Forex News
- USD weakens on hot inflation signals and easing safe-haven demand.
- BoJ rate outlook firms as officials consider higher price forecasts.
- Iran war headlines swing sentiment, supporting the Yen on risk improvement.
The USD/JPY pair is trading with a bearish bias near the 158.90 region on Tuesday, extending recent losses as the US Dollar (USD) continues to soften amid improving risk sentiment on renewed hopes of United States (US)-Iran negotiations. On the one hand, Reuters reported that the US and Iran will return to Islamabad for peace talks later this week or early next week. On the other hand, however, the White House reported that there is no date yet for further discussions.
The Greenback is facing pressure following Tuesday’s US data, which strengthens the narrative of hot inflation. The March Producer Price Index (PPI) increased less than anticipated, at 3.8%, but not enough to alleviate concerns about persistent price pressure or reduce the urgency for the Federal Reserve (Fed) to implement further tightening measures.
On the Japanese side, the Japanese Yen (JPY) is gaining momentum as reports indicate that the Bank of Japan (BoJ) is considering raising its price forecasts. The BoJ will have a monetary policy meeting in about two weeks, as will the Fed. This reinforces expectations that policymakers may continue normalizing their economic policy.
Technical analysis:
On the four-hour chart, USD/JPY trades at 158.87, maintaining a bearish near-term bias as it remains capped below both the 20-period Simple Moving Average (SMA) at 159.24 and the 100-period SMA at 159.27. The pair is attempting to stabilize after recent losses, but the proximity of the first horizontal resistance at 158.94 reinforces the impression of overhead supply, while the Relative Strength Index around 42 suggests only modest, sub-neutral momentum and limited recovery strength for now.
On the downside, initial support is aligned at 158.78, with additional floors seen at 158.72 and 158.61, forming a relatively tight demand band that could slow further declines if tested. On the topside, a break above 158.94 would be needed to ease immediate pressure, with subsequent resistance clustered at the 20-period SMA near 159.24 and the 100-period SMA at 159.27, where sellers are likely to re-emerge unless momentum improves materially.
(The technical analysis of this story was written with the help of an AI tool.)
MUFG’s Senior Currency Analyst Michael Wan highlights that Trump has begun a US naval blockade of the Strait of Hormuz, but risk assets have rebounded as talks between the US and Iran continue. The durability of this improved sentiment is seen as contingent on enforcement of the blockade and prospects for a deal, with Asian markets particularly exposed due to their reliance on Hormuz energy flows.
Hormuz tensions and Asian FX sensitivity
"Trump began a US naval blockade of the Strait of Hormuz, but overall risk assets rebounded with signs that there continues to be talks between US and Iran."
"We think there are both positives in terms of the progress in negotiations and technical discussions that have already been made, but also meaningful negatives from a potential flare-up in tensions and especially for Asian markets which are highly dependent on the Strait of Hormuz for energy flows."
"Overall whether this positive risk sentiment holds in financial markets will partly depend on the extent of enforcement of the current blockade, and whether there is a narrow path towards a deal."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Christine Lagarde, President of the European Central Bank (ECB), spoke to Bloomberg TV on Tuesday. She claimed that they need to keep an eye on the medium term while checking data.
Key quotes:
We are between baseline and adverse scenario.
We need to keep eyes on medium term while checking data daily.
We have to be completely agile.
We have to be data dependent.
2022 shock was a combination of supply and demand, that was a vastly different situation.
We would need data to act but we wouldn't hesitate to act.
We need dialogue with fiscal policy leaders and ask them to be tailored, targeted.
This captain won't leave the ship with clouds on the horizon.”
ECB FAQs
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger 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.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
- USD/CAD pares some part of earlier losses as easing Oil prices weigh on the Canadian Dollar.
- US-Iran talks optimism lifts sentiment, keeping the US Dollar under pressure
- Softer US PPI data adds to USD weakness, capping upside in the pair
USD/CAD trims some of its earlier losses on Tuesday as easing Oil prices on renewed US-Iran talks optimism weigh on the commodity-linked Canadian Dollar (CAD), helping the pair recover from intraday lows even as improving risk sentiment keeps the US Dollar (USD) under broad pressure.
