Forex News
- EUR/JPY softens to around 179.70 in Tuesday’s early European session.
- A positive view of the cross prevails above the 100-day EMA, with the bullish RSI indicator.
- The crucial upside barrier is seen at 180.00; the first support level to watch is 178.56.
The EUR/JPY cross declines to near 179.70 during the early European session on Tuesday. The cross retreats after reaching new record highs in the previous session. However, the potential downside for the cross might be limited amid the ongoing weakening of the Japanese Yen (JPY).
Japan’s Prime Minister Sanae Takaichi urged the Bank of Japan (BoJ) to maintain low interest rates, emphasizing that monetary policy should support both robust economic growth and stable price increases.
Technically, the constructive outlook of EUR/JPY remains in play, with the price being well-supported above the key 100-day Exponential Moving Average (EMA) on the daily chart. The upward momentum is reinforced by the 14-day Relative Strength Index, which stands above the midline near 65.95. This suggests that further upside looks favorable in the near term.
The key resistance level for the cross emerges at the 180.00 psychological level. Sustained trading above this level could pick up more momentum and aim for the upper boundary of the Bollinger Band of 180.20. Further north, the next hurdle is seen at 181.00, the round mark.
On the downside, the initial support level for EUR/JPY is located at 178.56, the high of October 31. Any follow-through selling below this level could see a drop to 176.28, the low of November 6. The additional downside filter to watch is 175.80, the lower limit of the Bollinger Band.
EUR/JPY daily chart
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 Dollar falls despite the cautious sentiment surrounding the RBA policy stance.
- RBA Meeting Minutes could keep the cash rate unchanged for longer if incoming data proves stronger than expected.
- The US Dollar edges lower after registering more than 0.25% gains on Monday.
The Australian Dollar (AUD) remains subdued against the US Dollar (USD) on Tuesday after registering losses in the previous session. The AUD/USD pair holds losses after the Reserve Bank of Australia (RBA) published the Minutes of its November monetary policy meeting.
The RBA Meeting Minutes showed that board members signalled a more balanced policy stance, adding that it could keep the cash rate unchanged for longer if incoming data proves stronger than expected.
However, the AUD may regain support as stronger domestic employment data reinforced expectations for a cautious stance from the Reserve Bank of Australia (RBA). As of the latest update on November 14, the ASX 30-Day Interbank Cash Rate Futures for December 2025 traded at 96.41, reflecting a 6% probability of a rate cut to 3.35% from 3.60% at the upcoming RBA Board meeting.
US Dollar moves little despite diminishing Fed rate cut likelihood
- The US Dollar Index (DXY), which measures the value of the US Dollar against six major currencies, is edging lower and trading around 99.50 at the time of writing. Traders brace for a backlog of US data following the government's reopening.
- The CME FedWatch Tool suggests that financial markets are now pricing in a 43% chance that the Fed will cut its benchmark overnight borrowing rate by 25 basis points (bps) at its December meeting, down from 62% probability that markets priced a week ago.
- Federal Reserve Vice Chair Philip Jefferson noted Monday that risks to the labor market now outweigh upside risks to inflation, while stressing that the Fed should proceed “slowly” with any additional rate reductions.
- Fed Governor Christopher Waller said that the US central bank should cut the interest rates when policymakers meet in December. Waller added that he’s grown concerned over the labor market and the sharp slowdown in hiring.
- Kansas City Fed President Jeffrey Schmid said on Friday that monetary policy should “lean against demand growth,” adding that current Fed policy is “modestly restrictive,” which he believes is appropriate.
- National Economic Council Director Kevin Hassett cautioned that some October data may “never materialize,” as several agencies were unable to gather information during the shutdown. Initial private-sector reports suggest a cooling labor market and wavering consumer confidence, with persistent concerns about inflation.
- Automatic Data Processing (ADP) released the US Employment Change on Tuesday, showing an average weekly job loss of 11,250 in the four weeks to October 25. Weaker-than-expected private US labor data increased the likelihood of the Federal Reserve (Fed) policy easing. Challenger, Gray & Christmas announced that US employers slashed 153,074 jobs in October, up from the 55,597 cuts announced in October 2024.
- Reuters reported on Sunday that US Treasury Secretary Scott Bessent said a rare earths agreement between the United States (US) and China will “hopefully” be finalized by Thanksgiving. He added that he is confident China will uphold its commitments following the recent meeting in Korea between the two leaders, President Trump and President Xi Jinping.
