Forex News
The Federal Reserve (Fed) released the latest Beige Book on Wednesday, which the Federal Open Market Committee (FOMC) uses in discussions about setting monetary policy. The Beige Book gathers information from the Fed's 12 districts and provides an overall picture of the US economy.
The report states that economic activity increased at a “slight to moderate pace for ten of the twelve districts," with one reporting a slight decline and another one, no change.
Regarding inflation, prices increased at a moderate-to-strong pace overall, with most districts reporting higher inflation than in the previous book. Meanwhile, employment shows little or no change across eleven of the twelve districts, with the outlier experiencing modest growth.
Meanwhile, businesses' outlook for the following six months was reported to show little change.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.31% | 0.39% | 0.06% | 0.43% | 0.69% | 1.10% | 0.68% | |
| EUR | -0.31% | 0.07% | -0.26% | 0.15% | 0.41% | 0.78% | 0.38% | |
| GBP | -0.39% | -0.07% | -0.32% | 0.04% | 0.30% | 0.68% | 0.30% | |
| JPY | -0.06% | 0.26% | 0.32% | 0.34% | 0.61% | 0.97% | 0.60% | |
| CAD | -0.43% | -0.15% | -0.04% | -0.34% | 0.27% | 0.66% | 0.26% | |
| AUD | -0.69% | -0.41% | -0.30% | -0.61% | -0.27% | 0.39% | -0.02% | |
| NZD | -1.10% | -0.78% | -0.68% | -0.97% | -0.66% | -0.39% | -0.38% | |
| CHF | -0.68% | -0.38% | -0.30% | -0.60% | -0.26% | 0.02% | 0.38% |
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).
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.
DBS Group Research economist Radhika Rao notes that Indonesia’s May inflation accelerated on higher food and energy costs but remains within Bank Indonesia’s target band. She highlights weather risks, Rupiah weakness and a shrinking trade surplus as key concerns. The report stresses that absent fuel price adjustments, higher global prices could pressure the trade and current accounts, and expects further domestic rate tightening by BI this year.
Inflation quickens as trade surplus shrinks
"Indonesia’s May inflation quickened to 3.1% yoy from 2.4% on higher food and energy pressures in the month, despite steady pump prices."
"Put differently, price adjustments in market-driven i.e., volatile segment (cooking oil, chillies, etc.) rose sharply to 6.2% yoy vs 3.4% the month before, besides an uptick in administered and energy sub-indices."
"Headline inflation is still within the BI’s target of 1.5-3.5%, although nearing the upper end, with a breach likely if the West Asia conflict prolongs."
"Out concurrently, April trade surplus shrank to $89mn vs $3.3bn in Mar, the smallest in nearly six years, following a surge in crude oil (up 67.5%) and refined fuel (88%) imports."
"Without fuel price adjustments to temper demand, higher global prices and a weak rupiah are likely to weigh on the trade balance and, consequently, the current account math."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- WTI extends gains as doubts grow over a near-term US-Iran agreement.
- Tehran presents a four-stage deal proposal to the US, according to Fars News Agency.
- US crude inventories post the biggest draw since February.
West Texas Intermediate (WTI) crude Oil climbs to its highest level in nearly two weeks on Wednesday as renewed hostilities in the Middle East dent hopes of a near-term US-Iran deal that could reopen the Strait of Hormuz. At the time of writing, WTI trades around $94 per barrel, extending gains for a third consecutive day.
Iran launched missile and drone attacks on Kuwait and Bahrain, while the United States responded with “self-defense” strikes on Iran’s Qeshm Island.
Iran’s Fars News Agency, citing a member of Tehran’s negotiating team, reported that talks with Washington are still ongoing and no final decision has been made yet. The report also said Tehran has outlined a four-stage proposal for a deal with the United States.
The Strait of Hormuz remains a key sticking point in the negotiations. Tehran considers control of the waterway a matter of national sovereignty, which handles around 20% of global Oil trade, keeping geopolitical risk embedded in crude prices.
The Financial Times reported on Tuesday that the UAE is planning to build its first multi-fuel pipeline, allowing gasoline, diesel and jet fuel to be transported from Abu Dhabi to Fujairah without passing through the Hormuz.
