Forex News
- Oil prices pull back from highs beyond 106.00 in speculation of a ceasefire in Iran.
- US and Iran have received a plan to end the hostilities immediately.
- Oil prices remain above the key $100.00 level, with investors in a cautious mood.
US benchmark West Texas Intermediate Oil (WTI) depreciated about $5 from session highs on Monday, hitting lows near $101.00 per barrel, from $106.44 highs, weighed by news that the US and Iran might be bringing positions closer to a peace deal through international intermediaries.
A Reuters report released on Monday confirms that Iran and the US have received a framework for a 45-day ceasefire that might end the conflict immediately, and lead to an upcoming reopening of the Strait of Hormuz. The market has reacted with a moderate risk appetite, sending Oil prices lower.
Before that, US President Donald Trump threatened Tehran with destroying Iran’s bridges and energy sites, if they failed to reopen the Hormuz by Tuesday, 8 PM Easter time (00:00 GMT). This raised concerns of Iranian retaliation targeting US industries in the Middle East and provided an additional boost to Oil prices during the early Asian session.
Crude prices have appreciated about 50% since Tehran closed the Strait of Hormuz, a critical gateway for about one-fifth of the global Oil supply, during the first weeks of the war, bringing the global economy to the brink of collapse.
This weekend, the OPEC countries and allies have agreed on raising their output quotas by 206K barrels per day in May, but the impact on prices has been minimal. The market has taken the agreement in stride, as the closure of Hormuz and the damage to oilfields in the Gulf area seriously hamper the possibility of achieving that goal.
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.
Silver prices (XAG/USD) rose on Monday, according to FXStreet data. Silver trades at $73.53 per troy ounce, up 0.67% from the $73.05 it cost on Friday.
Silver prices have increased by 3.45% since the beginning of the year.
Unit measure | Silver Price Today in USD |
|---|---|
Troy Ounce | 73.53 |
1 Gram | 2.36 |
The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 63.95 on Monday, down from 64.04 on Friday.
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.
(An automation tool was used in creating this post.)
OCBC strategists Sim Moh Siong and Christopher Wong highlight that higher Oil prices and safe-haven flows have re-anchored the Dollar, reversing expectations for a steady USD decline. They now see a stronger USD in coming months, with DXY drifting slightly lower over the next year but remaining supported by resilient US growth, a stabilising labour market and a higher-for-longer Fed stance.
Oil shock shifts Dollar trajectory
"Oil Re-anchors USD: We have revised our FX outlook to favour a stronger USD in the near term. At the start of the year, we expected a gradual USD decline, driven by US policy uncertainty, improving global growth, and stretched valuations. The sharp rally in oil has upended that view and reasserted USD support."
"The March US employment report surprised to the upside, pointing to a stabilising labour market. That reduces the likelihood of further Fed easing and favours an extended policy hold, consistent with the hawkish repricing of rate expectations since the onset of the US–Iran conflict."
"Over the past week, sentiment improved on de-escalation hope. Brent retreated from early-week highs near USD119/bbl, hawkish central bank rate expectations were pared back, and the USD traded mixed versus G10 peers."
"Should credible de-escalation emerge, we expect the USD to resume a shallow depreciation trend, as easing energy risks would favour non-US economies and global risk assets."
"A softer USD remains possible later in the year if oil prices fall meaningfully in 2H26. Even then, downside should be contained. US growth remains resilient, and the USD has recently reaffirmed its safe-haven role—offsetting, rather than amplifying, equity drawdowns."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Silver gains support on easing Fed hawkish sentiment, following reports suggesting potential Middle East ceasefire prospects.
- US and Iran received a two-step ceasefire plan, but Tehran refuses to reopen the Strait of Hormuz temporarily.
- Fed may delay rate cuts and could raise borrowing costs later this year if inflation remains persistently elevated.
Silver price (XAG/USD) holds gains after recovering daily losses, trading around $73.30 per troy ounce during the European hours on Monday. Non-interest-bearing Silver finds support as traders price in easing hawkish odds surrounding the Federal Reserve (Fed) outlook, following reports pointing to potential Middle East ceasefire prospects. News of US-Iran talks has pressured oil prices, helping to ease inflation concerns.
The United States and Iran have received a proposed framework to end hostilities, featuring a two-step plan with an immediate ceasefire followed by a broader agreement. Pakistan’s army chief, Asim Munir, has reportedly been in continuous contact with US Vice President JD Vance, special envoy Steve Witkoff, and Iranian Foreign Minister Abbas Araghchi. However, Tehran stated it would not reopen the Strait of Hormuz under a temporary ceasefire arrangement, according to Reuters.
