Forex News
US President Donald Trump said that Iran will be bombed “at a much higher level” if it doesn’t agree to a peace deal, CNBC reported on Wednesday.
Trump in a Truth Social post said the US military offensive known as Operation Epic Fury “will be at an end” if Iran “agrees to give what has been agreed to, which is, perhaps, a big assumption.”
US President further stated that if a peace deal happened, the US naval blockade of Iranian ports in the Gulf of Oman would “allow the Hormuz Strait to be OPEN TO ALL, including Iran. But “if they don’t agree, the bombing starts, and it will be, sadly, at a much higher level and intensity than it was before.”
Market reaction
At the time of writing, the West Texas Intermediate (WTI) is down 6.98% on the day at $92.95.
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.
Iran said a US proposal to end the war is "still being considered" after reports the two countries could be close to an agreement, the BBC reported on Wednesday.
The US has presented a one-page memorandum of understanding to Iran that would gradually reopen the Strait of Hormuz and lift the American blockade on Iranian ports. Detailed talks over Iran’s nuclear program would come later in the process, the person said, adding that nothing has yet been agreed upon.
US President Donald Trump stated that the US has had “very good talks” with Iran over the past 24 hours, but there’s no deadline for when he expects to hear back from Tehran.
Market reaction
At the time of writing, the West Texas Intermediate (WTI) is down 7.05% on the day at $92.85.
Brent Crude Oil FAQs
Brent Crude Oil is a type of Crude Oil found in the North Sea that is used as a benchmark for international Oil prices. It is considered ‘light’ and ‘sweet’ because of its high gravity and low sulfur content, making it easier to refine into gasoline and other high-value products. Brent Crude Oil serves as a reference price for approximately two-thirds of the world's internationally traded Oil supplies. Its popularity rests on its availability and stability: the North Sea region has well-established infrastructure for Oil production and transportation, ensuring a reliable and consistent supply.
Like all assets supply and demand are the key drivers of Brent Crude 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 Brent 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 Brent Crude 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 Brent Crude 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.
The Australian Trade Data Overview
The Australian Bureau of Statistics will publish its data for March on Thursday at 00.30 GMT. Australia’s Trade Surplus is expected to narrow to 4,250 MoM in March, compared to 5,686 in February.
Trade Balance gives an early indication of the net export performance. If a steady demand in exchange for Australian exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the AUD.
How could the Australian Trade Data affect AUD/USD?
AUD/USD trades on a positive note on the day in the lead up to the Australian Trade Data. The pair gathers strength amid optimism over a US-Iran peace deal after reports that the United States (US) and Iran were circling around a fresh proposal to end the war on Wednesday.
If data comes in better than expected, it could lift the Australian Dollar (AUD), with the first upside barrier seen at the May 6 high of 0.7277. The next resistance level emerges at the 0.7300 psychological level, en route to the March 4, 2022, high of 0.7380.
To the downside, the May 4 low of 0.7153 will offer some comfort to buyers. Extended losses could see a drop to the April 30 low of 0.7110. The next contention level is located at 0.7000, a round figure.
Economic Indicator
Trade Balance (MoM)
The trade balance released by the Australian Bureau of Statistics is the difference in the value of its imports and exports of Australian goods. Export data can give an important reflection of Australian growth, while imports provide an indication of domestic demand. Trade Balance gives an early indication of the net export performance. If a steady demand in exchange for Australian exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the AUD.
Read more.Next release: Thu May 07, 2026 01:30
Frequency: Monthly
Consensus: 4,250M
Previous: 5,686M
Source: Australian Bureau of Statistics
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
Reserve Bank of New Zealand (RBNZ) Governor Anna Breman said on Thursday that she anticipates slightly elevated near-term inflation, adding that growth to be slightly slower but still expected this year.
Key quotes
New Zealand house prices expected to stay flat, rise slightly over time.
Anticipate slightly elevated near-term inflation.
Growth to be slightly slower but still expected this year.
Banking system shows minimal stress despite global uncertainties.
