index (RSI) at 72.96 sits in overbought territory, suggesting bullish momentum remains strong but is becoming stretched, which could encourage brief corrective pauses rather than a clean continuation higher.
On the downside, immediate support is seen at the 20-day EMA near 95.29, where a pullback would be expected to attract dip-buying interest while the broader uptrend remains intact. A daily close back below this moving average would hint at a deeper correction toward lower levels, but as long as price holds above it, the path of least resistance stays to the upside despite overbought conditions. Looking up, the pair might aim to extend its advance towards 98.00 if it stabilizes above 97.00.
(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.
- Gold attracts some follow-through selling on Wednesday amid a broadly firmer US Dollar.
- Geopolitical uncertainties and rising Fed rate hike bets keep the USD near a six-week top.
- Traders now look to FOMC Minutes for more cues about the US central bank’s policy path.
Gold (XAU/USD) remains on the back foot through the Asian session and currently trades around the $4,470 region, just above its lowest level since March 30, touched earlier this Wednesday amid a bullish US Dollar (USD). Investors remain skeptical about a potential US-Iran peace deal. This, along with inflation fears and expectations for a more hawkish US Federal Reserve (Fed), helps the USD to preserve its recent strong gains near a six-week high and weighs on the commodity.
US President Donald Trump said on Tuesday that America may need to strike Iran again if a deal is not reached and that he had been an hour away from ordering an attack before postponing it following a request from three Gulf leaders. Meanwhile, Vice President JD Vance said the US and Iran have made a lot of progress in their talks, and neither side wants to see a resumption of the military campaign. However, doubts over a long-elusive diplomatic agreement to end the Iran conflict remain amid major disagreements over Tehran's nuclear program and the Strait of Hormuz. This continues to underpin the Greenback's reserve currency status, which is seen as a key factor acting as a headwind for the Gold price.
Meanwhile, the uncertainty fueled by the US-Iran stalemate keeps Crude Oil prices elevated near the monthly peak, fueling inflationary concerns and lifting Fed rate hike bets. According to the CME Group's FedWatch Tool, traders are now pricing in over a 55% chance that the US central bank will raise borrowing costs by at least 25 basis points (bps) in 2026. The outlook was reaffirmed by comments from Philadelphia Fed President Anna Paulson, who said that an appropriate rate increase is possible if growth exceeds potential or inflation threats arise. This led to the recent sharp increase in US Treasury bond yields, which further lends support to the buck and exerts some pressure on the non-yielding Gold price.
The USD bulls, however, seem hesitant and keenly await the release of FOMC Minutes, due later in the North American session, for more cues about the Fed's policy path. This, along with further developments surrounding the Middle East crisis, could provide some impetus to the precious metal. Nevertheless, the aforementioned fundamental backdrop seems tilted in favor of the USD bulls and suggests that the path of least resistance for the Gold price is to the downside. Hence, any recovery attempt is more likely to get sold into and runs the risk of fizzling out rather quickly.
XAU/USD daily chart
Gold bears seize control as breakdown below $4,500 comes in to play
From a technical perspective, acceptance below the $4,500 psychological mark could be seen as a fresh trigger for bearish traders and backs the case for further losses. Moreover, momentum indicators are soft, with the Relative Strength Index (RSI) hovering in the mid-30s and the Moving Average Convergence Divergence (MACD) in negative territory.
This hints that upside traction is fading even as price remains underpinned by long-term trend support near the 200-day Simple Moving Average (SMA) at roughly $4,363.73. A decisive break below this moving average would expose a deeper correction, while holding above it would allow XAU/USD to consolidate its broader uptrend despite the presently weak momentum backdrop.
(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 annual UK headline inflation is seen easing in April despite an uptick in monthly inflation.
- The UK CPI data might provide some leeway for the BoE to keep interest rates unchanged in June.
- Bearish pressure on the Pound Sterling persists, and a higher-than-expected inflation reading could intensify it.
The United Kingdom (UK) Office for National Statistics (ONS) will publish the high-impact Consumer Price Index (CPI) data for March at 06:00 GMT.
