Forex News
- WTI gains strong positive traction on Thursday amid a further escalation of conflicts in the Middle East.
- Suspected Iranian attacks on oil tankers in the Strait of Hormuz fuel supply worries and lend support.
- The record release of emergency oil reserves and sustained USD buying keep a lid on further upside.
West Texas Intermediate (WTI) Crude Oil prices trim a part of strong intraday gains to the $94.75-$94.80 region on Thursday, though the downside seems limited amid supply disruption fears. The commodity, however, retains positive bias for the third straight day and currently trades below the $93.00 mark, still up over 6% for the day.
As the US-Israeli war on Iran shows no signs of ending, reports of suspected Iranian attacks on oil tankers in the northern Persian Gulf near Iraq and Kuwait fuel concerns about supply disruptions from the key oil-producing region. Moreover, Iran has warned that no crude will pass through the Strait of Hormuz, a critical maritime chokepoint. This turns out to be a key factor that triggers a fresh leg up in Crude Oil prices.
Meanwhile, the International Energy Agency (IEA) announced that its 32 member countries unanimously agreed to make 400 million barrels of Oil from their emergency reserves available to the market. Moreover, the Trump administration plans to release 172 million barrels from the US emergency oil reserve as part of the coordinated effort to ease soaring crude and gasoline prices amid the ongoing Iran war.
This move is intended to limit supply shocks and hold back bulls from placing aggressive bets. Moreover, worries about the war-driven inflationary pressure remain supportive of a further rise in the US Treasury bond yields and assist the US Dollar (USD) to gain some follow-through positive traction for the third straight day. A firmer Greenback further contributes to capping the USD-denominated commodity.
Nevertheless, the aforementioned supportive fundamental backdrop seems tilted in favor of bullish traders and suggests that the path of least resistance for Crude Oil prices is to the upside. Hence, any corrective slide could be seen as a buying opportunity and is more likely to remain cushioned as the market focus remains glued to geopolitical developments.
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.
The Chinese government has effectively banned refined fuel exports for March "with immediate effect”, Reuters reported on Thursday. This measure comes as another step to pre-empt a potential domestic fuel shortage caused by the US-Israeli war on Iran.
According to the sources, the National Development and Reform Commission (NDRC) banned shipments of gasoline, diesel, and aviation fuel.
Market reaction
At the time of writing, the West Texas Intermediate (WTI) is up 6.00% on the day at $92.16.
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.
- USD/CHF gains momentum to near 0.7820 in Thursday’s early European session.
- Fed is anticipated to leave the interest rate unchanged at its March policy meeting.
- The US PCE inflation and GDP reports will be the highlights on Friday.
The USD/CHF pair gathers strength to around 0.7820 during the early European session on Thursday. The US Dollar (USD) strengthens against the Swiss Franc (CHF) as soaring oil prices threaten to spur inflation and force the US Federal Reserve (Fed) to adopt more hawkish policy stances.
The war in the Middle East stoked fears of inflation rising in the US, which increases the likelihood of the Fed keeping interest rates higher for longer. The US central bank is expected to hold rates steady at its upcoming March 17-18 meeting. Many economists anticipate the next rate cut will not occur until June or July 2026.
Oman has evacuated all vessels from its major oil export terminal at Mina Al Fahal as a precaution, according to Bloomberg on Thursday. Iran, meanwhile, has started its "most intense operation since the beginning of the war." Tehran increased its efforts to block the vital oil conduit, the Strait of Hormuz. Rising tensions in the Middle East could boost the safe-haven currencies such as the CHF against the USD.
Traders will take more cues from the US Personal Consumption Expenditures (PCE) Price Index report for January, which is due on Friday. Any signs of softer inflation in the US could drag the Greenback in the near term. The preliminary reading of the US Gross Domestic Product (GDP) for the fourth quarter (Q4) will also be published.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact 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 when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
- AUD/USD drifts lower on Thursday and snaps a four-day winning streak to a multi-year peak.
- Rising Middle East tensions continue to underpin the USD and exert pressure on spot prices.