Market reaction
At the press time, the NZD/USD pair is up 1.22% on the day to trade at 0.5955.
RBNZ FAQs
The Reserve Bank of New Zealand (RBNZ) is the country’s central bank. Its economic objectives are achieving and maintaining price stability – achieved when inflation, measured by the Consumer Price Index (CPI), falls within the band of between 1% and 3% – and supporting maximum sustainable employment.
The Reserve Bank of New Zealand’s (RBNZ) Monetary Policy Committee (MPC) decides the appropriate level of the Official Cash Rate (OCR) according to its objectives. When inflation is above target, the bank will attempt to tame it by raising its key OCR, making it more expensive for households and businesses to borrow money and thus cooling the economy. Higher interest rates are generally positive for the New Zealand Dollar (NZD) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken NZD.
Employment is important for the Reserve Bank of New Zealand (RBNZ) because a tight labor market can fuel inflation. The RBNZ’s goal of “maximum sustainable employment” is defined as the highest use of labor resources that can be sustained over time without creating an acceleration in inflation. “When employment is at its maximum sustainable level, there will be low and stable inflation. However, if employment is above the maximum sustainable level for too long, it will eventually cause prices to rise more and more quickly, requiring the MPC to raise interest rates to keep inflation under control,” the bank says.
In extreme situations, the Reserve Bank of New Zealand (RBNZ) can enact a monetary policy tool called Quantitative Easing. QE is the process by which the RBNZ prints local currency and uses it to buy assets – usually government or corporate bonds – from banks and other financial institutions with the aim to increase the domestic money supply and spur economic activity. QE usually results in a weaker New Zealand Dollar (NZD). QE is a last resort when simply lowering interest rates is unlikely to achieve the objectives of the central bank. The RBNZ used it during the Covid-19 pandemic.
- Gold price edges higher to around $4,700 in Thursday’s early Asian session.
- Hopes for a final deal between the US and Iran underpin the Gold price.
- The US employment report data for April will be in the spotlight later on Friday.
Gold price (XAU/USD) gains momentum to a one-week high near $4,700 during the early Asian session on Thursday. The precious metal extends the rally as optimism over a US-Iran peace deal eased concerns over inflation.
Bloomberg reported on Wednesday that the US and Iran were circling a fresh proposal to end the war, as US President Donald Trump searches for an exit from a conflict that has spiked energy prices and damaged his political standing. Trump added that the war has “a very good chance of ending” and there’s a possibility that it will happen before his trip to Beijing next week.
Easing concerns over price pressures could convince the US Federal Reserve (Fed) to cut the interest rate rather than keep policy restrictive for longer. This, in turn, could provide some support to yellow metals as they signal a decrease in the opportunity cost of holding the metal.
“The optimism about a final deal between the US and Iran has caused at least some short-term relief in gold,” said Peter Grant, vice president and senior metals strategist at Zaner Metals. However, he also cautioned that the market can still “pivot on Middle East headlines.”
Traders brace for the US employment report data for April later on Friday, as it might dictate the Fed's next move regarding interest rates. Any signs of improvement in the US labor market could lift the US Dollar (USD) and weigh on the USD-denominated commodity price in the near term.
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.
- UK April Services PMI beat expectations at 52.7, but GBP/USD failed to hold above the 1.3600 handle on Wednesday.
- Friday's US NFP report could see hiring slow to 60K from 178K previously, marking a key catalyst for the US Dollar.
- Optimism over a US-Iran peace deal weighed on the US Dollar, despite few concrete signs of progress from either side.
GBP/USD gained around 0.4% on Wednesday, settling close to 1.3595 after testing 1.3645 and failing to clear the 1.3600 handle on the close. The pair has hesitated at the upper end of recent congestion, with a cluster of upper wicks and small-bodied candles near the session high pointing to fading conviction as bulls struggle to build momentum at this resistance zone.
