Forex News

• Gold climbs over 1% after US Nonfarm Payrolls show 92K job losses.
• Unemployment rises to 4.4%, pushing Fed easing bets to 43 bps.
• XAU/USD still set for weekly loss as strong US Dollar and yields weigh.

Gold price (XAU/USD) rallies on Friday during the North American session, boosted by a weaker-than-expected US jobs report and a risk-off market mood amid the Middle East conflict. At the time of writing, XAU/USD trades near $5,140, up more than 1%.

Bullion rebounds as risk aversion rises and traders boost Fed rate cut bets

Despite posting gains on Friday, Gold is poised to end the week on a lower note. Factors such as broad US Dollar strength and rising US Treasury yields weighed on the yellow metal, set to end the week with nearly 2.50% losses.

In the meantime, US Nonfarm Payroll figures for February were dismal, with the economy shedding over 92K jobs, beneath forecasts of a creation of 59K jobs. The Unemployment Rate ticked higher at 4.4%, but it remained beneath the Federal Reserve’s 4.5% projected for 2026.

US Retail Sales for January contracted 0.2% MoM due to a drop in car sales, related to winter weather disruptions. Economists estimated a drop of 0.3%, so the report was better than expected, but revealed a deterioration in households’ consumption, falling for the second straight month.

After the data, traders priced in 43 basis points of Fed rate cuts towards the end of the year, up from 35 basis points a day ago, as revealed by Prime Market Terminal data.

Several Fed officials crossed the wires. Kansas City Fed President Jeffrey Schmid commented that businesses are not hiring people, while Governor Stephen Miran said that he’s hesitant to read too much into one month of jobs data, adding that policy is miscalibrated, too restrictive.

San Francisco Fed Mary Daly said that February’s employment data was disappointing and undermined the notion that the labor market was stabilizing. However, she added that holding rates steady, “while we collect more information.”

Given the backdrop, traders could expect the Fed to keep rates unchanged at the March 17-18 meeting, yet eyes would be on updates to the so-called dot-plot in the Summary of Economic Projections (SEP).

Next week, the US economic docket is packed

Next week, the US economic schedule will feature the inflation data on the consumer side, housing data, Gross Domestic Product (GDP) figures, Durable Goods Orders, Initial Jobless Claims and the Fed’s preferred inflation gauge, the Core Personal Consumption Expenditure (PCE) Price Index.

XAU/USD technical outlook: Gold trades range-bound within $5,100-$5,150

Gold price is upward-biased, though as of writing, buyers had failed to clear Thursday’s high of $5,195, which could open the door to challenge $5,200. Bullish momentum seems weak as depicted by the Relative Strength Index (RSI), above its 50-neutral level, but it remains far from its latest peak.

If XAU/USD surpasses $5,150, the next resistance would be the March 5 high at $5,194. On further strength, the March 4 daily high at $5,206 is up next, followed by the February 24 high at $5,249 and then $5,300.

Conversely, if Gold prices retreat below $5,100, it opens the door to test the 20-day Simple Moving Average (SMA) at $5,091. The next area of demand will be the $5,000 figure, ahead of the 50-day SMA near $4,855, ahead of the February 17 cycle low at $4,841.

• US employment contracts in February, raising concerns about the economic outlook.
• Rising geopolitical tensions in the Middle East boost demand for safe-haven assets.
• The Swiss Franc strengthens while the SNB reiterates its readiness to limit excessive currency appreciation.

USD/CHF declines on Friday, trading around 0.7780 at the time of writing, down 0.44% on the day, as the Swiss Franc (CHF) benefits from increased safe-haven demand amid economic and geopolitical uncertainty.

The latest data released by the Bureau of Labor Statistics (BLS) surprised markets to the downside. Nonfarm Payrolls (NFP) declined by 92K jobs in February, sharply missing expectations for a 59K increase. The previous month’s figure was also revised lower to 126K. At the same time, the Unemployment Rate rose to 4.4% from 4.3%, while the Labor Force Participation Rate edged down to 62%.