- RBA Deputy Governor Andrew Hauser said last week, “Our best estimate is that monetary policy remains restrictive, though the committee continues to debate this.” Hauser added that if the policy is no longer mildly restrictive, it would have significant implications for future decisions.
- The Australian Bureau of Statistics (ABS) released the Unemployment Rate on Thursday, which declined to 4.3% in October from 4.5% in September, against the market expectations of 4.4%. Meanwhile, the Employment Change arrived at 42.2K in the same month from 12.8K (revised from 14.9K) prior, sharply exceeding the market forecast of 20K.
- Australia’s Full-Time Employment rose by 55.3K in October, from a rise of 6.5K in the previous reading (revised from 8.7K). Participation Rate steadied at 67%, while the Part-Time Employment decreased by 13.1K in October, versus an increase of 6.3K prior.
Australian Dollar moves below 0.6500 near lower rectangle boundary
The AUD/USD pair is trading around 0.6490 on Tuesday. The analysis of the daily chart shows the pair consolidating within a rectangular range, reflecting sideways movement. The price moves below the nine-day Exponential Moving Average (EMA), suggesting that momentum is weakening.
On the downside, the primary support lies at the lower boundary of the rectangle around 0.6470, followed by the five-month low of 0.6414, which was recorded on August 21.
The AUD/USD pair may test the primary barrier at the nine-day EMA of 0.6514. A break above this level would improve the short-term price momentum and lead the pair to reach the rectangle’s upper boundary near 0.6630.
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.07% | -0.03% | -0.14% | 0.01% | 0.20% | 0.13% | -0.26% | |
| EUR | 0.07% | 0.04% | -0.04% | 0.08% | 0.27% | 0.19% | -0.19% | |
| GBP | 0.03% | -0.04% | -0.08% | 0.05% | 0.23% | 0.16% | -0.23% | |
| JPY | 0.14% | 0.04% | 0.08% | 0.13% | 0.31% | 0.22% | -0.15% | |
| CAD | -0.01% | -0.08% | -0.05% | -0.13% | 0.19% | 0.11% | -0.28% | |
| AUD | -0.20% | -0.27% | -0.23% | -0.31% | -0.19% | -0.08% | -0.46% | |
| NZD | -0.13% | -0.19% | -0.16% | -0.22% | -0.11% | 0.08% | -0.39% | |
| CHF | 0.26% | 0.19% | 0.23% | 0.15% | 0.28% | 0.46% | 0.39% |
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).
RBA FAQs
The Reserve Bank of Australia (RBA) sets interest rates and manages monetary policy for Australia. Decisions are made by a board of governors at 11 meetings a year and ad hoc emergency meetings as required. The RBA’s primary mandate is to maintain price stability, which means an inflation rate of 2-3%, but also “..to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people.” Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will strengthen the Australian Dollar (AUD) and vice versa. Other RBA tools include quantitative easing and tightening.
While inflation had always traditionally been thought of as a negative factor for currencies since it lowers the value of money in general, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Moderately higher inflation now tends to lead central banks to put up their interest rates, which in turn has the effect of attracting more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in the case of Australia is the Aussie Dollar.
Macroeconomic data gauges the health of an economy and can have an impact on the value of its currency. Investors prefer to invest their capital in economies that are safe and growing rather than precarious and shrinking. Greater capital inflows increase the aggregate demand and value of the domestic currency. Classic indicators, such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can influence AUD. A strong economy may encourage the Reserve Bank of Australia to put up interest rates, also supporting AUD.
Quantitative Easing (QE) is a tool used in extreme situations when lowering interest rates is not enough to restore the flow of credit in the economy. QE is the process by which the Reserve Bank of Australia (RBA) prints Australian Dollars (AUD) for the purpose of buying assets – usually government or corporate bonds – from financial institutions, thereby providing them with much-needed liquidity. QE usually results in a weaker AUD.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the Reserve Bank of Australia (RBA) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the RBA stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It would be positive (or bullish) for the Australian Dollar.
- Silver price declines as Fed rate cut odds decrease following cautious Fedspeak.
- CME FedWatch Tool suggests pricing in a 43% chance of a 25-basis-point Fed rate cut in December.
- Fed Vice Chair Philip Jefferson emphasized that the Fed should move “slowly” on any further rate cuts.
Silver price (XAG/USD) continues its losing streak for the fourth successive session, trading around $49.50 per troy ounce during the Asian hours on Tuesday. The non-interest-bearing Silver struggles amid declining US Federal Reserve (Fed) rate cut bets for December. Traders will closely monitor Thursday’s September jobs report for signals on US economic health, while Wednesday’s release of the Fed’s meeting minutes is expected to offer further rate guidance.
