Forex News
- Gold price jumps to around $4,775 in Wednesday’s early Asian session.
- Trump delays bombing for two weeks.
- Shifting interest rate expectations might cap the upside for yellow metal.
Gold price (XAU/USD) rises to near $4,775 during the early Asian session on Wednesday. The precious metal attracts some buyers after US President Donald Trump agrees to suspend Iran bombing for two weeks.
Trump revealed via a post on Truth Social that he will suspend the attacks for two weeks. This action came after Pakistan, a mediator between the US and Iran, requested that Trump grant a two-week ceasefire and extension to a deadline he imposed on Iran to end its blockade of Gulf oil.
Oil prices have surged since the Iran conflict intensified, raising supply concerns. Higher energy costs feed into inflation, leaving central banks with little leeway to cut interest rates. Gold is often used amid geopolitical uncertainty but does not yield interest, making it less attractive when interest rates are high.
Traders will keep an eye on the minutes from the Federal Reserve’s (Fed) meeting in March, which will be released on Wednesday.
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.
US President Donald Trump revealed via a post in Truth Social that he's suspending the attacks by two weeks on Iran. His full post in his account in Truth Social said:
Based on conversations with Prime Minister Shehbaz Sharif and Field Marshal Asim Munir, of Pakistan, and wherein they requested that I hold off the destructive force being sent tonight to Iran, and subject to the Islamic Republic of Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz, I agree to suspend the bombing and attack of Iran for a period of two weeks. This will be a double sided CEASEFIRE! The reason for doing so is that we have already met and exceeded all Military objectives, and are very far along with a definitive Agreement concerning Longterm PEACE with Iran, and PEACE in the Middle East. We received a 10 point proposal from Iran, and believe it is a workable basis on which to negotiate. Almost all of the various points of past contention have been agreed to between the United States and Iran, but a two week period will allow the Agreement to be finalized and consummated. On behalf of the United States of America, as President, and also representing the Countries of the Middle East, it is an Honor to have this Longterm problem close to resolution. Thank you for your attention to this matter! President DONALD J. TRUMP
Trump Post in Truth Social
Market's reaction to Trump's post.
Risk appetite improved sharply, with US equities rising sharply, with the S&P 500 rising over 1.50%, the Nasdaq 100 up more than 1.70%, and Gold rallying over 1.50%, up at around $4,770.
WTI tanks more than 7.50% down from around $108 to $101 per barrel, while the US Dollar Index (DXY), extends its losses down by 0.47% at 99.51 at the time of writing.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
TD Securities’ Global Strategy Team expects the Reserve Bank of New Zealand to leave the Official Cash Rate unchanged, in line with market consensus. The analysts think RBNZ communication will stress patience in responding to supply shocks while the economy runs below capacity. They see current market pricing of more than 75 bps of hikes in 2026 as excessive and will scrutinize Minutes for any hint of earlier tightening.
RBNZ expected to push back on hikes
"We and the market do not expect any change in the cash rate at this meeting."
"Like the Governor's speech last week, the Bank's communication is likely to reaffirm the Bank's reluctance to respond impulsively to the supply shock, especially when the economy is operating below capacity."
"This should challenge the market's pricing of more than 75bps of hikes this year."
"We will scan the Minutes for any signs the RBNZ may consider shifting its stance in favor of bringing forward hikes earlier."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- The Reserve Bank of New Zealand is set to hold the key interest rate at 2.25% for a second straight meeting on Wednesday.
- The RBNZ’s Monetary Policy Review and Governor Breman’s words will be closely scrutinized for policy guidance.
- The New Zealand Dollar is expected to rock in reaction to the RBNZ policy announcements.
The Reserve Bank of New Zealand (RBNZ) is set to extend the pause on its current interest rate-cutting cycle for the second consecutive meeting on Wednesday, leaving the Official Cash Rate (OCR) unadjusted at 2.25%, as the Iran war adds uncertainty to the economic and inflation outlook.