Wage growth, however, remains relatively firm. Average Hourly Earnings increased by 0.4% MoM and by 3.8% YoY, complicating the outlook for the Federal Reserve (Fed), which must balance signs of labor market cooling with still-elevated wage pressures.

In addition, US Retail Sales declined by 0.2% MoM in January, confirming a gradual slowdown in consumer spending and reinforcing concerns about the resilience of domestic demand.

On the geopolitical front, tensions in the Middle East intensified after US President Donald Trump stated that there would be “no deal with Iran except unconditional surrender”, increasing global risk aversion. Against this backdrop, the US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, trades flat on Friday near 99.00, reflecting a balance between weak economic data and safe-haven flows.

The Swiss Franc benefits from this cautious environment. Meanwhile, Swiss National Bank (SNB) Vice-President Antoine Martin reiterated that the central bank remains ready to intervene in foreign exchange markets to prevent excessive appreciation of the Swiss currency.

MUFG analysts note that Asia FX will stay driven by the US-Israel conflict with Iran and related energy disruptions, while macro policy divergence also gains importance. They highlight modest Asia currency depreciation versus the Dollar so far, but warn that a longer war, higher energy prices and US CPI upside could trigger sharper Asia FX weakness and possible central bank action.

War, energy and data drive Asia FX

"The primary focus for Asia FX market next week likely remains on the development of the war."

"Markets thus far clearly is only pricing in a short-lived war, a short-lived disruption to energy and overall global markets."

"Any drastically different outlook for the future development of the war would mean more disastrous market reaction, including Asia FXs."

"Additionally, with some of Asian FXs’ values at historical low, the potential further trade balance shock should energy prices further rise, may prompt some of Asian central banks to intervention in FX markets, including potential "verbal intervention" from Japanese and South Korean officials to stem the rapid depreciation of the JPY and KRW."

"Most critical is the US CPI on March 11, where an upside surprise would reinforce the Fed’s 'higher-for-longer' stance and pressure Asian EM capital flows, as well as Asian currencies too."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• The Dow fell around 600 points on Friday, extending its weekly loss to over 1K points amid a toxic mix of labor market weakness and surging Oil prices.
• Nonfarm Payrolls came in at -92K for February, massively undershooting the +59K consensus and marking the third negative print in five months.
• The Unemployment Rate ticked up to 4.4% while Average Hourly Earnings ran hot at 0.4% MoM, painting a stagflationary picture.
• Rate cut expectations shifted forward, with traders now pricing the next Federal Reserve cut for July and increasing odds of two cuts before year-end.

The Dow Jones Industrial Average was down around 600 points, or 1.26%, near 47,340 on Friday at the time of writing, capping off a brutal week that saw the blue-chip index shed over 1K points. The S&P 500 traded near 6,750, down around 1.1%, while the Nasdaq Composite hovered near 22,550, off roughly 0.9%. The session's damage was driven by a combination of a historically bad jobs report and escalating Oil prices tied to the US-Iran conflict, with WTI crude breaking above $89 and Brent topping $91.

Payrolls plunge catches Wall Street off guard

February's Nonfarm Payrolls (NFP) print of -92K was a gut punch. The consensus had expected a modest 59K gain after January's downwardly revised 126K, making the miss one of the widest in recent memory — a deviation of more than three standard errors from expectations. To make matters worse, December's figure was revised sharply lower, from 48K down to -17K, meaning the economy actually lost jobs in two of the last three months. The Bureau of Labor Statistics (BLS) attributed much of the February decline to a 28K drop in healthcare employment, largely driven by the Kaiser Permanente strike in California and Hawaii that sidelined over 30K workers. Federal government payrolls continued to shrink, down another 10K, extending a trend that has now seen 330K federal jobs disappear since October 2024. Construction shed 11K after a strong January, manufacturing lost 12K, and transportation and warehousing dropped 11K. Long-term unemployment also rose, with the average duration hitting 25.7 weeks — the longest since December 2021.

