Forex News
- AUD/USD softens to around 0.7200 in Friday’s early Asian session.
- Trump will hear military options as part of efforts to pressure Iran into a deal.
- Hotter Australian CPI inflation could lift the Aussie.
The AUD/USD pair drifts lower to near 0.7200 during the early Asian trading hours on Friday. Ongoing tensions in the Middle East continue to boost a safe-haven currency such as the US Dollar (USD) against the Aussie. Traders will keep an eye on the US ISM Manufacturing Purchasing Managers Index (PMI) for April, which is due later on Friday.
CNN reported on Thursday that US President Donald Trump complained about congressional efforts aimed at limiting his war powers, the latest of which the Senate rejected this afternoon. Trump was expected to hear about updated military options for Iran from Pentagon officials on Friday.
Earlier on Thursday, the US President said he was sticking with a naval blockade of Iranian ports amid concerns the vital Strait of Hormuz would not reopen anytime soon.
Australian headline Consumer Price Index (CPI) inflation climbed to 4.6% YoY in March, primarily due to fuel price shocks linked to ongoing Middle East conflicts. While the figure was slightly below the 4.7% forecast, it remains well above the Reserve Bank of Australia’s (RBA) target range, keeping pressure on the central bank to hike rates. A hawkish RBA stance could help limit the Australian Dollar’s (AUD) losses in the near term.
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.
- USD/JPY attracts some buyers during the Asian session amid a combination of supporting factors.
- Softer Tokyo CPI comes amid economic risks due to Middle East tensions and undermines the JPY.
- The Fed’s hawkish tilt and the US-Iran stalemate revive USD demand, further supporting the pair.
The USD/JPY pair is seen building on the previous day's late rebound from the vicinity of mid-155.00s, or over a two-month low, and gaining some positive traction during the Asian session on Friday. The momentum lifts spot prices to the 157.25 region in the last hour and is sponsored by a combination of factors.
Following a brutal reaction to heightened verbal intervention by Japanese authorities, the Japanese Yen (JPY) meets with a fresh supply amid economic concerns stemming from Middle East tensions. Investors remain worried that Japan's economy will come under strain in the near future due to the continued disruption to energy supplies through the Strait of Hormuz. The concerns were further fueled by reports that the US is considering new military strikes on Iran amid stalled peace talks.
Meanwhile, consumer inflation in Tokyo – Japan's capital city – missed forecasts across all measures in April and remained below the Bank of Japan's (BoJ) 2% target for a third straight month. This gives the central bank more reasons to pause despite the June rate hike signals earlier this month, offsetting a jump in Japan's Manufacturing PMI to its highest since January 2022, and does little to impress the JPY bulls. Apart from this, a modest US Dollar (USD) uptick supports the USD/JPY pair.
The US Federal Reserve's (Fed) decision to hold its key policy rate unchanged at 3.50%-3.75% on Wednesday saw the highest number of dissents since 1992, with three policymakers voting against the accommodative tone in the statement. Furthermore, the Advance US GDP report indicated that the largest economy expanded by 2.0% annualized pace during the first quarter of 2026. This was higher than the 0.5% growth in the previous quarter, indicating continued economic resilience.
Adding to this, the US inflation accelerated in March due to the war-driven surge in Oil prices, bolstering expectations that the Fed could keep interest rates unchanged well into next year. This, along with persistent geopolitical uncertainties, assists the USD to rebound following the overnight slump to a one-and-a-half-week low, which turns out to be another factor lending support to the USD/JPY pair. Traders now look forward to the US ISM Manufacturing PMI for a fresh impetus.
Economic Indicator
Tokyo CPI ex Food, Energy (YoY)
The Tokyo Consumer Price Index (CPI), released by the Statistics Bureau of Japan on a monthly basis, measures the price fluctuation of goods and services purchased by households in the Tokyo region. The index is widely considered as a leading indicator of Japan’s overall CPI as it is published weeks before the nationwide reading. The gauge excluding food and energy is widely used to measure underlying inflation trends as these two components are more volatile. The YoY reading compares prices in the reference month to the same month a year earlier. Generally, a high reading is seen as bullish for the Japanese Yen (JPY), while a low reading is seen as bearish.
Read more.Last release: Thu Apr 30, 2026 23:30
Frequency: Monthly
Actual: 1.5%
Consensus: -
Previous: 1.7%
Source: Statistics Bureau of Japan
- NZD/USD falls as the New Zealand Dollar stays weak after softer mid-tier economic data.
- ANZ-Roy Morgan confidence fell to 80.3 in April from 91.3, the lowest since May 2023.
- US Dollar gains as Trump maintains Iran port blockade, raising concerns Strait of Hormuz may stay closed.
NZD/USD pulls back after registering over 1.25% gains in the previous day, trading around 0.5900 during the Asian hours on Friday. The pair depreciates as the New Zealand Dollar (NZD) remains subdued following the release of weaker mid-tier economic data from the country.
