Forex News

Brown Brothers Harriman’s (BBH) Elias Haddad highlights that NZD/USD has surged over 2% on improved risk sentiment and a hawkish hold from the RBNZ. The central bank kept the OCR at 2.25% but signalled that temporary inflation would allow gradual normalization, while warning that decisive hikes would be needed if second-round inflation effects or higher medium-term expectations emerge, suggesting markets may be overpricing the pace of tightening.

RBNZ stance underpins New Zealand Dollar

"NZD/USD surged by over 2% on a solid rebound in risk sentiment. The RBNZ delivered a hawkish hold."

"The RBNZ noted that if the increase in near-term inflation is temporary, the OCR can be normalized gradually to more neutral levels (RBNZ estimated neutral range is between 2.3% and 4.1%)."

"The swaps curve has more than fully priced in a 25bps OCR increase to 2.50% by September and a total of 100bps of hikes over the next twelve months. The latest US-Iran ceasefire agreement reduces the risk of a more persist energy shock and argues for a more gradual RBNZ rate hike cycle than markets imply."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• EUR/JPY may rebound toward the upper ascending channel boundary around 185.70.
• The Relative Strength Index near 59 signals sustained buying pressure.
• The pair may find initial support at the nine-day EMA of 184.33.

EUR/JPY edges lower after two days of gains, trading around 185.00 during the European hours on Wednesday. The technical analysis of the daily chart suggests the currency cross is moving upwards within the ascending channel pattern, indicating bullish bias.

The near-term bias stays mildly bullish as the EUR/JPY cross holds comfortably above the 50-day Exponential Moving Average (EMA), while the nine-day EMA rises above the medium-term average, reinforcing a short-term uptrend within an established broader advance.

Momentum backs this tone, with the Relative Strength Index (RSI) around 59, holding above the 50 line and confirming persistent buying pressure rather than overbought excess.

The EUR/JPY cross may retest the immediate resistance at the upper ascending channel boundary around 185.70. Further advances above the channel would reinforce the bullish bias and lead the EUR/JPY cross to explore the region around the all-time high of 186.88, reached on January 23.

On the downside, the initial support lies at the nine-day EMA of 184.33. A break below the short-term average would weaken the bullish bias and lead the EUR/JPY cross to test the 50-day EMA at 183.58, followed by the lower boundary of the ascending channel around 183.00.

(The technical analysis of this story was written with the help of an AI tool.)

UOB’s Jester Koh notes that the Reserve Bank of India (RBI) kept the policy repo rate at 5.25% in April 2026 and retained a neutral stance. He highlights RBI’s new Gross Domestic Product (GDP) and Consumer Price Index (CPI) projections, flags growth downside and inflation upside risks, and expects the policy repo rate to remain unchanged at 5.25% through 2026 as policy flexibility is preserved.

RBI holds steady and keeps options open

"At its 8 Apr 2026 MPC meeting, the Reserve Bank of India (RBI) unanimously voted to keep the policy repo rate unchanged at 5.25%, in line with expectations of all 34 analysts surveyed by Bloomberg (including UOB). Accordingly, the standing deposit facility (SDF) and marginal standing facility (MSF) rates were also left unchanged at 5.00% and 5.50%, respectively. The MPC continued to maintain a neutral monetary policy stance."

"On growth, based on the new GDP series (base year 2022-23), the RBI projects growth to moderate to 6.9% in FY27 (1Q: 6.8%, 2Q: 6.7%, 3Q: 7.0%, 4Q: 7.2%), down from 7.6% in FY26 based on the second advance estimates."

"On inflation, the RBI released its FY27 CPI projections based on the new CPI series (2024=100) and expects inflation to accelerate to 4.6% (Feb FY26 MPC forecast: 2.1%). Upside risks stem from “persistently elevated energy prices due to the West Asia conflict and possible El Niño conditions, which could adversely affect the southwest monsoon”."

"Nevertheless, the RBI noted that underlying inflationary pressures (beyond food and energy) are expected to remain contained. Our FY27 inflation projection is slightly higher than the RBI’s at 4.8%, driven by low base effects and potential tightening in food supply, as fertilizer shortages could weigh on crop yields during the Zaid and Kharif sowing seasons."

"Given uncertainty over the extent of the drag on growth and the upside risks to inflation, the RBI is likely to preserve policy flexibility, as reinforced by its neutral monetary policy stance which enables the central bank “to respond judiciously to incoming information”. We maintain our forecast that the RBI will keep the policy repo rate unchanged at 5.25% through 2026."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Eurozone Retail Sales, a key measure of consumer spending, decline by 0.2% month-on-month (MoM) in February, as expected, slower than 0.1% in January. On an annualized basis, the consumer spending measure expands 1.7%, faster than 1.6% estimates, but slower than the preliminary reading of 2.1%, revised higher from 2%.

Market reaction

No immediate impact on the Euro (EUR) has been observed, following the Eurozone Retail Sales data release. As of writing, EUR/USD trades 0.8% higher to near 1.1690.

ING’s Chris Turner notes that risk assets are rebounding after the Iran ceasefire, with higher equities, a bullish steepening in yield curves and broad currency gains against the US Dollar (USD). He argues March’s Dollar strength is unlikely to fully unwind, even as US Dollar Index (DXY) has gapped lower and could fall toward 98.50, with Fed cuts only modestly priced for late 2026.

DXY slide seen limited near 98

"Expect now a close monitoring of traffic flow through the Strait, where a significant pick-up in volume would weigh further on oil prices and reverse the stagflationary investment trends witnessed in markets over the last month. These trends had been dominated by the dramatic bearish flattening of yield curves, equity weakness and a stronger dollar."

"The US data calendar is relatively light today, with only the FOMC minutes released tonight. On the subject of the Federal Reserve, Philip Jefferson was the latest member to say that monetary policy is 'well-positioned' for the current environment. Markets have now started to price back in Fed rate cuts towards the end of this year (-14bp priced for December), although pricing could prove quite sticky around unchanged rates."

"DXY rallied just over 3% through March. It has gapped lower today, and a further sell-off to 98.50 looks possible. However, there remains too much uncertainty to expect a full unwind of the March rally, and it is therefore premature to call for a break under 98.00."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)