At the time of writing, USD/CAD is trading around 1.3761 after hitting a low of 1.3731, its lowest level since March 24. Meanwhile, the US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, is trading around 98.00, its lowest level since March 2.
The latest move comes as investors grow increasingly optimistic that the current two-week ceasefire could be extended or potentially made permanent. US President Donald Trump told The New York Post that talks with Iran “could be happening over the next two days” in Pakistan. This follows his earlier remarks that Washington had been approached by “the right people” in Iran, even after the US implemented a naval blockade targeting Iranian ports that took effect on Monday.
However, uncertainty remains elevated as key disagreements, particularly over Iran’s nuclear program, continue to complicate negotiations. Tensions around the Strait of Hormuz also persist, limiting a meaningful decline in Oil prices. Still, hopes that talks could resume have helped ease fears of an immediate escalation.
At the time of writing, WTI Crude Oil is trading around $89 per barrel, extending losses for a second consecutive day and down more than 4%. Any clear signs of de-escalation could push Oil prices lower and further weigh on the Canadian Dollar.
Lower Oil prices could ease pressure on the Federal Reserve and the Bank of Canada to tighten monetary policy amid rising inflation risks. Chicago Fed President Austan Goolsbee said on Tuesday that inflation expectations remain broadly anchored, but warned that prospects for rate cuts in 2026 could diminish if inflation does not show clear signs of easing.
On the data front, the US Producer Price Index (PPI) data for March came in softer than expected. The headline PPI rose by 0.5% MoM, below market expectations of 1.2% and unchanged from the previous reading of 0.5%, which was revised down from 0.7%. On an annual basis, PPI increased by 4.0%, missing forecasts of 4.6% and easing from the prior 3.4%.
Canadian Dollar Price Today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.29% | -0.44% | -0.37% | -0.23% | -0.48% | -0.66% | -0.37% | |
| EUR | 0.29% | -0.15% | -0.07% | 0.06% | -0.20% | -0.39% | -0.09% | |
| GBP | 0.44% | 0.15% | 0.09% | 0.21% | -0.05% | -0.23% | 0.06% | |
| JPY | 0.37% | 0.07% | -0.09% | 0.15% | -0.11% | -0.29% | 0.00% | |
| CAD | 0.23% | -0.06% | -0.21% | -0.15% | -0.26% | -0.42% | -0.14% | |
| AUD | 0.48% | 0.20% | 0.05% | 0.11% | 0.26% | -0.18% | 0.11% | |
| NZD | 0.66% | 0.39% | 0.23% | 0.29% | 0.42% | 0.18% | 0.29% | |
| CHF | 0.37% | 0.09% | -0.06% | -0.01% | 0.14% | -0.11% | -0.29% |
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 Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).
The US Treasury Secretary Scott Bessent crossed the wires earlier, stating that he’s “quite confident” that core prices would continue to edge lower in the US despite the Iran war, and that he’s pressing the Federal Reserve to cut rates.
Bessent added that he understood Fed policymakers wanted to assess economic developments linked to the Middle East conflict before deciding what to do with rates. He added that Trump’s nominee, Warsh, should lead the next easing cycle. When asked about Powell standing as Fed Chair if the Senate does not approve Warsh’s nomination, he said that “We want Kevin Warsh in as soon as possible.”
Key highlights:
FED COULD OBSERVE BEFORE THEY CUT RATES; EMPHASIS IS THAT THEY WILL NEED TO CUT RATES
FED SHOULD WAIT UNTIL WARSH IS IN PLACE
WE HAVE PUT IN 10% SECTION 122 TARIFFS; PRESIDENT HASN’T OPTED TO LIFT THAT RATE TO 15% AT THIS POINT IN TIME
I’M QUITE CONFIDENT THAT CORE INFLATION WILL CONTINUE TO GO DOWN
WE WANT TO GET A HOUSING BILL PASSED, WANT KEVIN WARSH IN AS FED CHAIR AS SOON AS POSSIBLE
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.