- Bets for an imminent RBA rate hike next week could limit losses amid a bullish technical setup.
The AUD/USD pair attracts some sellers during the Asian session on Thursday, and for now, seems to have snapped a four-day winning streak to its highest level since June 2022, around the 0.7185 region, touched the previous day. Spot prices currently trade around the 0.7130 area, down 0.30% for the day, though the downside potential seems limited.
A further escalation of the military conflict between Israel, US forces, and Iran tempers investors' appetite for riskier assets, and benefits the safe-haven US Dollar (USD). Moreover, a fresh leg up in Crude Oil prices fuels inflationary concerns and dim hopes for near-term interest rate cuts by the US Federal Reserve (Fed). The outlook, in turn, continues to push the US Treasury bond yields higher and further underpins the USD, exerting downward pressure on the AUD/USD pair.
Meanwhile, hawkish comments from the Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser earlier this week forced traders to bring forward expectations for a second-rate hike as early as next week. This, in turn, might continue to act as a tailwind for the Australian Dollar (AUD) and help limit deeper losses for the AUD/USD pair. Hence, it will be prudent to wait for strong follow-through selling before confirming that spot prices have topped out in the near term.
From a technical perspective, the currency pair showed some resilience below the 200-period Exponential Moving Average (EMA) on the 4-hour chart earlier this week. A subsequent move beyond the 0.7130 horizontal barrier was seen as a fresh trigger for the AUD/USD bulls, suggesting that the corrective pullback could be seen as a buying opportunity. Moreover, the Relative Strength Index (RSI) near 55 stays above its midline, aligning with a modest bullish outlook.
The Moving Average Convergence Divergence (MACD) indicator, on the other hand, has cooled from recent highs but remains marginally positive. The histogram has been contracting, indicating a loss of immediate buying pressure rather than an outright reversal. Furthermore, the MACD line is still above the signal line, suggesting fading yet intact upside momentum. Initial support emerges around 0.7120, guarding a deeper pullback toward 0.7080 and then the 0.7040 area.
The latter nears the previous reaction lows that align ahead of the 200-period EMA on the 4-hour chart. A sustained break below 0.7040 would expose the psychological 0.7000 handle as the next bearish target.
On the upside, immediate resistance sits at 0.7150, with a break opening the way toward 0.7175 and then the 0.7220 region. As long as AUD/USD defends support above 0.7080, the technical path favors gradual gains toward the upper resistance band.
(The technical analysis of this story was written with the help of an AI tool.)
AUD/USD 4-hour chart
Australian Dollar Price This week
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies this week. Australian Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.12% | -0.19% | 0.67% | -0.08% | -1.98% | -0.58% | 0.33% | |
| EUR | -0.12% | -0.33% | 0.57% | -0.22% | -2.12% | -0.71% | 0.19% | |
| GBP | 0.19% | 0.33% | 0.91% | 0.11% | -1.80% | -0.38% | 0.51% | |
| JPY | -0.67% | -0.57% | -0.91% | -0.74% | -2.62% | -1.21% | -0.33% | |
| CAD | 0.08% | 0.22% | -0.11% | 0.74% | -1.91% | -0.48% | 0.40% | |
| AUD | 1.98% | 2.12% | 1.80% | 2.62% | 1.91% | 1.44% | 2.36% | |
| NZD | 0.58% | 0.71% | 0.38% | 1.21% | 0.48% | -1.44% | 0.90% | |
| CHF | -0.33% | -0.19% | -0.51% | 0.33% | -0.40% | -2.36% | -0.90% |
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 Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
- NZD/USD weakens as a stronger US Dollar gains on rising energy prices.
- US Dollar Index rises toward three-month highs above 99.50.
- The NZD remains under pressure as investors remain cautious amid escalating geopolitical tensions in the Middle East.
NZD/USD remains weaker for the third consecutive day, trading around 0.5900 during the Asian hours on Thursday. The pair declines as the US Dollar (USD) remains stronger, as surging energy prices heightened inflationary risks and reduced the likelihood of Federal Reserve (Fed) interest rate cuts.