On the UK side, the April S&P Global Composite and Services Purchasing Managers' Index (PMI) prints both beat consensus on Wednesday at 52.6 and 52.7 respectively, suggesting private sector activity is holding up better than expected despite a generally softer macro backdrop. The next domestic test arrives Thursday with April Construction PMI, which printed deep in contraction at 45.6 last month and remains the soft underbelly of the UK growth picture, followed by Friday's Halifax House Prices data.
On the US Dollar side, Wednesday's April ADP private payrolls report beat consensus at 109K versus 99K expected and Federal Reserve official Alberto Musalem delivered notably hawkish remarks, yet the Dollar struggled to draw any meaningful support, with risk-on flows driven by hopes of a US-Iran peace deal dominating positioning. President Trump paused "Project Freedom" operations in the Strait of Hormuz on Tuesday, citing progress in Pakistan-mediated talks, though the substance behind the optimism remains thin. Iranian officials have reportedly dismissed the latest US proposal as a list of "American wishes." Both sides continue to exchange fire despite the nominal ceasefire that has held since 8 April, and the strait remains effectively closed to most commercial traffic. Friday's US Non-Farm Payrolls (NFP) print becomes the dominant near-term catalyst, with consensus calling for a sharp slowdown to 60K from 178K previously, alongside University of Michigan (UoM) consumer sentiment and inflation expectations data.
GBP/USD 15-minute chart
Technical Analysis
In the fifteen-minute chart, GBP/USD trades at 1.3594, holding a modest bullish intraday bias as it remains above the daily open at 1.3567. The move away from the opening level suggests dip-buying interest on minor pullbacks, while the Stochastic RSI around 73 hints that upside momentum is positive but edging toward short-term overbought conditions, which could slow the pace of further gains.
On the downside, initial support is located at the day’s open near 1.3567, where buyers would be expected to re-emerge on a shallow correction to preserve the constructive tone. As long as the pair defends this floor on closing basis, intraday risks are likely to stay skewed to the upside, even if stretched momentum readings trigger brief consolidations or minor reversals.
In the daily chart, GBP/USD trades at 1.3594. The pair holds a constructive near-term bias as price extends above the 50-day Exponential Moving Average (EMA) at 1.3465, indicating that the broader pullback has given way to renewed demand on dips. However, the Stochastic RSI has eased back toward mid-range around 48, hinting that upside momentum is moderating after the recent advance, which could encourage consolidation rather than an immediate directional push.
On the downside, initial support is aligned with the 50-day EMA at 1.3465, where a break would undermine the current bullish structure and open the way for a deeper correction. While no specific resistance levels are defined by the available indicators, the absence of nearby moving-average caps implies that sellers are likely to emerge at prior swing highs and psychologically important figures above the market, leaving the pair biased to probe higher while it holds over the 1.3465 support zone.
(The technical analysis of this story was written with the help of an AI tool.)
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.
- AUD/USD climbed roughly 0.8% on Wednesday but stalled close to 0.7250 as bullish momentum faded near four-year highs.
- Risk appetite firmed as Trump paused operations in the Strait of Hormuz and signalled progress on a US-Iran peace deal.
- Thursday's Australian Trade Balance and Friday's US NFP report present the next key catalysts for the pair.
AUD/USD gained roughly 0.8% on Wednesday, settling close to 0.7240 after testing 0.7280 intraday and failing to hold above the 0.7250 handle. The pair is trading at four-year highs, but a cluster of upper wicks and small-bodied candles at the day's peak point to fading bullish momentum as price tests this multi-year zone.
The US Dollar weakened broadly on Wednesday after President Trump paused "Project Freedom" operations in the Strait of Hormuz, citing progress in Pakistan-mediated talks with Iran. Iranian Foreign Ministry spokesperson Esmail Baghaei confirmed Tehran was reviewing the latest US proposal but had yet to deliver a formal response, with some Iranian officials reportedly dismissing the one-page memo as a list of "American wishes" rather than a serious offer. Both sides have continued to exchange fire despite the nominal ceasefire holding since 8 April, and the strait remains effectively closed to most commercial traffic, leaving the substance behind the latest round of diplomatic optimism thin.