Earlier, Bloomberg, citing Axios, reported that the US, Iran, and regional mediators are discussing terms for a potential 45-day ceasefire, following US President Donald Trump's warning that he would bring “hell” to Tehran if no deal is reached.
However, markets may continue to price in the Fed delaying rate cuts, with the possibility of higher borrowing costs later this year if inflation persists. Investors now await the latest Federal Open Market Committee Meeting Minutes for clearer guidance on the policy outlook.
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.
- NZD/USD trims losses and returns to 0.5720 as market sentiment improves.
- Hopes of a peace deal in Iran are weighing on the safe-haven USD.
- The Kiwi starts showing signs of a potential recovery.
The New Zealand Dollar (NZD) is capitalising on a moderate US Dollar (USD) weakness on a calm trading session, with most markets closed on Easter Monday. The pair has extended its rebound from four-month lows near 0.5680 earlier on the day to 0.5720, although the broader downward trend remains intact so far.
Risk-sensitive assets like the Kiwi are taking a breather on Monday amid news that negotiations for a peace deal in Iran are still in progress. A Reuters report affirms that Iran and the US have received a framework for a plan to end hostilities immediately, which might lead to the reopening of the Strait of Hormuz. Investors have reacted by cutting back long US Dollar positions.
Technical Analysis: Initial signs of recovery
NZD/USD near-term bias remains negative, but recent price action suggests that bears might be running out of steam. The pair is trading in what looks like an ending wedge, after having depreciated more than 6% since late January.
Beyond that, the 4-hour Relative Strength Index (RSI) shows a bullish divergence, as it crawls to the key 50 area. The Moving Average Convergence Divergence (MACD) line is attempting to cross above the Signal line, with the histogram popping up above the zero line.
Bulls, however, would need to break the trendline resistance, now at 0.5740, and Friday's high at 0.5753, and preferably also the April 1 high, near 0.5780, to confirm a corrective reaction. To the downside, supports are at the mentioned session low, near 0.5680, and the wedge's bottom, around 0.5660.
(The technical analysis of this story was written with the help of an AI tool.)
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.33% | -0.40% | -0.16% | -0.18% | -0.53% | -0.54% | -0.31% | |
| EUR | 0.33% | -0.06% | 0.15% | 0.16% | -0.22% | -0.23% | -0.00% | |
| GBP | 0.40% | 0.06% | 0.21% | 0.18% | -0.16% | -0.18% | 0.07% | |
| JPY | 0.16% | -0.15% | -0.21% | -0.02% | -0.39% | -0.41% | -0.17% | |
| CAD | 0.18% | -0.16% | -0.18% | 0.02% | -0.34% | -0.36% | -0.13% | |
| AUD | 0.53% | 0.22% | 0.16% | 0.39% | 0.34% | -0.03% | 0.22% | |
| NZD | 0.54% | 0.23% | 0.18% | 0.41% | 0.36% | 0.03% | 0.26% | |
| CHF | 0.31% | 0.00% | -0.07% | 0.17% | 0.13% | -0.22% | -0.26% |
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).
- The Pound Sterling recovers strongly to near 1.3255 against the US Dollar as the market mood turns favorable for risk-perceived assets.
- Improving market sentiment has diminished the US Dollar’s safe-haven demand.
- Iran acknowledges receiving the US proposal, but seems reluctant to open the Hormuz in exchange for a temporary ceasefire.
The Pound Sterling attracts significant bids against the US Dollar (USD) on Monday, rising 0.45% to near 1.3255 during the European trading session. The major currency pair gains as the risk-on impulse strengthens, following comments from Iran that it is reviewing the United States (US) ceasefire proposal.
The market sentiment turning favorable for riskier assets has diminished the appeal of safe-haven assets. During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, is down 0.35% to near 99.85. The DXY traded marginally higher in the Asian trade.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.33% | -0.39% | -0.16% | -0.18% | -0.54% | -0.55% | -0.32% | |
| EUR | 0.33% | -0.05% | 0.15% | 0.16% | -0.23% | -0.25% | -0.01% | |
| GBP | 0.39% | 0.05% | 0.19% | 0.18% | -0.17% | -0.21% | 0.05% | |
| JPY | 0.16% | -0.15% | -0.19% | -0.00% | -0.39% | -0.41% | -0.17% | |
| CAD | 0.18% | -0.16% | -0.18% | 0.00% | -0.36% | -0.39% | -0.15% | |
| AUD | 0.54% | 0.23% | 0.17% | 0.39% | 0.36% | -0.03% | 0.22% | |
| NZD | 0.55% | 0.25% | 0.21% | 0.41% | 0.39% | 0.03% | 0.26% | |
| CHF | 0.32% | 0.01% | -0.05% | 0.17% | 0.15% | -0.22% | -0.26% |
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).