With inflation pressure high on the agenda of the central banks, April’s CPI will be analysed by the market from a monetary policy perspective, providing further insight about the Bank of England’s (BoE) next steps. In that sense, any relevant deviation from the market consensus is likely to boost near-term volatility for the British Pound (GBP).
What to expect from the next UK inflation report?
The UK Consumer Price Index is expected to show that inflation softened to 3% year-over-year (YoY) in April, from the 3.3% level seen in March, although the monthly CPI growth is seen ticking up to 0.9% from 0.7% in the previous month.
The Ofgem energy price cap, which was lowered ahead of the Iran war, seems to have cushioned the impact of the energy shock, while the unwinding of the Easter effect in prices has contributed to taming inflationary pressures.
The Core CPI, which excludes energy, food, alcohol, and tobacco prices, is expected to show that price growth from all other goods slowed down to 2.6% YoY in April, the coolest rate since July 2021, contributing to the softer CPI numbers.
Together with consumer Inflation, the Office for National Statistics will also release April’s Producer Price Index (PPI) figures, which are expected to follow suit. The PPI Input is forecast to slow down to 1% from 4.4% in March, while the PPI Output is seen ticking up to a 1% yearly rate, from 0.9% in March.
The cooling inflation, if confirmed, is likely to ease pressures on the BoE to hike interest rates immediately, which will be good news considering the increasing unemployment figures released on Tuesday. The trend, however, is unlikely to be long-lasting. Ofgem will revise the energy price cap in July, triggering a significant increase in energy bills, which is likely to be reflected in the headline CPI. The Bank of England expects consumer inflation to peak at 4% later this year.
“Though temporarily comforting, the brunt of the energy price shock will then be felt in Q3 with a potential for second-round effects in the latter half of the year,” said analysts at TD Securities.
How will the UK Consumer Price Index report affect GBP/USD?
Inflation is a key issue for the BoE’s monetary policy and, in that sense, tends to have a significant impact on the British Pound. The GBP, however, is suffering from weaknesses of its own in May, amid the growing political uncertainty after the Labour Party’s debacle in the local elections, and is likely to act as a headwind for bulls.
Bearing that in mind, a soft inflation reading might provide some support to the Pound, as it would give the BoE more time to await domestic developments and to better assess the impact of the Middle East conflict before taking any decision on interest rates. BoE Deputy Governor for Financial Stability, Sarah Breeden, warned on Monday that “political uncertainty is hitting the business environment” and advised the bank against being “trigger happy” on rates.
An upside surprise on inflation, on the contrary, would put the BoE in a challenging situation, and might increase bearish pressure on the Pound in this case.
From a technical perspective, Guillermo Alcala, FX Analyst at FXStreet, sees the Pound on the defensive after last week’s sell-off: “The GBP’s near-term bias remains bearish even after Monday’s bullish engulfing candle in the daily chart has eased negative pressure. Bulls, however, seem to need additional impulse to break a previous support level at 1.3450 and shift the focus towards the mid-May highs in the 1.3530-1.3540 area.”
“On the downside, key support is at Monday’s lows at around 1.3305. A confirmation below that level would expose late March and early April highs in the area of 1.3175,” adds Alcalá.
Economic Indicator
Consumer Price Index (YoY)
The United Kingdom (UK) Consumer Price Index (CPI), released by the Office for National Statistics on a monthly basis, is a measure of consumer price inflation – the rate at which the prices of goods and services bought by households rise or fall – produced to international standards. It is the inflation measure used in the government’s target. The YoY reading compares prices in the reference month to a year earlier. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.
Read more.Next release: Wed May 20, 2026 06:00
Frequency: Monthly
Consensus: 3%
Previous: 3.3%
Source: Office for National Statistics
The Bank of England is tasked with keeping inflation, as measured by the headline Consumer Price Index (CPI) at around 2%, giving the monthly release its importance. An increase in inflation implies a quicker and sooner increase of interest rates or the reduction of bond-buying by the BOE, which means squeezing the supply of pounds. Conversely, a drop in the pace of price rises indicates looser monetary policy. A higher-than-expected result tends to be GBP bullish.
