Forex News
Comments from US Treasury Secretary Scott Bessent on Wednesday offered a broad snapshot of the US administration’s thinking on the labour market, trade policy and energy security, as markets continue to navigate heightened geopolitical tensions and renewed volatility in oil prices.
Key takeaways
On the labour market, Scott Bessent struck an optimistic tone, saying he remains bullish on job creation this year. He emphasised that sustainable employment gains must come from the private sector, adding that the recent strength in temporary employment is often an early signal of broader hiring momentum.
On trade policy, Bessent indicated that tariffs could rise to around 15% sometime this week, though he suggested the move would likely be temporary. Rates are expected to revert to previous levels in roughly five months, while the administration conducts additional Section 301 and Section 232 reviews.
Energy markets were another focus. Bessent argued that crude markets remain well supplied, noting that significant volumes of oil remain outside the Gulf region. He added that the United States is coordinating with other countries and could take steps to ensure safe tanker passage if needed.
He also highlighted China’s vulnerability on the energy front, noting that the country’s reliance on imported crude leaves it exposed to potential disruptions in global supply chains.
US-China Trade War FAQs
Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.
An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.
The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.
BNY’s Head of Markets Macro Strategy Bob Savage highlights that Eurozone composite PMI has risen to a three‑month high, extending private sector expansion, with Germany leading and France still in mild contraction. In the report, the ECB’s outlook is described as having swung from a marginal chance of a cut to a 50% chance of a hike in just two sessions, reshaping rate expectations and supporting the Euro.
Stronger data and hawkish repricing
"The Eurozone’s February composite PMI rose to 51.9 from 51.3 in January, marking a three-month high and extending the private sector expansion to 14 months, as stronger domestic demand lifted both manufacturing and services output."
"The services PMI increased to 51.9 from 51.6, a two-month high, with sales growth driven by domestic orders while export business continued to contract marginally."
"Among major economies, Germany led growth, Italy expanded at a faster pace, Spain slowed and France remained in contraction."
"The ECB’s outlook has now shifted from a marginal chance of a cut this year to a 50% chance of a hike in the space of two trading sessions; all associated EMEA central banks will also need to look at transmission mechanisms as well and keep potential policy gaps to a minimum."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- The US ADP Employment Change report is expected to show the private sector added 50K new positions in February.
- The Middle East war is likely to maintain the flows into safe-haven assets.
- The US Dollar Index added roughly 1.7% and nears the critical 100 threshold.
The Automatic Data Processing (ADP) Research Institute will release its monthly report on private-sector job creation for February on Wednesday. The so-called ADP Employment Change report is expected to show that the United States (US) private sector added 50K new positions in the month, following the 22K gained in January.
As usual, the ADP report will precede the US Bureau of Labor Statistics Nonfarm Payrolls (NFP) report scheduled for Friday. The latter offers a comprehensive view of the employment situation in the country, as it includes private and government jobs alongside the monthly Unemployment Rate, a critical figure for the Federal Reserve (Fed), which bases its decisions on both employment and inflation levels.
ADP Jobs Report to be overshadowed by geopolitical turmoil
There is no clear near-term correlation between the ADP Employment Change report and the Nonfarm Payrolls report, meaning a strong ADP does not guarantee a similarly upbeat NFP. Nevertheless, the figures tend to impact the US Dollar (USD), with better-than-anticipated figures generally boosting demand for the Greenback.
Ahead of the release, the USD is strengthening against all major rivals, but not because of the US economic performance, but because fears took over financial markets after the US and Iran launched a massive air strike on Iran last Saturday. Tehran retaliated, hitting US bases in different Gulf countries such as Dubai, Qatar, and Saudi Arabia. As of today, the conflict continues to spread across the entire Persian Gulf.
The latest on the matter indicates that shipments through the Strait of Hormuz have halted, further fueling price disruptions: Oil and gas prices are skyrocketing around the globe, while demand for safety is pushing the US Dollar Index (DXY) up, roughly 1.7% higher since the week started.