Unemployment rate rises, wages stay sticky

The Unemployment Rate edged up to 4.4% from 4.3%, above the consensus expectation of no change. Labor Force Participation also slipped to 62% from 62.1%, suggesting some workers are dropping out of the workforce entirely rather than finding new roles. On the wage side, Average Hourly Earnings came in hotter than expected at 0.4% month-over-month and 3.8% year-over-year, both a tenth above forecast. That's the wrong combination for the Federal Reserve (Fed) — a weakening labor market paired with sticky wage growth feeds directly into the stagflation narrative that has been building since Oil prices started spiking earlier this week. Fed Governor Christopher Waller, speaking earlier Friday morning in what FXStreet Speech Tracker rated as a hawkish 6.6 appearance, had notably left the door open for a rate move depending on the data. Waller has been one of the more dovish voices on the Federal Open Market Committee (FOMC), so his willingness to entertain action underscores how fluid the policy picture has become.

Retail sales offer little relief

January Retail Sales data, also released Friday, did little to improve the mood. The headline came in at -0.2% month-over-month, slightly better than the -0.3% consensus but still a negative read that points to a consumer pulling back after the holiday season. Retail Sales ex-Autos were flat at 0.0%, while the Control Group — which feeds into Gross Domestic Product (GDP) calculations — managed a 0.3% gain, offering a faint silver lining. Taken together with the payrolls data though, the consumer picture is softening. Fewer people working, lower participation, and declining retail activity don't paint a picture of an economy that can sustain elevated interest rates much longer.

Rate expectations shift but Oil complicates everything

Following the NFP release, traders pulled forward expectations for the next Fed rate cut to July and increased the probability of two cuts before year-end, according to CME FedWatch data. The March 18 meeting remains a near-certain hold, with a roughly 96% probability of no change, but the calculus beyond that is shifting quickly. The problem is Oil. With WTI above $89 and Brent above $91, the inflationary impulse from energy prices threatens to offset any dovish pivot the Fed might otherwise make on the back of weak labor data. It's a classic stagflation bind — the economy is weakening, but the cost of energy is rising, and the Fed can't ease aggressively without risking an inflation resurgence. Treasury yields reflected this tension, with the 10-year pushing above 4.17% and the 2s10s spread widening to 57 basis points.

Financials and industrials lead the selloff

Goldman Sachs (GS) dropped around 3.4%, American Express (AXP) fell 3.2%, and JPMorgan (JPM) slid roughly 3%, making financials the worst-performing group in the Dow for a second straight session. Caterpillar (CAT) continued its slide, down around 2.8%, as the weakening jobs picture and slowing global growth weighed on industrial names. Asset managers had a particularly rough day, with Blue Owl (OWL) dropping 6% amid concerns over private credit exposure, while BlackRock (BLK) and Blackstone (BX) each fell around 4%. On the other end, energy was the only sector in the green — Exxon Mobil (XOM) and Chevron (CVX) each gained more than 1%, while Occidental Petroleum (OXY) climbed 3.3% on the back of surging crude. Gold caught a bid as well, trading above $5,150 as the risk-off mood and rate cut repricing supported haven demand. The VIX spiked nearly 10% to above 26, reflecting the elevated anxiety heading into the weekend.

Dow Jones daily chart

• AUD/USD advances after a sharp contraction in US employment in February.
• Markets reassess the monetary policy outlook as labor market momentum deteriorates. 
• Expectations of further rate hikes in Australia support the Australian Dollar.

AUD/USD trades around 0.7020 on Friday at the time of writing, up 0.11% on the day, as investors digest a much weaker-than-expected US employment report.

The Nonfarm Payrolls (NFP) report published by the Bureau of Labor Statistics showed that employment declined by 92K jobs in February, sharply missing expectations for an increase of 59K. The previous month’s figure was also revised slightly lower to 126K. At the same time, the Unemployment Rate rose to 4.4% from 4.3%, while the Labor Force Participation Rate edged down to 62%.

Despite deteriorating job creation, wage pressures remain relatively firm. Average Hourly Earnings increased by 0.4% MoM and 3.8% YoY, a level that could complicate the monetary policy path of the Federal Reserve (Fed).

Consumer data also points to signs of economic cooling. US Retail Sales declined by 0.2% MoM in January, confirming a slowdown in domestic demand.