BoE FAQs
The Bank of England (BoE) decides monetary policy for the United Kingdom. Its primary goal is to achieve ‘price stability’, or a steady inflation rate of 2%. Its tool for achieving this is via the adjustment of base lending rates. The BoE sets the rate at which it lends to commercial banks and banks lend to each other, determining the level of interest rates in the economy overall. This also impacts the value of the Pound Sterling (GBP).
When inflation is above the Bank of England’s target it responds by raising interest rates, making it more expensive for people and businesses to access credit. This is positive for the Pound Sterling because higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls below target, it is a sign economic growth is slowing, and the BoE will consider lowering interest rates to cheapen credit in the hope businesses will borrow to invest in growth-generating projects – a negative for the Pound Sterling.
In extreme situations, the Bank of England can enact a policy called Quantitative Easing (QE). QE is the process by which the BoE substantially increases the flow of credit in a stuck financial system. QE is a last resort policy when lowering interest rates will not achieve the necessary result. The process of QE involves the BoE printing money to buy assets – usually government or AAA-rated corporate bonds – from banks and other financial institutions. QE usually results in a weaker Pound Sterling.
Quantitative tightening (QT) is the reverse of QE, enacted when the economy is strengthening and inflation starts rising. Whilst in QE the Bank of England (BoE) purchases government and corporate bonds from financial institutions to encourage them to lend; in QT, the BoE stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive for the Pound Sterling.
- AUD/USD struggles to register any meaningful recovery from its lowest level since mid-April.
- Geopolitical risks and Fed rate hike bets underpin the USD, acting as a headwind for the pair.
- The technical setup favors bearish traders and backs the case for a further depreciating move.
The AUD/USD pair remains on the defensive through the Asian session on Wednesday and currently trades around the 0.7100 mark, just above its lowest level since April 14, touched the previous day.
Traders have ramped up their bets for an interest rate hike by the US Federal Reserve (Fed) amid worries that the Iran war-led surge in energy prices would rekindle inflationary pressures. This assists the US Dollar (USD) in preserving its recent strong gains to a six-week high, offsetting the Reserve Bank of Australia's (RBA) hawkish stance and weighing on the AUD/USD pair.
Spot prices keep a bearish near-term tone following the overnight fall below the 200-period Exponential Moving Average (EMA) on the 4-hour chart and the 38.2% Fibonacci retracement level of the March-May upswing. Furthermore, the Moving Average Convergence Divergence (MACD) histogram is marginally negative while the line sits below the signal and the zero line.
This, in turn, reinforces persistent downside pressure even as the Relative Strength Index (RSI) hovers in oversold territory near 28, hinting that any rebounds would likely be corrective. Meanwhile, initial support aligns with the 50.0% retracement near 0.7059, ahead of a deeper cushion at the 61.8% Fibo. around 0.7008, with broader structural floors seen at 0.6935 and 0.6843.
On the topside, a recovery would first need to overcome the 38.2% retracement at 0.7110, with further resistance emerging at the 200-period EMA near 0.7153 and the 23.6% retracement at 0.7173. Only a move toward the cycle high region around 0.7275 would start to ease the broader bearish bias and set the stage for the resumption of the prior well-established uptrend.
(The technical analysis of this story was written with the help of an AI tool.)
AUD/USD 4-hour chart
US Dollar Price Last 7 Days
The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 1.20% | 1.11% | 0.95% | 0.46% | 1.99% | 2.11% | 1.18% | |
| EUR | -1.20% | -0.10% | -0.33% | -0.75% | 0.81% | 0.93% | -0.04% | |
| GBP | -1.11% | 0.10% | -0.26% | -0.66% | 0.85% | 1.01% | 0.04% | |
| JPY | -0.95% | 0.33% | 0.26% | -0.41% | 1.11% | 1.18% | 0.26% | |
| CAD | -0.46% | 0.75% | 0.66% | 0.41% | 1.54% | 1.60% | 0.70% | |
| AUD | -1.99% | -0.81% | -0.85% | -1.11% | -1.54% | 0.11% | -0.84% | |
| NZD | -2.11% | -0.93% | -1.01% | -1.18% | -1.60% | -0.11% | -0.94% | |
| CHF | -1.18% | 0.04% | -0.04% | -0.26% | -0.70% | 0.84% | 0.94% |
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).