In such a scenario, the US employment situation will likely be set aside as investors will be focused on war developments when looking for market direction. Nevertheless, every piece of data will be considered in the mid-term leading up to the next Fed monetary policy meeting scheduled for March 17-18. At the moment, the odds of an interest rate cut are quite low, particularly given stubborn inflationary pressures. The latest Personal Consumption Expenditures (PCE) Price Index, the Fed’s favorite inflation gauge, came in at 2.9% YoY in December, while the core annual PCE hit 3%.
The February ADP report is expected to confirm that the labor market left behind the slow momentum from mid-2025 and is now much more stable. A stronger-than-anticipated report is likely to reinforce the positive view of the labor market, yet have no real impact on upcoming Fed monetary policy decisions. A weak report, on the other hand, can temporarily interrupt the USD rally, but as long as the war continues, demand for safety is likely to prevail
When will the ADP Report be released, and how could it affect the USD?
The US ADP Employment Change report will be out on Wednesday at 13:15 GMT, and it is expected to show that the private sector added 50K new jobs in February. As previously mentioned, the DXY is sharply up ahead of the announcement amid the Middle East crisis, boosting demand for safety.
Valeria Bednarik, Chief Analyst at FXStreet, notes: “Demand for the USD pushed the DXY to its highest since mid-January, when the index topped at 99.50. The bullish trend is clear on the daily chart, as the DXY has run beyond its 100-day and 200-day Simple Moving Averages (SMAs), both directionless and converging at the 98.40-98.60 price zone. The same chart shows technical indicators head firmly north, well into positive territory, without signs of upward exhaustion.”
Bednarik adds: “Beyond the aforementioned yearly high at 99.50, the index is likely to extend its run towards the 100.00 mark. Additional gains seem unlikely with just the ADP report, but steady gains above 100.00 should lead to a long-lasting USD bullish trend. Support comes at the 90.00 level, with approaches to the latest likely to attract buyers. An unlikely break below it should expose the mentioned 98.50 area, where the next line of buyers will appear.”
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.
Economic Indicator
ADP Employment Change
The ADP Employment Change is a gauge of employment in the private sector released by the largest payroll processor in the US, Automatic Data Processing Inc. It measures the change in the number of people privately employed in the US. Generally speaking, a rise in the indicator has positive implications for consumer spending and is stimulative of economic growth. So a high reading is traditionally seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Read more.Next release: Wed Mar 04, 2026 13:15
Frequency: Monthly
Consensus: 50K
Previous: 22K
Source: ADP Research Institute
Traders often consider employment figures from ADP, America’s largest payrolls provider, report as the harbinger of the Bureau of Labor Statistics release on Nonfarm Payrolls (usually published two days later), because of the correlation between the two. The overlaying of both series is quite high, but on individual months, the discrepancy can be substantial. Another reason FX traders follow this report is the same as with the NFP – a persistent vigorous growth in employment figures increases inflationary pressures, and with it, the likelihood that the Fed will raise interest rates. Actual figures beating consensus tend to be USD bullish.
- Gold rebounds on Wednesday after a 4.4% drop the previous day as the US Dollar pauses following a two-day rally.
- US-Iran conflict supports safe-haven demand, limiting downside in Gold.
- Technically, XAU/USD holds above key support near $5,100 with resistance emerging around $5,200.
Gold (XAU/USD) edges higher on Wednesday, recovering part of the previous day’s sharp decline as the US Dollar (USD) takes a breather after two days of solid gains. Meanwhile, ongoing geopolitical tensions surrounding the US-Iran war keep safe-haven demand in play, helping cushion the downside.
At the time of writing, XAU/USD trades around $5,180, up about 1.65% on the day.