- Silver rallies on Tuesday, climbing toward the $79 area after rebounding from $72.60 earlier in the week.
- Softer-than-expected US Producer Price Index data weighs on the US Dollar and supports precious metals.
- Hopes of renewed US-Iran negotiations improve market sentiment and further pressure the Greenback.
Silver (XAG/USD) surges on Tuesday, trading around $78.80 at the time of writing, up 4.16% on the day as strong buying interest pushed Silver to a daily high of $79.32. The white metal rebounds sharply after touching lows near $72.60 on Monday, benefiting from a broad weakening of the US Dollar (USD) and improving market sentiment.
Precious metals are gaining ground as investors also react to softer-than-expected inflation data in the United States (US). The Producer Price Index (PPI) published by the US Bureau of Labor Statistics earlier in the day, shows that annual producer inflation rose by 4% in March, below market expectations of 4.6%, while the monthly reading increased by 0.5%, also missing forecasts. The weaker figures are helping to dampen hawkish speculations about the future Federal Reserve (Fed) monetary policy, which is providing support for non-interest-bearing assets such as Silver.
At the same time, the US Dollar remains under pressure across currency markets. The US Dollar Index (DXY), which tracks the performance of the Greenback against a basket of major currencies, declines toward six-week lows as traders adjust their expectations for US interest rates following the softer inflation figures.
Geopolitical developments are also shaping market sentiment. Reports suggesting the possibility of renewed negotiations between the US and Iran are boosting risk appetite after tensions escalated earlier in the week. According to Reuters, diplomatic efforts could lead to a new round of talks in Islamabad in the coming days, raising hopes of a potential de-escalation following the breakdown of previous discussions.
These developments come after US President Donald Trump indicated that Iranian officials had reached out to seek a possible agreement, suggesting that diplomatic channels remain open despite ongoing disagreements over Iran’s nuclear program.
In this context, the combination of a weaker US Dollar, softer inflation signals and easing geopolitical tensions is reinforcing demand for precious metals, allowing Silver to extend its recovery.
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.
- Sterling climbs as renewed US-Iran talks lift overall market sentiment.
- Softer US producer inflation data drags the US Dollar to six-week lows.
- Traders now await UK GDP, US jobless claims and central bank speakers.
The Pound Sterling (GBP) advances on Tuesday as traders remain optimistic about a possible resolution to the US-Iran conflict. At the same time, the US Dollar (USD) weakens amid a hot US inflation report that missed forecasts of a higher print. At the time of writing, the GBP/USD pair trades near 1.3590, gaining 0.61%.
Sterling gains on Iran deal hopes as cooling prices hurt the USD
On Tuesday, geopolitics continue to drive price action. Several news agencies reported that the US and Iran are preparing to resume talks, which could happen as early as this week. Meanwhile, a US senior official said that “a lot is happening today and tomorrow the US and Iran have all of the ingredients for a deal, but it’s not all there yet,” according to Fox News.
This weighed on the Greenback’s safe-haven appeal, as shown by the US Dollar Index (DXY). The DXY, which measures the buck’s performance against a basket of six currencies, is down 0.34% at 98.03, at near six-week lows.
Worth noting that the positive correlation between West Texas Intermediate (WTI) Oil and the Greenback is undermining the latter. Further negotiations in the Middle East are pushing WTI lower, with the contract down 4.50% on the day at $93.50 per barrel.
In the meantime, the US Producer Price Index (PPI) in March missed estimates, rising 4% YoY instead of the 4.6% expected, while excluding volatile items, the core PPI expanded at a 3.6% YoY pace, up from 3.5%.
Earlier, the ADP Employment Change 4-week average rose by 39.25K, up from 26K in the previous week, highlighting a resilient labor market.
According to Nick Rees, head of macro research at Monex Europe, GBP/USD is expected to underperform as traders return to domestic political issues in the UK.
“We do have those local elections coming up at the beginning of May, and we don’t think markets or indeed a lot of politicians have grasped quite how bad these could be for the Labor Party,” Rees said.
Ahead, traders will eye speeches by central bankers, from the Bank of England and from the Federal Reserve. Economic data releases are expected through Thursday, led by UK GDP. In the US, traders will eye jobless claims data.