April ADP private payrolls beat consensus at 109K versus 99K expected, but the US Dollar drew little support; hawkish remarks from Federal Reserve official Alberto Musalem were unable to offset the broad risk-on tone. Thursday's Australian Trade Balance (March) is the next pair-specific test, before Friday's US Non-Farm Payrolls (NFP) report becomes the dominant catalyst, with consensus calling for a sharp slowdown to 60K from 178K previously.
AUD/USD 15-minute chart
Technical Analysis
In the fifteen-minute chart, AUD/USD trades at 0.7239. The pair holds above the day’s open at 0.7205, keeping a mild intraday bullish bias in place as buyers defend the recent recovery from lower levels. The Stochastic RSI at around 60 leans positively but is not overbought, suggesting upside pressure persists without yet signaling exhaustion.
On the downside, initial support is located at the day’s open near 0.7205, where a break would weaken the constructive tone and expose deeper retracement toward prior intraday lows. With no major moving averages or structural resistance levels provided overhead, short-term price action is likely to be driven by momentum swings, with a sustained Stochastic RSI push toward overbought territory needed to signal a more extended advance.
In the daily chart, AUD/USD trades at 0.7239. The pair holds well above both the 50-day Exponential Moving Average (EMA) at 0.7072 and the 200-day EMA at 0.6826, keeping the near-term bias constructive as the medium-term trend remains pointed higher. The short-term pullback in the Stochastic RSI toward the mid-range around 53 suggests momentum has cooled from overbought territory but still hints at ongoing upside pressure while price action stays supported by these underlying averages.
On the downside, initial support is seen at the 50-day EMA near 0.7072, where a dip could attract buyers on first test, ahead of the more distant 200-day EMA at 0.6826, which underpins the broader bullish structure. With no nearby technical resistance levels highlighted by the current dataset, further gains would likely depend on how spot behaves on approaches to recent swing highs, while a daily close below the 50-day EMA would be needed to weaken the current bullish outlook.
(The technical analysis of this story was written with the help of an AI tool.)
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
Chicago Fed President Austan Goolsbee said that the US-Iran conflict is looking more like an inflationary shock. He added that “It has not yet been a stagflationary-direction shock," with a blow to both the job market and inflation that would force the US central bank to decide which of its goals is more at risk, Goolsbee said on a video call with journalists after participating in a Milken Institute conference in Los Angeles.
Key highlights:
OVERHAULING THE CENTRAL BANK'S INFLATION FRAMEWORK IS 'NOT AN EASY SPACE'
KEVIN WARSH HAS SOME FRESH IDEAS WORTH THINKING ABOUT
US CENTRAL BANK SHOULD INCORPORATE ALL THE DATA IT CAN, BUT SAYS HE DOESN'T THINK THERE IS A SILVER BULLET FOR INFLATION PROBLEM
HE IS OPEN TO NEW WAYS OF THINKING ABOUT INFLATION
HE WOULD BE ON THE LOOKOUT FOR 'UNDERHEATING' DEMAND IF LOW CONSUMER CONFIDENCE TRANSLATES INTO FALLING CONSUMER SPENDING
US MIGHT BE APPROACHING AN ERA OF LABOR SCARCITY DUE TO COMBINATION OF POPULATION AGING AND LIMITED IMMIGRATION