- AUD/JPY softens to near 112.90 in Wednesday’s early European session.
- The cross keeps a bullish vibe, but further consolidation cannot be ruled out as RSI has cooled below the midline.
- The first upside barrier emerges at 113.65; the initial support level to watch is 112.45.
The AUD/JPY cross loses traction to around 112.90 during the early European session on Wednesday. Japan's stronger-than-expected Gross Domestic Product (GDP) growth data for the first quarter (Q1) underpins the Japanese Yen (JPY) against the Australian Dollar (AUD).
The Japanese economy grew at an annualized 2.1% in Q1 of 2026, according to preliminary Cabinet Office data released on Tuesday. This figure followed 1.3% growth prior, above the market consensus of 1.7%. Meanwhile, Japan’s GDP expanded 0.5% QoQ in Q1, compared to a 0.3% growth seen in Q4 of 2025. This figure came in stronger than the expectation of a 0.4% expansion.
On the Aussie front, the Reserve Bank of Australia (RBA) minutes showed on Tuesday that eight of nine board members backed the May rate hike to 4.35%, citing rising inflation risks from the Gulf conflict. One member preferred to await further data.
However, RBA Meeting Minutes highlighted growing concerns that global energy shocks and Middle East tensions could fuel domestic inflation and hurt broader economic growth. This, in turn, might cap the upside for the AUD against the JPY.
Technical Analysis:
In the daily chart, AUD/JPY holds well above the 100-day simple moving average (SMA), keeping the broader structure constructive despite price now sitting just under the Bollinger middle band, which acts as the first cap. A softening Relative Strength Index (RSI) around 46 hints that upside momentum has cooled without yet overturning the prevailing uptrend.
On the topside, initial resistance is seen at the Bollinger middle band near 113.65, with the upper band around 114.88 marking a stronger barrier if bulls regain control. On the downside, immediate support is seen at the lower Bollinger band at 112.45, ahead of the March13 low of 111.47, while the 100-day SMA at 110.52 remains a deeper but important floor guarding the broader bullish bias.
(The technical analysis of this story was written with the help of an AI tool.)
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
Gold prices fell in India on Wednesday, according to data compiled by FXStreet.
The price for Gold stood at 13,950.13 Indian Rupees (INR) per gram, down compared with the INR 13,997.97 it cost on Tuesday.
The price for Gold decreased to INR 162,713.20 per tola from INR 163,269.60 per tola a day earlier.
Unit measure | Gold Price in INR |
|---|---|
1 Gram | 13,950.13 |
10 Grams | 139,502.10 |
Tola | 162,713.20 |
Troy Ounce | 433,904.20 |
FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
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.
(An automation tool was used in creating this post.)
- Silver struggles as the Strait of Hormuz closure keeps oil higher, boosting global inflation and prolonged higher rates globally.
- Trump threatened to attack Iran within days to force a war-ending deal following a brief pause.
- The US 30-Year Treasury Yield declines to 5.181% after hitting a near 19-year high of 5.200% on Wednesday.
Silver price (XAG/USD) remains flat after registering 5.18% losses in the previous day, hovering around $73.70 per troy ounce during the Asian hours on Wednesday. The white metal struggled as the prolonged United States (US)-Iran conflict has effectively kept the vital Strait of Hormuz closed to shipping traffic. This disruption has pushed oil prices higher, adding to inflationary pressures and increasing the likelihood of higher interest rates globally.
Geopolitical tensions escalated further as US President Donald Trump recently threatened to resume attacks on Iran within two or three days to force a deal ending the war, following a brief pause after a new proposal from Tehran. In response, an Iranian official asserted that the US threat of a massive assault would be met resolutely, stating that Iran is fully prepared to confront any military aggression.
These war-driven energy price pressures have significantly increased inflation risks in the United States, which have reinforced expectations that the Federal Reserve (Fed) may need to maintain higher interest rates for longer or even tighten monetary policy further. Additionally, a sharp increase in yields reflects renewed market concerns that inflation could remain elevated for longer than previously anticipated.