Gold steadies as USD rally pauses amid Middle East tensions
Gold tumbled 4.4% on Tuesday, while Silver (XAG/USD) slid about 8.4%, as a stronger USD weighed on metals. The decline accelerated after prices slipped below key technical support levels, triggering stop-loss orders and broad liquidation. The sell-off, however, proved short-lived as rising global and economic uncertainty kept investors’ risk appetite subdued.
The Middle East conflict enters its fifth day, with the US and Israel stepping up air and missile strikes across Iran. Tehran has responded with missile and drone attacks on US bases and allied facilities in the Gulf.
As the war escalates, disruptions to Oil flows through the Strait of Hormuz are pushing energy prices higher, raising concerns about the inflationary impact on the global economy.
US President Donald Trump tried to calm markets, saying the US “will begin escorting tankers through the Strait of Hormuz as soon as possible” if necessary. In a post on Truth Social on Tuesday, he added that Washington would provide political risk insurance for ships traveling through the Gulf to “ensure the FREE FLOW of ENERGY to the WORLD.”
Fed rate-cut bets slip below 50 basis points by year-end
Growing inflation concerns are also prompting traders to reassess the Federal Reserve’s (Fed) monetary policy outlook. Markets now price in at least 50 basis points (bps) of interest rate cuts by December, according to the CME FedWatch tool, which could act as a headwind for non-yielding assets such as Gold.
Looking ahead, attention turns to key US economic data due this week. The ADP Employment Change report and ISM Services Purchasing Managers' Index (PMI) are scheduled for release on Wednesday, followed by the Nonfarm Payrolls (NFP) report on Friday.
Technical analysis: XAU/USD stabilizes near $5,100 after pullback from recent highs
XAU/USD’s near-term outlook appears neutral to mildly bearish after prices retreated from the upper Bollinger Band on the 4-hour chart and are now oscillating just below the mid-band. However, the downside remains limited as prices found support near the lower Bollinger Band around $5,057.
The RSI (14) is stabilizing after approaching oversold territory and is now moving higher at 45, suggesting that selling momentum may be easing.
The Moving Average Convergence Divergence (MACD) line flattens below the signal line, with the negative histogram contracting, which suggests waning bearish pressure.
On the upside, immediate resistance is seen near $5,200, ahead of the mid-Bollinger Band around $5,259, followed by the upper Bollinger Band near $5,461.
On the downside, initial support lies in the $5,100-$5,000 zone. A decisive break below this range could expose the next support levels near $4,850 and $4,650.
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.
- Iranian intelligence operatives reportedly signalled openness to discussions with the US through an intermediary channel.
- Officials in Washington remain skeptical about the possibility of near-term negotiations.
- The report comes days after joint United States and Israeli strikes against Iranian targets.
Iran may have quietly explored the possibility of opening communication channels with the United States (US) despite the ongoing conflict, according to a report from the New York Times cited by Reuters on Wednesday. The report states that operatives from Iran’s Ministry of Intelligence indicated to the United States Central Intelligence Agency (CIA) that Tehran could be open to discussions aimed at ending the war.
According to officials briefed on the matter, the message was delivered indirectly through the intelligence service of an unnamed country. Middle Eastern officials and representatives from a Western nation reportedly confirmed that the signal of openness was conveyed through this backchannel, although the details of the proposal remain unclear.
Despite the reported outreach, officials in Washington remain doubtful that either side is currently prepared to pursue serious negotiations. According to the New York Times, there is skepticism within the US administration regarding whether Tehran or the administration of US President Donald Trump is ready to consider a realistic diplomatic exit from the conflict in the near term.
Public statements from both sides appear to reinforce that skepticism. Iran’s ambassador to the United Nations (UN) in Geneva said on Tuesday that negotiations with the United States were not currently being considered, following the recent military strikes conducted by the US and Israel against Iranian targets.
President Donald Trump also said on Tuesday that Iran had expressed interest in talks. Still, he argued that the opportunity had passed, indicating that US military operations against Iran would continue.