The CME FedWatch Tool suggests that financial markets are now pricing in a 43% chance that the Fed will cut its benchmark overnight borrowing rate by 25 basis points (bps) at its December meeting, down from 62% probability that markets priced a week ago.
Federal Reserve Vice Chair Philip Jefferson noted Monday that risks to the labor market now outweigh upside risks to inflation, while stressing that the Fed should proceed “slowly” with any additional rate reductions. However, Fed Governor Christopher Waller said that the US central bank should cut the interest rates when policymakers meet in December. Waller added that he’s grown concerned over the labor market and the sharp slowdown in hiring.
The downside of the precious metal could be restrained supply concerns, particularly as the prospect of US tariffs looms. The US Department of the Interior last week designated Silver, Copper, and metallurgical Coal as “critical minerals,” citing their strategic economic and national security roles. The classification also clears the path for potential Section 232 probes and related trade measures, mirroring earlier actions taken on Copper.
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
- Gold attracts sellers for the fourth straight day amid reduced December Fed rate cut bets.
- Economic concerns weigh on the USD, though it fails to offer support to the commodity.
- Even the risk-off impulse does little to benefit the safe-haven XAU/USD pair or limit losses.
Gold (XAU/USD) remains under some selling pressure for the fourth consecutive day on Tuesday and drifts back closer to a one-and-a-half-week low, around the $4,000 neighborhood, touched the previous day. Traders have been scaling back their bets for another interest rate cut by the US Federal Reserve (Fed) in December, which, in turn, is seen as a key factor undermining the non-yielding yellow metal. The US Dollar (USD), however, struggles to attract any follow-through buying amid concerns about the weakening economic momentum on the back of the longest-ever US government shutdown. This, along with the prevalent risk-off environment, could offer some support to the safe-haven commodity and help limit further losses.
Traders might also opt to wait for more cues about the Fed's rate-cut path before positioning for the next leg of a directional move for the Gold price. Hence, the market focus will remain glued to the release of FOMC meeting Minutes, due on Wednesday, and the delayed US Nonfarm Payrolls (NFP) report for October on Thursday. Moreover, speeches from influential FOMC members will play a key role in driving the Greenback and providing some meaningful impetus to the XAU/USD pair. In the meantime, a convincing break and acceptance below the $4,000 psychological mark will be seen as a key trigger for bearish traders. This, in turn, will set the stage for an extension of a nearly one-week-old downtrend from the vicinity of mid-$4,200s.
Daily Digest Market Movers: Gold continues to be pressured by less dovish Fed expectations
- The longest-ever US government shutdown led to an absence of official economic data and dampened expectations for another interest rate cut by the Federal Reserve in December. Moreover, several Fed officials recently signaled caution on further policy easing.
- Fed Vice Chair Philip Jefferson said on Monday that upside risks to inflation have declined somewhat and the current policy rate is somewhat restrictive. Jefferson, however, added that the central bank needs to proceed slowly as monetary policy approaches the neutral rate.
- According to the CME Group's FedWatch Tool, the probability for a 25 basis-point Fed rate cut in December has now fallen below 50%. This, in turn, has been a key factor that continues to drive flows away from the non-yielding Gold for the fourth consecutive day on Tuesday.
- Meanwhile, investors remain worried about the impact of the prolonged US government closure on the economy, which fails to assist the US Dollar in building on the previous day's gains. This might hold back the XAU/USD bears from placing aggressive bets and help limit losses.
- The reopening of the US government shifts the market focus back to the release of delayed economic data, including the key Nonfarm Payrolls (NFP) report on Thursday. Apart from this, the FOMC Minutes could offer cues about the rate-cut path and influence the commodity.
- Russia's Defence Ministry said that its forces have occupied strongholds in Orestopol in the Dnipropetrovsk region. Moreover, a Russian attack forced a Romanian border village to evacuate. This keeps geopolitical risks in play and could support the safe-haven precious metal.
Gold could accelerate the fall below $4,000 psychological mark amid a negative technical setup
The XAU/USD pair recently failed to move back above the 200-hour Exponential Moving Average (EMA). The subsequent fall favors bearish traders and suggests that the path of least resistance for the Gold price is to the downside. Some follow-through selling below the $4,000 mark will reaffirm the negative bias and make the commodity vulnerable to accelerate the fall towards the $3,931 intermediate support en route to the $3,900 mark and late October swing low, around the $3,886 region.