THE LONGER OIL PRICES REMAIN HIGH, THE GREATER THE CHANCE PEOPLE START FACTORING HIGHER INFLATION INTO EXPECTATIONS, WHICH WOULD BE 'EXTREMELY PROBLEMATIC' FOR THE CENTRAL BANK
LABOR MARKET IS STABLE BUT NOT GREAT; GAINS IN PAYROLLS ARE NOT GOOD MEASURE OF SLACK AT THIS POINT
IT IS CLEAR FROM PUBLIC STATEMENTS THAT THERE ARE DIFFERENT WORLD VIEWS AT THE US CENTRAL BANK ABOUT PATH OF INFLATION, NATURE OF JOB MARKET
EVIDENCE OF MORE PERSISTENT INFLATION MIGHT COME FROM SUSTAINED PRICE INCREASES IN CORE SERVICES, WEALTH-DRIVEN SPENDING AMONG MORE AFFLUENT HOUSEHOLDS, AND WAGE HIKES IN OCCUPATIONS TIED TO ARTIFICIAL INTELLIGENCE INVESTMENT
NOT SURPRISED TO SEE EVIDENCE OF SUPPLY CHAIN PROBLEMS DEVELOPING GIVEN LENGTH OF US-IRAN CONFLICT
EVERY POLICY OPTION IS ALWAYS ON THE TABLE, AND THE WORLD SHOULD KNOW THAT
ANYTHING THAT INDICATED THE US IS GOING THE WRONG WAY ON INFLATION ON A PERSISTENT BASIS WOULD REQUIRE A RETHINK ABOUT THE RIGHT MONETARY POLICY PATH
US PRODUCTIVITY GAINS HAVE PROVED SOMEWHAT DURABLE, BUT IMPLICATION FOR INTEREST RATES IS MORE SUBTLE
LABOR MARKET SEEMS PRETTY STABLE WHILE INFLATION HAS BEEN OVER CENTRAL BANK'S TARGET FOR FIVE YEARS AND PROGRESS ON THAT FRONT HAS STOPPED
US CENTRAL BANK NEEDS TO WATCH FOR BEHAVIORS TODAY THAT SEEM PREMISED ON A 'BOUNTY' TO COME, SUCH AS SPENDING OUT OF WEALTH EFFECTS OR OVERHEATING LOCAL MARKETS BASED ON DATA-CENTER INVESTMENT
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.
- GBP/JPY retreats after failing near 214.00 amid stronger Japanese Yen.
- RSI points lower, signaling growing downside momentum in near term.
- Break below 212.04 exposes 210.46 and 209.63 support levels.
GBP/JPY retreats over 0.55% on Wednesday as the Japanese Yen strengthened in the aftermath of last week’s intervention in the FX markets by Japanese authorities. At the time of writing, the cross-pair trades at 212.60 after reaching a daily peak of 214.23.
GBP/JPY Price Forecast: Technical Outlook
The GBP/JPY is poised to consolidate after clearing key support levels like the 50-day Simple Moving Average (SMA) at 211.99, followed by the 50-day SMA at 212.85.
Momentum favours further upside, as depicted in the daily chart, but the Relative Strength Index (RSI) hints that further downside is seen.
If GBP/JPY drops below the 100-day SMA of 212.04, the cross would resume its downtrend sharply, with the next support seen at 210.46, the April 30 swing low. A breach of the latter will expose the March 31 swing low of 209.63, followed by the March 5 low of 209.18.
Conversely, the first resistance for GBP/JPY is the 50-day SMA at 212.91. A decisive break will expose the 213.00 figure, followed by the 214.00, with buyers eyeing the 20-day SMA at 214.63.
GBP/JPY Price Chart – Daily
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.46% | -0.40% | -1.00% | 0.08% | -0.75% | -1.24% | -0.51% | |
| EUR | 0.46% | 0.05% | -0.51% | 0.55% | -0.29% | -0.88% | -0.07% | |
| GBP | 0.40% | -0.05% | -0.59% | 0.50% | -0.35% | -0.92% | -0.09% | |
| JPY | 1.00% | 0.51% | 0.59% | 1.06% | 0.20% | -0.18% | 0.41% | |
| CAD | -0.08% | -0.55% | -0.50% | -1.06% | -0.85% | -1.26% | -0.57% | |
| AUD | 0.75% | 0.29% | 0.35% | -0.20% | 0.85% | -0.56% | 0.26% | |
| NZD | 1.24% | 0.88% | 0.92% | 0.18% | 1.26% | 0.56% | 0.78% | |
| CHF | 0.51% | 0.07% | 0.09% | -0.41% | 0.57% | -0.26% | -0.78% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
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