On the data front, the US Energy Information Administration (EIA) reported that US crude Oil inventories fell by 7.97 million barrels last week, compared with expectations for a 4 million-barrel draw. It marked the largest weekly decline in crude stocks since February.
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.
Sky News Arabia, citing a Lebanese source, commented on the lack of progress in the current round of negotiations between the two sides in Washington.
Under current circumstances, a joint declaration of intent will be skipped. Still, if the ideas and proposals put forward reach a possible conclusion, a joint statement will be issued regarding the fourth round of talks.
The Lebanese delegation insisted on starting with a ceasefire ahead of beginning discussions. Worth noting that there’s no date set for new talks regarding the security track at the Pentagon.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.29% | 0.36% | 0.05% | 0.41% | 0.67% | 1.08% | 0.66% | |
| EUR | -0.29% | 0.06% | -0.22% | 0.12% | 0.38% | 0.77% | 0.38% | |
| GBP | -0.36% | -0.06% | -0.28% | 0.05% | 0.31% | 0.69% | 0.30% | |
| JPY | -0.05% | 0.22% | 0.28% | 0.33% | 0.59% | 0.95% | 0.58% | |
| CAD | -0.41% | -0.12% | -0.05% | -0.33% | 0.27% | 0.65% | 0.24% | |
| AUD | -0.67% | -0.38% | -0.31% | -0.59% | -0.27% | 0.38% | -0.05% | |
| NZD | -1.08% | -0.77% | -0.69% | -0.95% | -0.65% | -0.38% | -0.39% | |
| CHF | -0.66% | -0.38% | -0.30% | -0.58% | -0.24% | 0.05% | 0.39% |
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).
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
OCBC’s FX Strategists Sim Moh Siong and Christopher Wong note that the CNY has gained 3.3% against the Dollar this year, outperforming Asian peers and strengthening on the CFETS basket. They attribute this to solid external demand and corporate FX conversion, with authorities tolerating further appreciation, though gains are expected to be measured and may slow near term during the dividend payment season.
Yuan strength seen as measured
"The CNY is up 3.3% year to date against the USD, outperforming Asian peers and shrugging off negative terms of trade from high oil prices."
"Strength is also evident in the CFETS basket, now nearing early-2025 highs."
"Key drivers remain solid external demand and increased corporate FX conversion."
"Authorities appear comfortable with further appreciation to support RMB internationalisation and ease undervaluation concerns."
"Currency gains should continue but remain measured given soft domestic demand and export dependence."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Silver trades sideways within a $73.00-$78.50 consolidation range.
- RSI points lower, confirming sellers remain firmly in control.
- Break below $73.00 exposes $71.79 and 200-day SMA.
Silver (XAG/USD) halts its advance and plunges over 2% on Wednesday amid growing speculation that a resumption of hostilities between the US and Iran, after the two exchanged fire overnight, increases the chances that major central banks will hike rates, a headwind for the non-yielding metal. The XAG/USD pair trades at $73.46 after peaking at nearly $75.30.
XAG/USD Price Forecast: Technical outlook
Silver continues to trade sideways within the $73.00-$78.50 range, except for reaching a four-week low of $71.79 on May 28. Price action shows bearish momentum, even though XAG/USD has been trading at the top/bottom of the 50-day Simple Moving Average (SMA) at $76.14, which is the first line of resistance for sellers if buyers intend to push prices higher.
The Relative Strength Index (RSI) shows that sellers are in charge, with the index pointing lower toward oversold territory.
On the downside, the first support is the $73.00, followed by the May 28 low at $71.79. Below this area sits the 200-day SMA at $67.47.
For a bullish reversal, Silver must clear the 50-day SMA and the May 26 daily high of $78.52 before challenging the 100-day SMA at $81.03.
XAG/USD Price Chart – Daily
(This story was corrected on June 3 at 18:11 GMT to say that XAG/USD hit a four-week low of $71.79 on May 28, not May 29.)
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.
- US-Iran strikes near Hormuz lift Oil and US Dollar demand.
- ADP, JOLTS and ISM data show resilient US conditions.
- Williams says Fed policy is right ahead of Beige Book release.