In the European session, Iran said that it has received the ceasefire proposal through Pakistan, but clarifies that Tehran won’t accept anything under deadlines or pressure, and dismissed the reopening of the Strait of Hormuz in return for a “temporary ceasefire”.
Earlier, a Reuters report claimed that both nations are discussing a two-tier deal that involves plans to end hostilities by Monday.
On the domestic front, investors seek fresh cues about whether the Bank of England (BoE) will raise interest rates in upcoming policy meetings amid the ongoing war in the Middle East.
Last week, BoE Governor Andrew Bailey said, while speaking with Reuters, that monetary policy actions from the United Kingdom (UK) central bank would be desirable if an oil price shock turns out to be a pivotal element. "We will have to act if appropriate but tackling source of energy price shock is most important," Bailey said. He warned that prolonged energy shocks could act as a major drag on economic growth.
In the US, investors await the ISM Services PMI data for March, which will be published at 14:00 GMT. Economists expect the Services PMI to arrive lower at 55.0 from 56.1 in February.
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling 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, its currency will benefit 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.
- USD/CAD declines as the US Dollar softens on improved market sentiment.
- US and Iran received a two-step ceasefire plan, but Tehran refuses to reopen the Strait of Hormuz temporarily.
- Iran plans tanker tolls in the Persian Gulf, easing BoC hawkish sentiment tied to energy shock concerns.
USD/CAD depreciates as the US Dollar (USD) eases amid improved market sentiment following the reports, suggesting prospects for a ceasefire in the Middle East. The pair trades around 1.3920 during the European hours on Monday.
Reuters cited a source, suggesting that the United States (US) and Iran have received a proposed framework to end hostilities, outlining a two-step plan with an immediate ceasefire followed by a broader agreement. Pakistan's army chief, Field Marshal Asim Munir has reportedly been in continuous contact with US Vice President JD Vance, special envoy Steve Witkoff, and Iranian Foreign Minister Abbas Araghchi. However, Tehran stated it would not reopen the Strait of Hormuz under a temporary ceasefire arrangement.
The downside of the USD/CAD pair could be restrained as the commodity-linked Canadian Dollar (CAD) may struggle amid easing oil prices. Crude oil prices eased after the Bloomberg cited an Axios report, suggesting that the US, Iran, and regional mediators are discussing terms for a potential 45-day ceasefire after a day US President Donald Trump threatened to rain "hell" on Tehran if it did not make a deal.
Iranian media reported that officials are working on plans to impose a toll on tankers exiting the Persian Gulf. This eased fears that an energy shock would intensify inflation and compel the Bank of Canada (BoC) to keep rates restrictive for longer.
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.
MUFG’s Lloyd Chan notes that persistent geopolitical tensions around Iran are reinforcing USD strength. Elevated US yields, resilient labour data and fading expectations for Fed rate cuts underpin Dollar carry appeal. Prolonged disruptions to energy flows via the Strait of Hormuz are seen as particularly damaging for Asia, skewing risks toward a stronger USD in a risk-off environment.
Geopolitics and yields back stronger Dollar
"Geopolitical risks remain the dominant driver of market sentiment."
"US 2-year yields remain elevated above 3.8%, above the effective fed funds rate, with markets no longer pricing rate cuts this year."
"Together, these dynamics support USD carry appeal and keep the dollar bid in a risk off environment."
"As a result, oil prices are likely to remain elevated, with risks skewed toward further upside."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- USD/JPY retreats below 159.40 amid a broad-based weakness of the US Dollar.
- Hopes of a ceasefire in Iran are undermining the safe-haven USD.
- Fears of a Yen intervention at 160.00 are also keeping Yen sellers in check.
The US Dollar (USD) nudges lower against the Japanese Yen (JPY) on Monday, with trading volumes at low levels as most markets remain closed on Easter Monday. The pair hit session lows at 159.35 on the early European session, as hopes of a peace deal in Iran are putting the US Dollar under pressure.