On the flip side, any meaningful recovery attempt might now confront an immediate strong barrier near the $4,053-4,055 region. However, a sustained strength beyond could trigger a short-covering rally and lift the Gold price back to the 200-hour EMA, currently pegged just below the $4,100 round figure. Some follow-through buying will suggest that the recent slide witnessed over the past week or so, from the vicinity of mid-$4,200s, has run its course and pave the way for additional gains.
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.
- GBP/USD struggles after UK Chancellor Rachel Reeves scrapped planned income-tax rises.
- The British Pound remains under pressure as softer economic data boost expectations of a December rate cut by the BoE.
- The US Dollar holds steady as markets await a wave of delayed US data after the government reopened.
GBP/USD remains subdued for the third successive session, trading around 1.3150 during the Asian hours on Tuesday. The pair struggles as the Pound Sterling (GBP) comes under strain after the United Kingdom (UK) Chancellor of the Exchequer Rachel Reeves abandoned planned income-tax rises. The decision has raised questions about the UK’s fiscal outlook, despite the Office for Budget Responsibility lowering its budget deficit forecast to £20 billion from £35 billion. Reeves is still anticipated to pursue revenue through threshold changes and salary-sacrifice reforms, favoring a smaller-scale budget over significant tax increases.
Additionally, the British Pound continues to face downside pressure after softer economic data intensified bets on a December rate cut by the Bank of England (BoE). The UK economy delivered only marginal growth in Q3, with GDP declining monthly in September. This week, traders’ attention will be on inflation figures, flash PMIs, and any indications of cooling momentum in the manufacturing and services sectors.
The US Dollar (USD) moves little as traders brace for a backlog of US data following the government's reopening. The Greenback gained support amid declining US Federal Reserve (Fed) rate cut bets for December. The CME FedWatch Tool suggests that financial markets are now pricing in a 43% chance that the Fed will cut its benchmark overnight borrowing rate by 25 basis points (bps) at its December meeting, down from 62% probability that markets priced a week ago.
However, Federal Reserve (Fed) Governor Christopher Waller said on Monday that the Fed should cut the interest rates when policymakers meet in December. Waller added that he’s grown concerned over the labor market and the sharp slowdown in hiring, according to a news report by Bloomberg.
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- US Dollar Index holds steady near 99.55 in Tuesday’s Asian session.
- Fed officials highlighted risks to the US labor market.
- The release of the delayed US Nonfarm Payrolls data for September is due on Thursday.
The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, trades on a flat note around 99.55 during the Asian session on Tuesday. The DXY steadies as traders brace for the long-awaited return of US economic data. The US September Nonfarm Payrolls (NFP) report will be the highlight later on Thursday.
Several Fed officials emphasized risks to the labor market. Fed Governor Christopher Waller said that the US central bank should cut the interest rates when policymakers meet in December. Waller added that he’s grown concerned over the labor market and the sharp slowdown in hiring.
Meanwhile, Fed Vice Chair Philip Jefferson noted on Monday that the US labor market is in a "sluggish" state with firms hesitant to hire amid broad shifts in economic policy and interest in how artificial intelligence might be a substitute for new hiring.
Fed funds futures are pricing an implied 43% chance of a 25 basis points (bps) cut at the US central bank's meeting on December 10, down from a 62% odds a week ago and expectations that a cut was a near certainty a month ago, according to the CME FedWatch tool.
Traders brace for the insight on the Federal Reserve’s (Fed) monetary policy after the end of the longest government shutdown in US history, which delayed the publication of official economic statistics. Later on Tuesday, traders will take more cues from the Fedspeak. Fed’s Michael Barr and Thomas Barkin are set to speak. Any hawkish remarks from policymakers could lift the DXY in the near term.
All eyes will be on the US NFP data on Thursday. Economists forecast around 50,000 jobs added in September, following August's 22,000 increase. The Unemployment Rate is expected to stay at 4.3% during the same period. If the report comes in weaker than expected, this could exert some selling pressure on the US dollar across the board.
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.
- The Japanese Yen continues to be undermined by fiscal concerns and BoJ uncertainty.
- Reduced Fed rate cut bets act as a tailwind for the USD and support the USD/JPY pair.
- Intervention fears and the risk-off mood help limit deeper losses for the safe-haven JPY.