Gold (XAU/USD) price slumps over 1% on Wednesday, losing for the second day in the week amid fears that hostilities between the US and Iran may escalate, pushing energy prices higher and the US Dollar as well.
Geopolitics weigh on Gold, as Oil shock revives inflation fears
Tensions in the Middle East are high after Iran and the US exchanged fire near the Strait of Hormuz. The US CENTCOM carried out “defensive strikes” against Iran’s missile launchers and boats poised to lay mines. On the other hand, Tehran attacked US bases in Gulf States like Kuwait, the United Arab Emirates (UAE) and Saudi Arabia.
Oil prices rose as a possible resumption of negotiations seems far after Iran’s Fars news agency reported that talks had stalled, even though US President Donald Trump denied it.
This raised concerns about Oil supply disruptions, which are threatening to trigger a second wave of inflation and force major central banks to raise interest rates.
West Texas Intermediate (WTI), the US crude Oil benchmark, posted gains of more than 2.50%, a tailwind for the Greenback. The US Dollar Index (DXY), which tracks the performance of the buck’s value against six currencies, is up 0.32% at 99.53
US data to prevent the Fed from cutting
US jobs data indicates a strong labor market, with May's ADP National Employment increasing by 122K, surpassing the forecast of 117K. This, along with Tuesday’s JOLTS report showing a rise in job openings, paints a resilient picture of US employment ahead of the release of Nonfarm Payroll figures, which are expected to increase by 85K.
Recently, the ISM Services PMI rose from 53.6 to 54.5 in May as businesses ordered in anticipation of higher prices. The Prices Paid component increased from 70.7 to 71.3, showing the energy shock is spreading to the services sector.
In the meantime, the New York Fed President John Williams said that monetary policy “is exactly in the right place,” adding that he doesn’t “see any need to raise or lower interest rates right now.”
Ahead traders will eye Dallas Fed President Lorie Logan speech, along with the release of the Fed’s Beige Book, ahead of the June 16-17 meeting.
XAU/USD technical outlook: Gold’s downtrend continues below the 20-day SMA
Gold extends its downtrend, reaching four-day lows at $4,426, poised to hit $4,400 sooner than $4,500. Momentum shifted mildly bearish, with price action printing successive series of lower highs and lows, closing near the 200-day Simple Moving Average (SMA) of $4,422, which, once surpassed, would pave the way for further losses.
The Relative Strength Index (RSI) is bearish, pointing downwards, confirming that sellers are stepping in to drive Gold’s prices lower.
If XAU/USD clears the 200-day SMA, look for a test of $4,400. Below this area lies the current yearly low of $4,098, the March 23 daily low.
Upwards, Gold must reclaim $4,500 before testing the 20-day SMA at $4,573. Above this area is the 50-day SMA at $4,626, followed by the 100-day SMA at $4,794.
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.
- Crude Oil Prices near two-week highs amid renewed tensions in the Middle East.
- Recent data show that Canada entered a technical recession after a negative Q1 GDP reading.
- USD/CAD flirts with 1.3900 and trades at its highest in two months.
The Canadian Dollar (CAD) trades with a heavy tone against its American counterpart, as the US Dollar (USD) gathers strength from renewed Middle East concerns. The USD/CAD pair nears 1.3900, its highest in two months.
The USD is back in fashion in a risk-averse environment, triggered by fresh war-related headlines. Concerns returned on news indicating that Iran is dropping attacks on neighboring countries while facing the United States (US) response. United States (US) President Donald Trump tried to pour cold water on the matter, stating that Iran agreed not to have nuclear weapons, but his words fell on stony ground.
The same war is driving Oil prices sharply up, with the barrel of West Texas Intermediate (WTI) changing hands at $94. Given that Canada is the 4th-largest oil producer in the world, higher Oil prices usually strengthen the CAD.
What’s going on?
Canada entered a technical recession after Real Gross Domestic Product (GDP) fell by 0.1% in the first quarter of 2026, following a revised 1% decline in the last quarter of 2025. By definition, a technical recession is defined by two successive quarters of negative economic growth. Three of the last four quarters in Canada have now posted negative real GDP growth.