The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, rises toward three-month highs and is trading around 99.50 at the time of writing. Traders will now focus on the upcoming US Personal Consumption Expenditures (PCE) data due Friday for further policy clues.
US Consumer Price Index (CPI) released on Wednesday showed inflation rising 0.3% month-over-month (MoM) in February and 2.4% year-over-year (YoY), largely in line with market expectations. Core CPI, which excludes food and energy, increased 0.2% MoM and 2.5% YoY.
The relatively steady inflation figures reduced fears of a sudden surge in price pressures and reinforced expectations that the Federal Reserve may keep interest rates steady in the near term. Analysts note that the latest CPI report does not yet fully reflect the recent surge in oil prices caused by geopolitical developments.
The New Zealand Dollar (NZD) remains pressured as investors stay cautious amid rising geopolitical tensions in the Middle East. Surging energy prices are also fueling inflation concerns in New Zealand, with analysts expecting domestic price pressures to stay more persistent than previously anticipated, reinforcing expectations of further tightening by the Reserve Bank of New Zealand (RBNZ).
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.
- Gold drifts lower for the second straight day on Thursday, though it lacks follow-through selling.
- Rising Oil prices revive inflation concerns, lifting US bond yields and the USD, and exerting pressure.
- A further escalation of Middle East tensions limits the downside for the safe-haven precious metal.
Gold (XAU/USD) trades with a negative bias for the second consecutive day on Thursday, though it lacks follow-through selling and stalls the intraday slide near the $5,125 area. A fresh leg up in Crude Oil prices threatens the inflation outlook and overshadows signs of moderating price growth in the US, dimming hopes for near-term interest rate cuts by the US Federal Reserve (Fed). This assists the US Dollar (USD) to prolong its uptrend for the third day and exerts pressure on the non-yielding yellow metal.
The US Bureau of Labor Statistics reported on Wednesday that the headline Consumer Price Index (CPI) rose 0.2% in February and the yearly rate held steady at 3.1%. Investors, however, remain worried about a surge in inflation amid a further escalation of the military conflict between Israel, US forces and Iran. In fact, Iran’s Islamic Revolutionary Guard Corps (IRGC) said that it launched a joint operation with Lebanon's Hezbollah against targets in Israel, Jordan, and Saudi Arabia. Moreover, reports that two oil tankers were attacked in the northern Persian Gulf near Iraq and Kuwait add to worries about supply disruptions from the Middle East, triggering a rally of over 6% in Crude Oil prices.
The International Monetary Fund (IMF) Managing Director Kristalina Georgieva warned on Monday that a sustained 10% rise in Oil prices for a year would push global inflation by 40 basis points (bps). This might force the US Fed to delay cutting interest rates, which leads to a further rise in the US Treasury bond yields. This, in turn, continues to push the US Treasury bond yields higher, which remains supportive of the bid tone surrounding the USD and is seen driving flows away from the Gold. However, rising geopolitical tensions offer some support to the safe-haven XAU/USD, warranting some caution for aggressive bearish traders before positioning for any further depreciating move.
Traders now look forward to the release of the usual US Weekly Initial Jobless Claims, due later today, for some impetus ahead of the US Personal Consumption Expenditures (PCE) Price Index on Friday. The focus, however, will remain on developments surrounding the US-Israel-Iran war and Oil price dynamics, which would influence the central banks' policy outlook. Apart from this, the broader risk sentiment should contribute to infusing some volatility around the Gold price.
XAU/USD 4-hour chart
Gold bears need to wait for a break below channel support and 200-period SMA on H4
The XAU/USD pair holds above the upward-sloping 200-period Simple Moving Average (SMA) on the 4-hour chart, around $5,083, keeping the broader uptrend intact within the ascending channel. Meanwhile, the Moving Average Convergence Divergence (MACD) histogram has eased from recent highs but remains in positive territory, suggesting momentum is cooling rather than reversing. Moreover, the Relative Strength Index (RSI) hovers just below 50, aligning with a modest upside tilt while signaling a lack of strong directional conviction.