In this environment, the US Dollar (USD) is still receiving some support from safe-haven flows driven by geopolitical tensions in the Middle East following comments by US President Donald Trump regarding Iran. “There will be no deal with Iran except unconditional surrender”, said Trump.

Meanwhile, the Australian Dollar (AUD) remains supported by expectations of tighter monetary policy from the Reserve Bank of Australia (RBA). Markets estimate a roughly 33% probability of a 25-basis-point rate hike at the March 17 meeting, while a rate increase is now fully priced in for May, according to Reuters. Rising energy prices linked to geopolitical tensions in the Middle East are also reinforcing expectations of a more hawkish stance from the Australian central bank.

• Gold on the back foot, heads for weekly loss despite elevated Middle East geopolitical risks.
• Rising Oil price fuels inflation fears, prompting markets to scale back Fed interest rate cut bets.
• XAU/USD slips below the 50-SMA on the 4-hour chart, signalling weakening momentum.

Gold (XAU/USD) gains traction on Friday after trading under pressure for most of the day, with the US Dollar (USD) and Treasury yields easing as traders digest soft US Nonfarm Payrolls (NFP) data.

At the time of writing, XAU/USD is trading around $5,140 after bouncing off daily lows near $5,062.

US Nonfarm Payrolls fell by 92K in February, missing expectations for a 59K increase. Meanwhile, January’s reading was revised lower to 126K from 130K. The Unemployment Rate ticked up to 4.4% from 4.3% in the previous month.

US Retail Sales declined 0.2% in January, beating expectations for a 0.3% drop, following a 0% reading in December. Meanwhile, the Retail Sales Control Group, which feeds directly into GDP calculations, rose 0.3% during the month. Retail Sales excluding Autos remained unchanged at 0%, matching market expectations.

Gold under pressure as markets scale back Fed rate cut bets amid rising Oil prices

The yellow metal remains on track for its first weekly loss in five weeks, even as the conflict between the United States (US) and Iran shows no signs of de-escalation, keeping geopolitical risks elevated.

The war has entered its seventh day, with the US-Israeli forces intensifying airstrikes on Tehran. At the same time, Iran continues to launch retaliatory missile and drone attacks against US military bases across the Gulf.

However, Gold has struggled to attract safe-haven flows as investors increasingly focus on the potential economic fallout, with rising Oil price fueling global inflation concerns. Qatar’s Energy Minister Saad al-Kaabi has warned that a halt in Gulf energy exports could push crude prices as high as $150 per barrel.

This has prompted traders to scale back expectations for Federal Reserve (Fed) interest rate cuts, lending broader support to the US Dollar and Treasury yields while increasing the opportunity cost of holding the non-yielding metal, even as both eased slightly following the softer US jobs data.

Markets are now pricing in roughly a 35% chance of a 25 bps rate cut in June, down from more than 40% a week ago, according to the CME FedWatch Tool. Deutsche Bank noted that total easing priced in for 2026 has slipped to around 40 bps by December, the lowest level so far this year.

Technical analysis: XAU/USD stabilizes above $5,100

On the 4-hour chart, the near-term bias remains mildly bearish as the price slips below the 50-period Simple Moving Average (SMA) and holds marginally above the flatter 100-period SMA, indicating weakening bullish momentum after sellers emerged near the $5,400 level earlier this week.

The Relative Strength Index (RSI) has eased from overbought extremes toward the mid-40s, suggesting momentum has normalised rather than reversed. The Average Directional Index (ADX) near the mid-20s signals a moderate but fading trend, keeping the upside favoured but leaving the market vulnerable to corrective swings.

On the upside, immediate resistance emerges near the 50-period SMA around $5,200, with a sustained break above this barrier needed to revive bullish momentum.

On the downside, the $5,000-$5100 area serves as immediate support. A decisive break below this level could strengthen selling pressure, exposing the next downside targets near $4,850, followed by $4,650 and $4,400.

• USD/JPY climbs even though US Nonfarm Payrolls dropped in February.
• Unemployment rises to 4.4%, lifting odds of a Fed rate cut to 50%.
• BoJ warns Yen volatility could impact inflation and monetary policy outlook.