Does it mean the economy is actually in trouble? The answer is no, not yet. But yeah, the figures are worrisome and require immediate attention. But what kind of “attention” could the matter receive in such an uncertain environment? With the war ongoing and the continuously delayed promise of a peace deal, there’s no foreseeable near-term solution.
USD/CAD Technical Outlook
The near-term picture for USD/CAD is bullish, as the 4-hour chart shows the pair trading above the 20-, 100-, and 200-period Simple Moving Averages (SMAs), with the short-term 20-period SMA at 1.3836 reinforcing nearby trend support. The same chart shows that the Momentum indicator stays well into positive territory, albeit losing upward strength. Finally, the Relative Strength Index (RSI) index hovers in overbought territory near 74, hinting that while the advance is strong, upside risk is increasingly exposed to corrective pullbacks.
As previously noted, initial support is seen at the 20-period SMA around 1.3836, where a shallow dip could find buyers and keep the immediate uptrend intact. A deeper retracement would expose the 100-period SMA near 1.3782 before the broader bullish structure is tested closer to the 200-period SMA at 1.3716. Once above the psychological 1.3900 mark, the pair can extend its advance towards the 1.3950 price zone, while further advances expose 1.3966, the yearly high posted in March.
(The technical analysis of this story was written with the help of an AI tool.)
Scotiabank strategists Shaun Osborne and Eric Theoret note the Japanese Yen (JPY) is marginally stronger, with USD/JPY stabilizing just below the key 160 resistance area. They stress that intervention risk remains elevated as the pair approaches this psychologically important level. Markets are pricing meaningful Bank of Japan (BoJ) tightening by December, while RSI momentum stays bullish and the bank sees limited additional resistance above 160.
Yen steadies but intervention risk elevated
"The yen is up a marginal 0.1% vs. the USD and showing signs of stabilization just above key technical support (USD/JPY resistance at 160)."
"Near-term risk remains centered on official currency management (intervention) as USD/JPY approaches the psychologically important 160 level."
"Comments from BoJ Gov. Ueda have been hawkish, signaling that the policy rate was not in the neutral range."
"Markets are pricing about 22bps of tightening for the meeting, and nearly 50bps by December."
"For USD/JPY, we note the bullish momentum in the RSI and see little in terms of additional near-term resistance above 160."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
MUFG’s Lloyd Chan highlights that Indonesia is undergoing a structural regime shift as the state moves toward direct control of key commodity exports via Danantara Sumberdaya Indonesia. The report stresses high near-term implementation risks for the Rupiah, but notes that over the medium term, effective execution could bolster external stability while poor execution could weigh on the currency.
State control raises Rupiah risk profile
"A structural regime shift is underway. Indonesia is transitioning toward a state-controlled commodity export system under Danantara Sumberdaya Indonesia (DSI), a new subsidiary of the Danantara sovereign wealth fund. Unlike global precedents typically focused on a single commodity resource, Indonesia is attempting to apply this model across multiple key commodities such as coal, palm oil, and ferroalloys, making the scope both unique and execution intensive."
"Implementation risks are high in the near term. Uncertainty during the rollout phase could disrupt trade flows, create pricing ambiguity, and weigh on investor sentiment. Markets appear to be pricing this risk, with the rupiah underperforming regional peers amid a softening macro backdrop - including a sharply narrowing trade surplus ($89mn in April vs. $3.3bn in March), declining FX reserves (down ~USD6.3bn YoY in April), and persistent capital outflows."
"We expect the government to take direct control of several key commodity exports. Market mechanisms are not eliminated, but increasingly mediated by the state. Prices could still reference global benchmarks, even as state influence rises."
"USD/IDR could develop a mild downside bias on an unwinding of crowded long USD/IDR positioning and cheap valuations. US–Iran de-escalation could be a key trigger for reversal."
"Policy outcomes are inherently binary over the medium term. Effective execution would strengthen Indonesia’s external position and underpin rupiah stability, while poor execution or policy overreach risks disrupting trade flows, eroding competitiveness, and driving prolonged currency weakness."
"BI’s policy support will help to partially offset rising country risk premia. The central bank has raised policy rate by 50bps in May and enhanced FX support measures via issuing more high-yielding SRBI, helping to improve the rupiah’s front-end carry appeal."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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.