The decision is widely expected and will be announced at 02:00 GMT, accompanied by the Monetary Policy Review (MPR) and the Minutes of the meeting. RBNZ Governor Dr. Anna Breman will hold the post-monetary policy meeting press conference at 03:00 GMT.
The New Zealand Dollar (NZD) could experience intense volatility on either a probable hawkish pivot from the RBNZ or its wait-and-see stance.
What to expect from the RBNZ interest rate decision?
With a rate on-hold decision fully baked in, markets will dissect the RBNZ MPR and Governor Breman’s commentary for any hints on a likely rate hike this year in the wake of the energy shock-driven higher inflation projections.
During the press conference, Breman is expected to stick to the script delivered in her recent speech on March 23.
Back then, Breman said that the Bank is “looking for second-round effects” and “if inflation expectations shift, (it) will act. “
“[We] do not want to react too soon to inflationary pressures,” she added, safeguarding against premature tightening of financial conditions.
New Zealand’s annual inflation rate stood at 3.1% in the quarter ending December 2025, slightly above the RBNZ’s target range of 1% to 3%.
The Minutes of the meeting will also hold some relevance as these could provide insights about a probable debate among policymakers over the likelihood of second-round persistent inflation, potentially offering policy guidance.
“Like the Governor's speech last week, the Bank's communication is likely to reaffirm the Bank's reluctance to respond impulsively to the supply shock, especially when the economy is operating below capacity, Analysts at TD Securities (TDS) said. “This should challenge the market's pricing of more than 75bps of hikes this year.”
How will the RBNZ interest rate decision impact the New Zealand Dollar?
The NZD/USD pair hovers near the five-month lows of 0.5681 in the lead-up to the RBNZ showdown. Will the RBNZ’s hawkish pivot rescue the Kiwi bulls?
If the RBNZ surprises with hints on a potential shift toward interest-rate hikes later this year, the NZD could embark upon a sustained recovery against the US Dollar (USD).
On the contrary, if the central bank dismisses concerns over the near-term inflation shock and sticks to a wait-and-see stance, the Kiwi Dollar could resume its bearish trend.
Dhwani Mehta, Asian Session Lead Analyst at FXStreet, offers a brief technical outlook for NZD/USD and explains:
“The Kiwi remains vulnerable, despite the dead cat bounce. The 14-day Relative Strength Index (RSI) holds well below the midline, while a Bear Cross is playing out. The 21-day Simple Moving Average (SMA) closed below the 100-day SMA on April 1, confirming the bearish bias.”
“The immediate resistance is seen at the 0.5750 psychological level on the road to recovery. The next topside hurdles align at the 0.5800 round figure and the 100-day SMA at 0.5840. On the flip side, strong support is seen at the 0.5600 threshold, below which the November 2025 low of 0.5580 will be at risk. The line in the sand for NZD bulls is at the 0.5550 mark,” Dhwani adds.
Central banks FAQs
Central Banks have a key mandate which is making sure that there is price stability in a country or region. Economies are constantly facing inflation or deflation when prices for certain goods and services are fluctuating. Constant rising prices for the same goods means inflation, constant lowered prices for the same goods means deflation. It is the task of the central bank to keep the demand in line by tweaking its policy rate. For the biggest central banks like the US Federal Reserve (Fed), the European Central Bank (ECB) or the Bank of England (BoE), the mandate is to keep inflation close to 2%.
A central bank has one important tool at its disposal to get inflation higher or lower, and that is by tweaking its benchmark policy rate, commonly known as interest rate. On pre-communicated moments, the central bank will issue a statement with its policy rate and provide additional reasoning on why it is either remaining or changing (cutting or hiking) it. Local banks will adjust their savings and lending rates accordingly, which in turn will make it either harder or easier for people to earn on their savings or for companies to take out loans and make investments in their businesses. When the central bank hikes interest rates substantially, this is called monetary tightening. When it is cutting its benchmark rate, it is called monetary easing.