Initial support emerges at the channel floor near $5,116, aligned just above the 200-period SMA, and a break below this area would expose deeper downside toward the $5,080 region. On the topside, immediate resistance stands at $5,200, with a sustained move above this barrier opening the way toward the channel resistance near $5,570. As long as the price holds above $5,116, dips are likely to attract buyers, while rejection below $5,200 would keep XAU/USD confined to a consolidative phase within the broader bullish channel.
(The technical analysis of this story was written with the help of an AI tool.)
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.
Gold prices fell in India on Thursday, according to data compiled by FXStreet.
The price for Gold stood at 15,361.05 Indian Rupees (INR) per gram, down compared with the INR 15,437.62 it cost on Wednesday.
The price for Gold decreased to INR 179,168.10 per tola from INR 180,061.40 per tola a day earlier.
Unit measure | Gold Price in INR |
|---|---|
1 Gram | 15,361.05 |
10 Grams | 153,601.70 |
Tola | 179,168.10 |
Troy Ounce | 477,782.80 |
FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
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.
(An automation tool was used in creating this post.)
- Indian Rupee declines as volatile oil prices and weak domestic equities weighed on market sentiment.
- Oil rises as fears of a prolonged Iran conflict overshadow coordinated reserve releases by major economies.
- USD/INR rises as a firm US Dollar and surging energy prices dampen expectations of Federal Reserve rate cuts.
USD/INR continues its winning streak for the third successive session on Thursday. The Indian Rupee (INR) remained under pressure as volatile oil prices and weak domestic equities weighed on sentiment, though intermittent US Dollar (USD) sales by state-run banks helped limit losses, traders told Reuters.
Oil prices rise due to shipping disruptions through the strategic Strait of Hormuz. Crude extended gains as the risk of a prolonged Iran conflict overshadowed a coordinated release of oil reserves by major economies. Markets also viewed the emergency supply measures as insufficient even after the International Energy Agency (IEA) agreed to its largest-ever release of 400 million barrels.
Meanwhile, the USD/INR pair strengthened as the US Dollar remained firm. Surging energy prices have heightened forward-looking inflation risks, reducing expectations that the Federal Reserve (Fed) will cut interest rates soon.
Meanwhile, recent inflation data suggested price pressures remain relatively contained, reinforcing expectations that the Fed may keep policy steady in the near term. Analysts also noted that the latest inflation figures do not yet fully capture the recent surge in oil prices driven by geopolitical tensions.
The February US Consumer Price Index (CPI) released on Wednesday showed inflation rising 0.3% month-over-month (MoM) and 2.4% year-over-year (YoY), largely in line with market expectations. Core CPI, which excludes food and energy, increased 0.2% MoM and 2.5% YoY. Traders will now focus on the upcoming US Personal Consumption Expenditures (PCE) data due Friday for further policy clues.
Technical Analysis: USD/INR eyes record high of 92.81 near ascending channel upper boundary
USD/INR trades around 92.70 on Thursday. The technical analysis of the daily chart indicates a persistent bullish bias as the pair rises within the ascending channel pattern.
The near-term bias is bullish as the USD/INR pair holds above both the rising 50- and nine-day Exponential Moving Averages (EMAs), keeping the recent breakout sequence intact after rebounding from the 91.00–91.25 area. Momentum remains positive with the 14-day Relative Strength Index (RSI) near 72 and pushing deeper into overbought territory, signaling firm upside pressure even as the rally becomes stretched.
The USD/INR pair targets the all-time high of 92.81, reached on March 9, followed by the ascending channel’s upper boundary at 92.90. On the downside, primary support lies at the nine-day EMA at 92.23. A break below this level would weaken the short-term momentum and expose the 50-day EMA at 91.17, followed by the channel’s lower boundary near 90.90.
(The technical analysis of this story was written with the help of an AI tool.)
Indian Rupee FAQs
The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee.
The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference.
Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee.
Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.
- AUD/JPY weakens to around 113.40 in Thursday’s early European session.
- The cross keeps the bullish vibe, but further consolidation cannot be ruled out with overbought RSI momentum.