These conflicting signals highlight the uncertainty surrounding the possibility of diplomatic engagement as the conflict continues, with unofficial intelligence channels potentially remaining one of the few avenues for indirect communication between the two countries.
Rabobank's Senior FX Strategist Jane Foley discusses USD/JPY backing off highs near 158 as profit taking and hawkish comments from BoJ Governor Ueda support the Japanese Yen. The bank highlights Japan’s vulnerability to higher energy prices but stresses the Yen’s safe haven role. Foley forecasts USD/JPY moving back to 145 on a one-year horizon, assuming further BoJ rate hikes.
Yen benefits from risk repricing and policy
"In early European trading, profit taking on long USD positions allowed USD/JPY to back off from yesterday’s highs in the 157.97 area."
"Looking ahead, a more hawkish tone from the BoJ would be supportive for the JPY. If other central banks are also forced to adopt less accommodative tones, this may increase volatility and undermine the environment for carry trades which is also likely to be JPY supportive."
"This morning BoJ Governor Ueda warned that the conflict in the Middle East could have a significant impact on Japan’s economy through energy prices and potentially from the impact on financial markets. While the market sees little chance of a BoJ rate hike at the March policy meeting, expectations of a move in April have been strengthening."
"If FX volatility rises, however, we would expect the JPY to perform better. Our forecast of a move back to USD/JPY145 on a 1-year view assumes the BoJ will continue to hike rates this year"
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
TD Securities’ Global Strategy Team notes that UK Chancellor Reeves delivered a cautious Spring Statement with no major new policies. Updated OBR projections show slightly slower UK growth in 2026 but stronger growth thereafter, alongside lower inflation forecasts. The team highlights that reduced financing needs and remaining fiscal space could be used if geopolitical risks intensify or policy is loosened later.
Spring Statement and OBR projections
"As largely expected, Chancellor Reeves played it safe in her fiscal forecast update, with no material new policies announced. The OBR projections showed more headroom by 2029-30, at £23.6bn (vs £21.7bn prior)."
"Macro projections were updated as well, showing slightly slower growth in 2026, but stronger growth thereafter (and alongside a downward revision to population estimates, means stronger per capita GDP growth as well)."
"The OBR's inflation forecast was lowered for 2026 to 2.3%, and remains unchanged at 2.0% in 2027. These numbers suggest that there is still fiscal space available should current geopolitical developments require it or should the government decide to slightly loosen policy in its Autumn budget. "
"The UK DMO’s Net Financing Requirement for FY26/27 was reduced to £257.1bn as compared to £314.7bn in FY 25/26."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Brown Brothers Harriman’s Elias Haddad notes the Dollar has retraced part of its recent surge but still benefits from short-term haven demand linked to Dollar funding needs. Rising cross-currency basis points to higher USD borrowing costs as stress lifts demand for short-term funding. However, BBH warns that prolonged conflict and stagflation risks argue against sustained Dollar strength.
Funding stress underpins short term USD
"USD retraced some of this week’s sharp gains. Still, USD can continue to benefit in the short-term from haven bid driven by dollar funding needs. The cross-currency basis, the extra cost investors pay or receive to get dollars using another currency, has narrowed for the majors implying the cost of borrowing USD has increased."
"However, a protracted conflict that leads to further disruption in energy production and shipping raises the risk the US economy enters stagflation and worsens the already fragile US fiscal backdrop. That argues against sustained USD strength."
"Focus today are on the February ADP jobs (1:15pm London, 8:15am New York) and ISM services index (3:00pm London, 10:00am New York). Consensus expects ADP private payrolls at +50k vs. +22k in January. The ISM services index is projected at 53.5 vs. 53.8 in January."