A central bank is often politically independent. Members of the central bank policy board are passing through a series of panels and hearings before being appointed to a policy board seat. Each member in that board often has a certain conviction on how the central bank should control inflation and the subsequent monetary policy. Members that want a very loose monetary policy, with low rates and cheap lending, to boost the economy substantially while being content to see inflation slightly above 2%, are called ‘doves’. Members that rather want to see higher rates to reward savings and want to keep a lit on inflation at all time are called ‘hawks’ and will not rest until inflation is at or just below 2%.
Normally, there is a chairman or president who leads each meeting, needs to create a consensus between the hawks or doves and has his or her final say when it would come down to a vote split to avoid a 50-50 tie on whether the current policy should be adjusted. The chairman will deliver speeches which often can be followed live, where the current monetary stance and outlook is being communicated. A central bank will try to push forward its monetary policy without triggering violent swings in rates, equities, or its currency. All members of the central bank will channel their stance toward the markets in advance of a policy meeting event. A few days before a policy meeting takes place until the new policy has been communicated, members are forbidden to talk publicly. This is called the blackout period.
- Focus shifts to RBNZ guidance, as the rate hold is already priced in.
- Inflation near 3.1% seen as partly temporary, with policymakers likely to look through energy-driven pressures.
- Hawkish signals may support the NZD, while a cautious stance keeps downside risks in play.
The NZD/USD pair is trading near the 0.5720 region on Wednesday, holding a neutral tone as the US Dollar (USD) remains supported by safe-haven demand while traders brace for the Reserve Bank of New Zealand (RBNZ) monetary policy decision.
Geopolitical tensions continue to dominate sentiment after United States (US) President Donald Trump reinforced a hardline stance on Iran, setting the deadline to a few hours from now, while Tehran reportedly cut diplomatic communication channels with the United States. The escalation around the Strait of Hormuz keeps markets on edge, supporting the USD through risk aversion and elevated energy prices.
As a result, investors will closely assess whether the RBNZ leans toward a more cautious stance or keeps the door open for further tightening. A more hawkish tone could provide limited support to the New Zealand Dollar (NZD), while a neutral or patient approach may leave the currency exposed to ongoing downside pressures amid a stronger USD.
Technical analysis:
On the 4-hour chart, NZD/USD trades at 0.5735. The near-term bias is mildly bullish as price pushes back above the 20-period Moving Average (0.5710) while remaining well below the declining 100-period Moving Average (0.5780), which still caps the broader trend. The Relative Strength Index at 56 rises above the midline, indicating recovering upside momentum after a period of subdued trading around 0.57.
Immediate resistance stands at 0.5736, where a horizontal barrier converges with the recent breakout area, followed by the 100-period Moving Average near 0.5780 and the 0.5907 level. On the downside, initial support aligns at 0.5724, with 0.5704 and 0.5702 reinforcing a tight demand zone that has contained recent pullbacks; a break below this band would expose the broader downtrend, while holding above it keeps the short-term recovery scope toward the upper resistances.
(The technical analysis of this story was written with the help of an AI tool.)
MUFG’s Senior Currency Analyst Michael Wan highlights that escalating tensions between the US and Iran, including threats over the Strait of Hormuz (SoH), keep the path to peace narrow and uncertain. He remains cautious on Asian currencies and regional risk assets as Oil supply risks persist, even as some marginal improvements in tanker flows and potential Iraqi exports through the Strait of Hormuz emerge.
Asia FX weighed by Iran conflict risks
"Overall, our continued assessment is that the path towards peace is narrow and unlikely, given the wide gap in expectations among the different parties in this war."
"As such we remain cautious on the path for Asian currencies and risk assets moving forward, but note at least two important developments in oil markets and potentially positive ones notwithstanding continued uncertainty around how the Iran/Middle East conflict will develop: Overall, our takeaway is that it is an improvement at the margin in terms of flows from SoH, and we should watch carefully for how these develop."
"For Asia however, even if the SoH were to reopen completely today, it will take some time for actual supply to come onstream and flow through, with some suggesting at least 3-6 months timeline, with petrochemicals the worst impacted."