The Japanese Yen (JPY) recovers slightly from the lowest level since early February, touched against its American counterpart during the Asian session on Tuesday, though any meaningful appreciation seems elusive. The recent fall in the JPY prompted some verbal intervention from Japan’s Finance Minister Satsuki Katayama. This, along with the prevalent risk-off mood, holds back traders from placing aggressive bearish bets around the safe-haven JPY. Apart from this, the lack of follow-through US Dollar (USD) buying contributes to capping the USD/JPY pair.
Meanwhile, reports that Japan's Prime Minister Sanae Takaichi plans tax cuts to boost consumption add to concerns about the government's long-term fiscal health. This comes on top of Japan's weak Q3 GDP print on Monday and could put additional pressure on the Bank of Japan (BoJ) to delay raising interest rates, which could act as a headwind for the JPY. Moreover, less dovish Federal Reserve (Fed) expectations could support the buck and the USD/JPY pair. Traders might also wait for the FOMC Minutes and the delayed US Nonfarm Payrolls (NFP) report this week.
Japanese Yen bears turn cautious amid intervention fears
- Nikkei Asia reported late Monday that Japan's Prime Minister Sanae Takaichi will launch tax-reform talks this week, aiming to cut certain taxes to stimulate investment and consumption while raising others and eliminating breaks to fill the fiscal hole.
- The report added that the ruling Liberal Democratic Party (LDP) and its coalition partner will discuss next year’s tax package, including the agreed-upon removal of gasoline and diesel surcharges, a move that will leave a ¥1.5 trillion revenue gap.
- Government data released on Monday showed that Japan's economy contracted for the first time in six quarters during the July-September period. This tempers bets that the Bank of Japan will hike rates soon amid increasing political resistance.
- Japan’s Finance Minister Satsuki Katayama said at a regular news conference this Tuesday that we have been alarmed by the recent one-sided, rapid moves in the foreign exchange market, fueling speculations about government intervention.
- In fact, Katayama added that the government will thoroughly monitor for excessive fluctuations and disorderly movements in the forex market, with a high sense of urgency, which holds back traders from placing fresh bearish bets around the JPY.
- Several Fed officials recently signaled caution on further monetary easing amid the lack of economic data, forcing investors to scale back their expectations for a rate cut in December. This acts as a tailwind for the US Dollar and the USD/JPY pair.
- The USD bulls, however, seem reluctant and opt to wait for more cues about the Fed's rate-cut path. Hence, the market focus will remain glued to the FOMC Minutes on Wednesday and the delayed US Nonfarm Payrolls report on Thursday.
- In the meantime, traders will scrutinize speeches from influential FOMC members later this Tuesday, which should continue to play a key role in driving the USD demand and producing short-term trading opportunities around the USD/JPY pair.
USD/JPY corrective slide below 155.00 is likely to be short-lived
From a technical perspective, the overnight close above the 155.00 psychological mark could be seen as a fresh trigger for the USD/JPY bulls. Furthermore, oscillators on the daily chart are holding in positive territory and are still away from being in the overbought zone, suggesting that the path of least resistance for spot prices remains to the upside. Hence, some follow-through strength beyond the 155.60-155.65 intermediate hurdle, towards reclaiming the 156.00 round figure, looks like a distinct possibility.
On the flip side, any corrective pullback below the 155.00 mark is more likely to find decent support and attract fresh buyers near the 154.50-154.45 region. The latter should act as a key pivotal point, which, if broken decisively, might prompt some technical selling and drag the USD/JPY pair to the 154.00 round figure. The downfall could extend further towards the next relevant support near the 153.60-153.50 region en route to the 153.00 mark.
Bank of Japan FAQs
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
- WTI price dips as oversupply concerns resurface following an ING report forecasting a substantial market surplus through 2026.
- Goldman Sachs warned that a production surge could sustain a surplus of about 2 million barrels per day.
- Oil prices may regain support as US sanctions on Rosneft and Lukoil take effect on November 21.
West Texas Intermediate (WTI) Oil price stalls its three-day rally, slipping to around $59.60 per barrel during Asian hours on Tuesday. Prices softened amid renewed concerns about oversupply after an ING report projected a significant market surplus through 2026. Goldman Sachs also echoed this view on Monday, noting that a production surge could maintain a roughly 2 million-barrel-per-day surplus, likely weighing on Oil prices over the next two years, per Reuters.
The broader outlook for Oil prices remains bearish as both OPEC and non-OPEC producers ramp up output while demand growth slows. OPEC+ recently approved a 137,000 barrels per day increase in its December production target, matching the hikes for October and November, and agreed to pause further increases in the first quarter of 2025.