The ANZ-Roy Morgan Consumer Confidence Index declined to 80.3 in April from 91.3 in March, marking its lowest reading since May 2023. The index has dropped by 20 points over the past two months following the onset of the Middle East conflict, which pushed energy prices sharply higher.
Additionally, seasonally adjusted Building Permits in New Zealand decreased by 1.3% month-on-month in March, reversing an upwardly revised 2.8% gain in February. This represents the first contraction in building consents since last December.
The NZD/USD pair is also under pressure as the ongoing Middle East conflict supports demand for the safe-haven US Dollar (USD). Bloomberg reported on Thursday that US President Donald Trump said he would maintain the naval blockade of Iranian ports, amid concerns that the crucial Strait of Hormuz may not reopen in the near term. Trump also criticized congressional efforts to limit his war powers, including a recent Senate proposal that was rejected earlier in the day.
Meanwhile, the US Federal Reserve (Fed) kept its benchmark interest rate unchanged on Wednesday, in line with expectations. Fed Chair Jerome Powell noted that the economic outlook remains highly uncertain, adding that the Middle East conflict has been a contributing factor to that uncertainty.
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.
The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.
Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.
The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
The People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead on Friday at 6.8628 compared to the previous day's fix of 6.8608.
PBOC FAQs
The primary monetary policy objectives of the People's Bank of China (PBoC) are to safeguard price stability, including exchange rate stability, and promote economic growth. China’s central bank also aims to implement financial reforms, such as opening and developing the financial market.
The PBoC is owned by the state of the People's Republic of China (PRC), so it is not considered an autonomous institution. The Chinese Communist Party (CCP) Committee Secretary, nominated by the Chairman of the State Council, has a key influence on the PBoC’s management and direction, not the governor. However, Mr. Pan Gongsheng currently holds both of these posts.
Unlike the Western economies, the PBoC uses a broader set of monetary policy instruments to achieve its objectives. The primary tools include a seven-day Reverse Repo Rate (RRR), Medium-term Lending Facility (MLF), foreign exchange interventions and Reserve Requirement Ratio (RRR). However, The Loan Prime Rate (LPR) is China’s benchmark interest rate. Changes to the LPR directly influence the rates that need to be paid in the market for loans and mortgages and the interest paid on savings. By changing the LPR, China’s central bank can also influence the exchange rates of the Chinese Renminbi.
Yes, China has 19 private banks – a small fraction of the financial system. The largest private banks are digital lenders WeBank and MYbank, which are backed by tech giants Tencent and Ant Group, per The Straits Times. In 2014, China allowed domestic lenders fully capitalized by private funds to operate in the state-dominated financial sector.
Atsushi Mimura, Japan’s Vice Finance Minister for International Affairs and top foreign exchange official, said on Friday that he had no comment on foreign exchange intervention and crude oil futures. Mimura added that the official is in close contact with the United States (US) on currency.
Key quotes
No comment on Forex intervention.
Declines to comment on crude oil futures.
In close contact with US on forex.
No change to view on seeing moves by speculators.
Japan's golden week holiday period has just begun.
Market reaction
At the time of writing, the USD/JPY pair is trading around 157.25, up 0.42% on the day.
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.
US President Donald Trump complained about congressional efforts aimed at limiting his war powers, the latest of which the Senate rejected this afternoon. Trump was expected to hear about updated military options for Iran from Pentagon officials on Friday, CNN reported on Thursday.
US President said he was sticking with a naval blockade of Iranian ports amid concerns the vital Strait of Hormuz would not reopen anytime soon, per Bloomberg.
Market reaction
At the time of writing, the West Texas Intermediate (WTI) is up 0.05% on the day at $102.55.
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.
- EUR/USD gains ground to near 1.1730 in Friday’s early Asian session.
- ECB kept rates on hold at its April policy meeting on Thursday.
- Escalating tensions between the US and Iran could lift the US Dollar, a safe-haven asset.
The EUR/USD pair attracts some buyers to around 1.1730 during the early Asian session on Friday. The Euro (EUR) strengthens against the US Dollar (USD) after the European Central Bank (ECB) kept interest rates on hold at its April meeting.
The ECB governing council opted to hold its benchmark deposit facility rate at 2% on Thursday despite a surge in inflation in the Eurozone since the war in Iran began. According to the statement, the central bank said the inflation outlook was largely unchanged: "The upside risks to inflation and the downside risks to growth have intensified.”
The ECB stated that it would closely monitor the situation and take a data-dependent and meeting-by-meeting approach to determining its monetary policy stance. Economists anticipate a potential 25-basis-point (bps) rate increase, which would raise the key interest rate to 2.25% at the June meeting.
Ongoing conflict in the Middle East could boost a safe-haven currency such as the Greenback and act as a headwind for the major pair. US President Donald Trump said he was sticking with a naval blockade of Iranian ports amid concerns the vital Strait of Hormuz would not reopen anytime soon, Bloomberg reported on Thursday.
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
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