"While tactically speaking the war could eventually end from 3 key constraints – Munitions, Markets, and the Mid-terms, how we get there will be important including what the pain threshold is for oil prices to rise further from here."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- USD/JPY briefly breached 160.00 for the first time since July 2024, reviving intervention speculation from Tokyo.
- Japan's household spending dropped 1.8% YoY in February, far worse than the 0.7% decline expected by economists.
Trump's 8 pm ET deadline for Iran to reopen the Strait of Hormuz looms as ceasefire talks stall and oil tops $100.
USD/JPY traded in a choppy session on Tuesday, briefly touching around 160.00 before pulling back sharply to settle near 159.60, roughly flat on the day. The pair reached its highest level since July 2024, a threshold that previously triggered direct intervention from Japan's Ministry of Finance. The late-session decline came as headlines around ceasefire discussions picked up, though the pair held above its key moving averages.
On the Japanese Yen side, February household spending fell 1.8% YoY, significantly worse than the 0.7% decline consensus and the 1.0% drop recorded previously, suggesting consumer demand remains fragile. Labor cash earnings rose 2.7% YoY in February, matching expectations but slowing from 3.0% in January. The preliminary Leading Economic Index for February edged up to 112.4, slightly above consensus.
Despite the weak spending data, markets continue to price in roughly a 70% probability of a Bank of Japan (BoJ) rate hike later this month, with Governor Ueda's recent hawkish signals keeping expectations firm. Finance Minister Katayama flagged rising speculative activity in currency markets on Friday, and Prime Minister Takaichi said she would pursue direct talks with both Iran's leadership and President Trump. Thursday's Japanese Producer Price Index (PPI) data could further inform the BoJ's inflation calculus ahead of the April 28 meeting.
On the US Dollar side, the focus sits squarely on Wednesday's events. President Trump has set an 8 pm ET deadline for Iran to agree to a ceasefire and reopen the Strait of Hormuz, with Pakistan's Prime Minister requesting a two-week extension. Iran has rejected temporary ceasefire proposals and is pushing for a permanent end to the war.
The US struck targets on Iran's Kharg Island overnight, though oil infrastructure was reportedly spared. The FOMC Minutes are due Wednesday evening, alongside speeches from Fed officials Daly and Waller, which may offer further clarity on the rate path after the Fed held at 3.50% to 3.75% in March.
USD/JPY 15-minute chart
Technical Analysis
In the 15-minute chart, USD/JPY trades at 159.57. The near-term bias is mildly bearish as prices slip below the day’s opening area and edge closer to the 200-period exponential moving average, which is flattening around 159.70 and losing upside influence. The pair has been making lower intraday highs, while Stochastic RSI remains suppressed in the lower quartile of its range, signaling weak upside momentum and favoring continued pressure on immediate supports rather than a sustained rebound.
Initial support is located near 159.50, just beneath current prices, where a decisive break would expose the 159.30 region as the next intraday floor. Below that, focus would shift toward 159.00 as a deeper corrective objective. On the upside, the 200-period EMA around 159.70 now acts as first resistance, with a recovery through this cap needed to ease the bearish tone and open the way toward 159.90. A sustained move above 159.90 would neutralize the short-term downside bias and point to a retest of the 160.20 zone.
(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.
- Australian S&P Global Composite PMI slipped to 46.6 in March, signaling a deepening contraction in private sector activity.
- Pakistan proposed a two-week ceasefire ahead of Trump's 8 pm ET deadline for Iran to reopen the Strait of Hormuz.
AUD/USD rose around 0.4% on Tuesday, recovering from early session lows near 0.6900 to trade close to 0.6950. The pair pushed briefly toward the 0.6980 area during the session, its highest level in over a week, as ceasefire optimism fueled a broad improvement in risk sentiment. The move erased the prior session's modest decline and pushed price back above a key moving average on the daily chart.