GBP/USD Price Forecast: Technical outlook
In the daily chart, GBP/USD trades at 1.3572. The pair holds above the cluster of the 50-, 100- and 200-day simple moving averages (SMAs) around 1.3429, which reinforces a constructive near-term bias as buyers defend the recent rebound. Price remains within the broader contracting structure defined by the rising support and descending resistance trend lines, while the latest advance away from the SMA floor suggests dip-buying interest is still present despite prior caps under the downtrend line.
On the topside, initial resistance is seen near the former support trend-line break around 1.3812, followed by the descending resistance line originating at 1.3869. On the downside, immediate support is located at the 1.3572 area, with the SMA cluster around 1.3429 providing a more important demand zone; a daily close back below that region would weaken the bullish tone and expose a deeper correction within the broader range.
(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.
Scotiabank notes the Pound is up 0.3% versus the Dollar, trading at pre‑conflict highs as investors welcome strong demand for UK debt. Domestic data risk is light before trade and industrial production, while BoE speakers, including Gov. Bailey, pose event risk. Technically, GBP/USD shows bullish RSI, with support below 1.3450 and scope toward mid‑February highs near 1.37.
Pound supported by issuance demand and BoE risk
"The pound is also entering Wednesday’s NA session with a 0.3% gain and extending its latest recovery to fresh local highs at levels that last prevailed ahead of the US/Iran conflict."
"Domestically, market participants are cheering strong demand for UK debt issuance, with sizeable orders for both Treasury offerings and those of large financial institutions."
"Data risk remains limited ahead of Thursday’s trade and industrial production figures, while BoE risk has returned with comments from the MPC’s Mann—stressing a need to ‘be active’ whether ‘that means [a] big rise or cut or long hold’."
"Bullish—the RSI is now firmly in bullish territory and pushing above 60, as spot extends its recovery to fresh local highs above 1.35."
"We see limited resistance between current levels and the mid-Feb peaks around 1.37 and now look to support below 1.3450."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Megan Greene, external member of the Bank of England's (BoE) Monetary Policy Committee (MPC), Reuters reported on Tuesday that the United Kingdom’s (UK) economic activity was weak before the Iran war but that at the same time, the war impact is inflationary.
Key takeaways:
UK activity was already pretty weak before the Iran war.
At the same time, war impact is inflationary.
I was not convinced the impact of negative supply shocks had worn off.
To my mind, the inflationary piece of this is really important.
Second-round effects.
We won't have definitive evidence of second-round effects for a while, could take months.
We can't just look through negative supply shocks, view needs to be more nuanced.”
BoE FAQs
The Bank of England (BoE) decides monetary policy for the United Kingdom. Its primary goal is to achieve ‘price stability’, or a steady inflation rate of 2%. Its tool for achieving this is via the adjustment of base lending rates. The BoE sets the rate at which it lends to commercial banks and banks lend to each other, determining the level of interest rates in the economy overall. This also impacts the value of the Pound Sterling (GBP).
When inflation is above the Bank of England’s target it responds by raising interest rates, making it more expensive for people and businesses to access credit. This is positive for the Pound Sterling because higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls below target, it is a sign economic growth is slowing, and the BoE will consider lowering interest rates to cheapen credit in the hope businesses will borrow to invest in growth-generating projects – a negative for the Pound Sterling.
In extreme situations, the Bank of England can enact a policy called Quantitative Easing (QE). QE is the process by which the BoE substantially increases the flow of credit in a stuck financial system. QE is a last resort policy when lowering interest rates will not achieve the necessary result. The process of QE involves the BoE printing money to buy assets – usually government or AAA-rated corporate bonds – from banks and other financial institutions. QE usually results in a weaker Pound Sterling.
Quantitative tightening (QT) is the reverse of QE, enacted when the economy is strengthening and inflation starts rising. Whilst in QE the Bank of England (BoE) purchases government and corporate bonds from financial institutions to encourage them to lend; in QT, the BoE stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive for the Pound Sterling.
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.