The prices of the black Gold also came under pressure after Russia’s Novorossiysk port resumed loadings on Sunday, following a two-day shutdown caused by a Ukrainian attack. Still, ongoing Ukrainian strikes on Russian energy infrastructure keep uncertainty elevated, with markets assessing their potential long-term impact on Moscow’s crude exports.
However, the Oil prices may regain support as US sanctions on Rosneft and Lukoil, set to begin on November 21. These measures have already pushed major buyers, including China, India, and Turkey, to halt purchases and seek alternative suppliers.
Additional geopolitical risks continue to offer some support to crude prices, including export disruptions from recent attacks in Sudan, Iran’s seizure of a tanker in Gulf waters last week, and the possibility of US military action in Venezuela.
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/CAD is seen consolidating in a narrow range amid mixed fundamental cues.
- Softer Canadian CPI print and a downtick in Crude Oil prices undermine the Loonie.
- Economic concerns cap USD and the pair, though less dovish Fed bets favor bulls.
The USD/CAD pair struggles to capitalize on the previous day's positive move to a one-and-a-half-week high and oscillates in a narrow range during the Asian session on Tuesday. Spot prices currently trade around mid-1.4000s, nearly unchanged for the day, though the supportive fundamental backdrop favors bullish traders.
The Canadian Dollar (USD) continues to be undermined by data released on Monday, which pointed to signs of easing domestic inflation pressures. In fact, Canada's headline Consumer Price Index (CPI) decelerated from 2.4% YoY to 2.2% in October. The reading, however, was slightly above the 2.1% expected. Apart from this, a softer tone surrounding Crude Oil prices is seen weighing on the commodity-linked Loonie and acting as a tailwind for the USD/CAD pair.
The US Dollar (USD), on the other hand, is seen consolidating the previous day's strong move up and remains well supported by less dovish Federal Reserve (Fed) expectations. Several Fed officials recently signaled caution on further monetary easing amid the lack of economic data, forcing investors to scale back their bets for a rate cut in December. This, along with the prevalent risk-off environment, benefits the safe-haven buck, lending some support to the USD/CAD pair.
The USD bulls, however, seem reluctant amid concerns about the weakening economic momentum on the back of the longest-ever US government shutdown. Moreover, traders opt to wait for the FOMC Minutes, due on Wednesday, and the delayed US Nonfarm Payrolls (NFP) report for October on Thursday for more cues about the Fed's rate-cut path. This, in turn, will play a key role in influencing the USD price dynamics and provide a fresh impetus to the USD/CAD pair.
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
- NZD/USD loses ground to near 0.5655 in Tuesday’s Asian session.
- The dovish RBNZ's stance and weak New Zealand growth undermine the Kiwi.
- New Zealand lifted US tariffs on $1.25 billion in exports.
The NZD/USD pair drifts lower to around 0.5655 during the Asian trading hours on Tuesday. The New Zealand Dollar (NZD) softens against the US Dollar (USD) amid an imminent rate cut from the Reserve Bank of New Zealand (RBNZ). Traders await the release of the US September Nonfarm Payrolls (NFP) report later on Thursday.
The RBNZ cut the Official Cash Rate (OCR) to 2.5% at its October meeting after a larger-than-expected 0.9% contraction in Gross Domestic Product (GDP) for the second quarter of 2025. A further reduction of 25 basis points (bps) to 2.25% is widely anticipated at the next meeting on November 26, 2025. The RBNZ has already delivered a series of rate cuts throughout 2025 in an attempt to stimulate a struggling economy.
The prospect of the RBNZ's aggressive rate-cutting policy overshadowed the US decision to roll back tariffs on Kiwi exports. This, in turn, could exert some selling pressure on the NZD and acts as a tailwind for the pair. In the near term
Meanwhile, US President Donald Trump lifted tariffs on more than 200 food products in response to rising US grocery prices. On Sunday, New Zealand welcomed the announcement that it would remove additional tariffs on a range of New Zealand agricultural products, including beef, offal, and kiwi fruit.
Trump removed tariffs on New Zealand exports on more than 200 food products, including beef, amid consumer concerns about rising US grocery prices. It is worth about NZ$2.21 billion ($1.25 billion) annually.
Hawkish remarks from Fed policymakers ahead of a deluge of US economic data spooked traders and could weigh on the USD. Kansas City Fed President Jeffery Schmid said on Friday that monetary policy should lean against demand growth, adding that current Fed policy is “modestly restrictive,” which he believes is appropriate.
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.
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