- The first upside barrier emerges at 113.70; the initial support level to watch is 110.40.
The AUD/JPY cross attracts some sellers to near 113.40 during the early European session on Thursday. Escalating tensions in the Middle East continue to boost the safe-haven currencies such as the Japanese Yen (JPY) against the Australian Dollar (AUD).
Bloomberg reported on Thursday that Oman has evacuated all vessels from its key oil export terminal at Mina Al Fahal as a precautionary measure. The evacuation order came after drones struck fuel tanks at Oman’s Salalah Port on Wednesday, while others were intercepted. Meanwhile, Iran has launched its “most intense operation since the beginning of the war. Tehran stepped up its efforts to halt traffic through the Strait of Hormuz, the critical oil conduit. Signs of a prolonged conflict in the Middle East could weigh on the riskier assets, such as the Aussie.
On the other hand, the hawkish expectation from the Reserve Bank of Australia (RBA) might help limit the AUD’s losses. Traders raise their bets that the RBA will raise interest rates next week as the conflict in the Middle East drags on, triggering a spike in the oil price and leaving the central bank more worried about inflation.
Technical Analysis:
In the daily chart, the near-term bias of AUD/JPY is bullish as price holds near recent highs after an extended advance from the 107.00 area. The cross stays well above the rising 100-day EMA around 106.00, which underpins the broader uptrend. The latest Bollinger structure shows price pushing above the upper band near 113.65, signaling strong upside momentum but also stretched conditions after the recent breakout above the mid-band cluster around 110.40. RSI around 70 confirms firm bullish momentum, though it also warns that upside could slow as the pair enters overbought territory.
Initial resistance is aligned with the recent peak and upper Bollinger Band at 113.70, with a sustained break opening the way toward the 115.00 region. On the downside, first support emerges at the prior consolidation and mid-Bollinger area near 110.40, followed by stronger support around 108.50 where the Bollinger mid-line and recent swing lows converge. A daily close below 108.50 would weaken the bullish structure and expose the 100-day EMA zone near 106.00 as the next downside objective.
(The technical analysis of this story was written with the help of an AI tool.)
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.
- EUR/USD weakens as a stronger US Dollar gains on rising energy prices.
- WTI price climbed as tightening supply from the Iran conflict outweighed coordinated emergency reserve releases by major economies.
- ECB’s Schnabel warned policymakers must monitor persistent energy shocks and stay alert to rising inflation risks in Europe.
EUR/USD extends its losses for the third successive session, trading around 1.1540 during the Asian hours on Thursday. The pair depreciates as the US Dollar (USD) remains stronger, as surging energy prices heightened inflationary risks and reduced the likelihood of Federal Reserve (Fed) interest rate cuts.
The February US Consumer Price Index (CPI) released on Wednesday showed inflation rising 0.3% month-over-month (MoM) and 2.4% year-over-year (YoY), largely in line with market expectations. Core CPI, which excludes food and energy, increased 0.2% MoM and 2.5% YoY.
The relatively steady inflation figures reduced fears of a sudden surge in price pressures and reinforced expectations that the Federal Reserve may keep interest rates steady in the near term. Analysts note that the latest CPI report does not yet fully reflect the recent surge in oil prices caused by geopolitical developments. US Personal Consumption Expenditures (PCE) will be eyed on Friday.
Michiel Tukker and Benjamin Schroeder of ING Group say Euro (EUR) rates remain highly sensitive to energy prices, with markets still pricing European Central Bank rate hikes in 2026. They note that falling energy prices could erase ECB hike expectations and push 2-year yields lower, while persistently high energy costs may initially steepen the euro swap curve before weighing on longer-dated rates.
Isabel Schnabel, an executive board member of the European Central Bank, said policymakers must monitor persistent energy price shocks and remain alert to upside inflation risks in Europe. Moreover, Joachim Nagel, a Governing Council member of the European Central Bank and head of the Deutsche Bundesbank, said the ECB stands ready to act if higher energy costs from the Iran war lead to persistently higher Eurozone inflation.
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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