News reporting that the US and Iran have received the framework of a plan to end hostilities by a group of mediators provided a glimpse of hope on Monday. Concerns about US President Donald Trump's threat to destroy civil infrastructure and energy sites if the Strait of Hormuz is not reopened before Tuesday at 8 PM Eastern Time, have eased somewhat, prompting investors to scale down US Dollar long positions.
The US Dollar’s downside attempts, however, remain limited with markets still on edge. The war in Iran and the sharp appreciation of Oil prices have kept the Japanese Yen on the back foot. Japan is a major Crude importer, and the current prices pose a significant challenge to the economic outlook, adding strain to the already troubled fiscal stability.
Against this backdrop, the Yen has depreciated bearly 5% since late February, reaching the key 160.00 level last week, which is considered a line in the sand for the Japanese authorities. Japan’s Finance Minister, Satsuki Katayama, supported those views on Friday, observing “very speculative” moves in currency markets and reiterating that Tokyo is ready to take all possible steps to stem Yen weakness.
Furthermore, data from the US released on Friday showed a 178K increase in Nonfarm Payrolls in March, nearly three times the 60K gain expected. Investors, however, took the figures with caution. Accumulative data showed that net employment remains little changed from March 2025, while there are concerns that a protracted war in Iran poses a significant downside risk to employment.
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.
- The Indian Rupee weakens against the US Dollar as oil prices rally due to fears of Middle East war escalation.
- US President Trump threatens to bomb Iranian power plants and bridges.
- The RBI is expected to leave interest rates unchanged on Wednesday.
The Indian Rupee (INR) falls after a flat opening against the US Dollar (USD) at the start of the Reserve Bank of India’s (RBI) monetary policy week. The USD/INR pair rises to near 92.85 as firm oil prices due to fresh threats of assault on Iranian infrastructure by United States (US) President Donald Trump are acting as a key drag on the Indian Rupee.
Oil prices post fresh four-week high
WTI Oil price trades around $102 during afternoon trading hours in India. Oil prices strengthen as US President Trump has threatened to obliterate Iranian power plants and bridges, through a post on Truth.Social, if the nation fails to reach a deal before the deadline.
“Tuesday will be Power Plant Day and Bridge Day, all wrapped up in one, in Iran. There will be nothing like it!!! Open the Fuckin’ Strait, you crazy bastards, or you’ll be living in Hell - JUST WATCH! Praise be to Allah. President DONALD J. TRUMP", Trump wrote over the weekend.
Currencies from economies, such as India, that rely heavily on oil imports to meet their energy needs are significantly impacted due to higher oil prices.
Foreign Outflows continue to keep INR under pressure
Consistent outflow of foreign funds from the Indian stock market continues to batter the Indian Rupee. In the two trading days of April gone by, Foreign Institutional Investors (FIIs) have offloaded their stake worth Rs. 18,262.28 crore. In March, FIIs remained net sellers in all trading days. Overseas investors have been dumping their stake due to the ongoing war in the Middle East, which has improved the appeal of safe-haven assets, such as the US Dollar.
Investors await RBI’s monetary policy
This week, the major highlight will be the RBI's monetary policy announcement on Wednesday. The Indian central bank will likely leave interest rates unchanged as higher oil prices have prompted consumer inflation expectations globally. Market participants will pay close attention to the RBI’s commentary on the monetary policy outlook to get cues about whether the central bank is considering an interest rate hike option in the future in an attempt to mitigate high price pressures.
In Monday’s session, investors will focus on the US ISM Services Purchasing Managers’ Index (PMI) data for March, which will be published at 14:00 GMT. Economists expect the Services PMI to arrive lower at 55.0 from 56.1 in February.
Technical Analysis: USD/INR sees major support near 92.35
USD/INR rises to near 92.85 in the opening trade on Monday. The near-term bias is bearish as the 20-day Exponential Moving Average (EMA) restricts the spot's recovery move. However, the broader structure remains bullish as the higher highs and higher lows formation remains intact.
The 14-day Relative Strength Index (RSI) shifts into the 40.00-60.00 zone from the bullish territory above 60.00, signifying that momentum has cooled down, but the bullish bias remains intact.
Initial support emerges at the March 9 high of 92.35, with a daily close below this level opening the room toward the March 5 low of 91.35. On the topside, immediate resistance stands at the 20-day EMA around 93.00, followed by the April 2 high of 93.66; a break above this area would reassert the bullish trend, which will improve the odds of the price reclaiming the all-time high of 95.22.
(The technical analysis of this story was written with the help of an AI tool.)
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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.