"Pay attention to the ISM Prices Paid and Employment sub-indexes for signs that the tension between employment and inflation is diminishing or worsening. The Fed Beige Book (7:00pm London, 2:00pm New York) will also offer fresh anecdotal insights on the US labor market and inflation backdrops."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- EUR/JPY remains under pressure around 183.00, down about 0.10% on the day.
- Germany and Eurozone PMI data show improving activity in February.
- War in the Middle East boosts demand for the JPY as a safe-haven asset.
EUR/JPY trades around 183.00 on Tuesday at the time of writing, down 0.10% on the day, as the Japanese Yen (JPY) benefits from renewed safe-haven demand amid rising geopolitical tensions in the Middle East.
On the European macroeconomic front, data released earlier in the day pointed to improving economic activity. The Germany HCOB Services Purchasing Managers Index (PMI) rose to 53.5 in February, slightly above market expectations of 53.4 and up from 52.4 in January. Meanwhile, the German Composite PMI edged higher to 53.2 from the previous 53.1.
Across the Eurozone, the Composite PMI climbed to 51.9 in February from 51.3 in January, marking a three-month high. The Services PMI also improved to 51.9 from 51.6 previously, indicating a faster pace of output growth compared with the start of the year.
Inflation data, released on Tuesday, also delivered mixed signals for the monetary policy outlook. According to a flash estimate from Eurostat, the Eurozone Harmonized Index of Consumer Prices (HICP) rose 1.9% YoY in February, compared with 1.7% in January. Core inflation, which excludes volatile components such as food, energy, alcohol and tobacco, increased to 2.4% YoY, above both the market consensus and the previous reading of 2.2%.
Despite these relatively supportive economic indicators for the Euro (EUR), the Japanese Yen is currently benefiting from increased risk aversion. Tensions between the United States (US), Israel and Iran have intensified after US President Donald Trump stated that most of Iran’s military installations had been “knocked out” and that new strikes targeted Iranian leadership, according to CNBC. The escalation is supporting demand for safe-haven assets, including the JPY.
The Japanese currency is also receiving support from comments by policymakers. Bank of Japan (BoJ) Deputy Governor Ryozo Himino said on Monday that the current policy stance remains “somewhat accommodative”, but added that the central bank should gradually raise interest rates if its economic and inflation projections are met.
However, the upside potential for the Japanese Yen may remain limited. According to Reuters, sources familiar with the BoJ’s thinking indicated that recent market volatility triggered by the Middle East war has increased the likelihood that the BoJ could delay a potential rate hike at its March meeting. This caution comes alongside reservations expressed by Japanese Prime Minister Sanae Takaichi regarding further monetary tightening, which could limit Japanese Yen gains and prevent a deeper decline in EUR/JPY.
Analysts at MUFG also noted that the JPY currently stands between two opposing forces: support from rising risk aversion and uncertainty surrounding Japan’s monetary policy outlook. According to the analysts, stronger safe-haven flows could support further JPY appreciation, while the persistence of the Middle East war could reduce the likelihood of a near-term rate hike by the Bank of Japan.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.15% | -0.13% | -0.24% | 0.00% | -0.04% | -0.35% | -0.01% | |
| EUR | 0.15% | 0.02% | -0.05% | 0.15% | 0.11% | -0.20% | 0.14% | |
| GBP | 0.13% | -0.02% | -0.13% | 0.13% | 0.09% | -0.21% | 0.12% | |
| JPY | 0.24% | 0.05% | 0.13% | 0.24% | 0.20% | -0.11% | 0.23% | |
| CAD | -0.00% | -0.15% | -0.13% | -0.24% | -0.04% | -0.35% | -0.01% | |
| AUD | 0.04% | -0.11% | -0.09% | -0.20% | 0.04% | -0.31% | 0.03% | |
| NZD | 0.35% | 0.20% | 0.21% | 0.11% | 0.35% | 0.31% | 0.33% | |
| CHF | 0.00% | -0.14% | -0.12% | -0.23% | 0.00% | -0.03% | -0.33% |
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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
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