On the Australian Dollar side, the S&P Global Composite Purchasing Managers Index (PMI) for March fell to 46.6 from 47, while the Services PMI slipped to 46.3 from 46.6, pointing to a further contraction in private sector output. Separately, the TD-MI Inflation Gauge jumped 1.3% MoM in March after a 0.2% decline in February, with the annual rate rising to 4.3% from 3.6%. The elevated inflation reading reinforces expectations that the Reserve Bank of Australia (RBA) may need to hike again at the May meeting, with markets now pricing in a potential move toward 4.35% or higher. ANZ Job Advertisements fell 3.1% in March, a soft signal for the labor market that may temper hawkish expectations slightly.
On the US Dollar side, February Durable Goods Orders fell 1.4%, missing the consensus forecast of a 0.5% decline, though the ex-transportation reading came in stronger at 0.8%. The ADP Employment Change four-week average rose to 26K from 10K. Federal Reserve (Fed) speakers were mixed on Tuesday, with Governor Williams delivering a neutral score and Governor Goolsbee leaning hawkish. Markets remain focused on Wednesday's 8 pm ET deadline set by President Trump for Iran to agree to a deal and reopen the Strait of Hormuz. Pakistan's Prime Minister has proposed a two-week ceasefire window, and a response from the White House is expected.
An agreement, or even a credible extension of the deadline, could further weigh on crude oil prices and ease inflationary pressures globally, benefiting risk-sensitive currencies like the Australian Dollar. The Federal Open Market Committee (FOMC) Minutes are also due Wednesday, alongside speeches from Fed officials Daly and Waller.
AUD/USD 15-minute chart
Technical Analysis
In the 15-minute chart, AUD/USD trades at 0.6976. The near-term bias is mildly bullish as price holds above the rising 200-period exponential moving average near 0.6927, confirming an intraday uptrend structure after a steady sequence of higher closes. Stochastic RSI remains anchored in elevated territory, signalling persistent upside momentum rather than a completed overbought reversal, which supports the view that dips are likely to attract buyers while the pair remains above its intraday trend base.
Initial support emerges at 0.6955, guarding a deeper pullback toward 0.6935 and the 0.6927 area where the 200-period EMA reinforces a stronger support zone. On the topside, immediate resistance is seen at 0.6980, with a break exposing the 0.7000 psychological barrier as the next upside objective. As long as price action holds above 0.6935, the path of least resistance favors continuation toward 0.7000 rather than a sustained reversal lower.
(The technical analysis of this story was written with the help of an AI tool.)
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
Pakistan requested on Tuesday a two-week extension of the deadline set by US President Donald Trump for Iran to reach a deal or reopen the Strait of Hormuz. According to a senior Iranian official, Tehran is “positively reviewing Pakistan's request for a two-week ceasefire.” At the same time, the White House is aware of Pakistan's proposal, suggesting a response will follow.
Pakistan’s Prime Minister Shehbaz Sharif posted on X, “To allow diplomacy to run its course, I earnestly request President Trump to extend the deadline for two weeks. Pakistan, in all sincerity, requests the Iranian brothers to open Strait of Hormuz for a corresponding period of two weeks as a goodwill gesture.”
Trump’s deadline on Iran to reopen the Strait of Hormuz will end on Tuesday at 8:00 PM Eastern Time (00:00 GMT on Wednesday), as Washington presses Tehran to end the blockade of Gulf Oil.
The Pakistan Prime Minister added that the ceasefire is needed “to allow diplomacy to achieve conclusive termination of war.”
Reaction on the headline
- The US Dollar Index (DXY), which tracks the performance of the buck's value against a basket of six currencies, is tumbling over 0.34% at 99.65, while US equities pared some of their earlier losses and turned green.
- Gold price (XAU/USD) soared over 1%, back above the $4,700 threshold, sponsored by the fall in Oil prices, mainly WTI.
- WTI turned negative on the day, after reaching a daily high past $117.50 a barrel, slumps over 2%, down at $110.33.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
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.