In the bond market, the US 30-Year Treasury Yield inched lower to 5.181% after reaching a nearly 19-year high of 5.200% on Wednesday. Meanwhile, shorter-term yields maintained their upward momentum, with the 10-Year Treasury Yield remaining stronger near its 16-month high of 4.687% and the 2-year yield holding near its 15-month high of 4.139%, both recorded on Tuesday.
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.
- GBP/JPY struggles to lure buyers as UK political uncertainty continues to undermine the GBP.
- Intervention fears prompt some JPY short-covering and also contribute to the pair’s downtick.
- The downside remains cushioned as traders await the release of UK consumer inflation figures.
The GBP/JPY cross remains depressed for the second consecutive day on Wednesday, though it lacks follow-through selling and holds above the previous day's swing low. Spot prices currently trade below the 213.00 mark, down just over 0.10% for the day, as traders opt to wait for the latest UK consumer inflation figures before placing fresh directional bets.
The crucial UK Consumer Price Index (CPI) report for April will be analysed from a monetary policy perspective, which would provide further insight about the Bank of England’s (BoE) next steps. Hence, any relevant deviation from the market consensus is likely to boost near-term volatility for the British Pound (GBP) and provide some meaningful impetus to the GBP/JPY cross.
Heading into the key data risk, the UK political uncertainty, amid serious leadership challenges to Prime Minister Keir Starmer, and a bullish US Dollar (USD) weigh on the GBP. The Japanese Yen (JPY), on the other hand, draws support from speculations that authorities will step in again to support the domestic currency, exerting some downward pressure on the GBP/JPY cross.
The JPY, however, lacks bullish conviction amid economic concerns stemming from the Middle East conflict. Investors seem worried that Japan's economy will come under strain in the foreseeable future amid the continued disruption of energy supplies through the Strait of Hormuz. This, in turn, holds back traders from placing aggressive bearish bets around the GBP/JPY cross.
Hence, it will be prudent to wait for strong follow-through selling before positioning for any further depreciating move for the currency pair. Bulls, on the other hand, might struggle to make it through the 214.00 pivotal hurdle. A sustained strength beyond the latter, however, should allow the GBP/JPY cross to build on last week's solid recovery from the 211.00 neighborhood.
Economic Indicator
Core Consumer Price Index (YoY)
The United Kingdom (UK) Core Consumer Price Index (CPI), released by the Office for National Statistics on a monthly basis, is a measure of consumer price inflation – the rate at which the prices of goods and services bought by households rise or fall – produced to international standards. The YoY reading compares prices in the reference month to a year earlier. Core CPI excludes the volatile components of food, energy, alcohol and tobacco. The Core CPI is a key indicator to measure inflation and changes in purchasing trends. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.
Read more.Next release: Wed May 20, 2026 06:00
Frequency: Monthly
Consensus: 2.6%
Previous: 3.1%
Source: Office for National Statistics
The Bank of England is tasked with keeping inflation, as measured by the headline Consumer Price Index (CPI) at around 2%, giving the monthly release its importance. An increase in inflation implies a quicker and sooner increase of interest rates or the reduction of bond-buying by the BOE, which means squeezing the supply of pounds. Conversely, a drop in the pace of price rises indicates looser monetary policy. A higher-than-expected result tends to be GBP bullish.
Forex Market News
Our dedicated focus on forex news and insights empowers you to capitalise on investment opportunities in the dynamic FX market. The forex landscape is ever-evolving, characterised by continuous exchange rate fluctuations shaped by vast influential factors. From economic data releases to geopolitical developments, these events can sway market sentiment and drive substantial movements in currency valuations.
At Rakuten Securities Hong Kong, we prioritise delivering timely and accurate forex news updates sourced from reputable platforms like FXStreet. This ensures you stay informed about crucial market developments, enabling informed decision-making and proactive strategy adjustments. Whether you’re monitoring forex forecasts, analysing trading perspectives, or seeking to capitalise on emerging trends, our comprehensive approach equips you with the insights needed to navigate the FX market effectively.
Stay ahead with our comprehensive forex news coverage, designed to keep you informed and prepared to seize profitable opportunities in the dynamic world of forex trading.