USD/JPY rises and challenges the 158.00 figure on Friday, up over 0.20% after the latest US employment report signaled weakness in the labor market. Also, the Middle East conflict deteriorates market mood, maintaining the US Dollar (USD) bid during the week.

US Dollar holds firm on risk aversion even as NFP miss boosts Fed cut bets

February’s Nonfarm Payrolls print was worse than expected as the US economy slashed 92K jobs in the month, missing estimates of a creation of 59K jobs. At the same time, the Unemployment Rate rose from 4.3% to 4.4%, a tenth below the Federal Reserve’s 4.5% projected for 2026, with the data increasing the chances for a rate cut in the foreseeable future.

Money markets saw the odds of a 25-basis-point Fed rate cut rising from around 35% ahead of the data to 50%, according to Prime Market Terminal.

Mary Daly, San Francisco Fed President, said that both goals are at risk now, and added that no one month of data is decisive, yet revealed that the labor market is vulnerable. Nevertheless, she added that although she is concerned, strikes, snow and population benchmarking make the NFP report harder to interpret.

Daly favors holding rates steady “while we collect more information,” regarding the jobs market and inflation.

At the same time, US Retail Sales contracted 0.2% MoM, better than the expected 0.3% fall

In Japan, Bank of Japan (BoJ) Deputy Governor Ryozo Himino commented that the central bank is vigilant about the Japanese Yen (JPY) moves as it could affect core inflation. He said at the parliament that, “We need to be mindful that exchange-rate fluctuation has a bigger impact on price moves than in the past. Through this channel, they could affect inflation expectations and underlying inflation.”

USD/JPY Price Forecast: Technical outlook

In the daily chart, USD/JPY trades at 157.73. The near-term bias is bullish as spot holds well above the rising support trend line from 152.10 and rides a sequence of higher daily lows. Price action trades above the clustered simple moving averages around 156.10, confirming an upside trend backdrop, while the break of the prior descending resistance line from 159.23 has shifted former capping pressure into a more supportive configuration. The RSI at 61 signals firm bullish momentum without entering overbought territory, reinforcing the view that buyers retain control in the near term.

Initial support emerges at the 156.10 moving average area, ahead of the broken resistance trend-line region near 154.70, where a deeper pullback would test the integrity of the latest breakout. Below that, the higher rising trend line from 152.10 forms a more distant but important structural floor. On the upside, immediate resistance sits near the recent highs around 157.70, with a sustained break opening the way toward the 159.20 region as the next bullish target. As long as price holds above 156.10 on a daily closing basis, the path of least resistance remains to the upside.

(The technical analysis of this story was written with the help of an AI tool.)

ING’s James Knightley notes that expectations for Federal Reserve easing in 2026 have been reduced as higher near-term US inflation and resilient growth make early rate cuts less likely. ING now sees the Fed cutting in September and December, while upcoming CPI, PCE and GDP data will shape how far markets continue to price out Dollar-negative policy easing.

Fed path repriced with data focus

"Expectations for how far the Fed will cut the policy rate in 2026 have moved from 60bp ahead of the military operations in Iran to 40bp currently. Higher near-term inflation in an environment of economic resilience does indeed make near-term rate cuts look less probable. We have pushed back the timing of when we see the Fed cutting rates from June and September to September and December. While higher energy costs are inflationary, it also puts more pressure on consumer finances and can ultimately be demand destructive, which will push core inflation pressures lower over the medium to longer term."

"Feb CPI (Wed): We're above consensus for CPI and that might nudge the market further into pricing out the possibility of rate cuts. Energy prices are the focus right now for markets, but that will be a March CPI story. Instead, we still see some lingering upward pressure from tariffs on goods prices within the February print. We will also see the January core PCE deflator, which, given the January PPI and CPI reports, points to a 0.4% increase, but this is obviously a month behind next week's CPI data, so it should not be as impactful."

"4Q GDP revisions (Fri): Likely to show little change from the initially reported 1.4% annualised print. While consumer spending and business capex were firm, it was the federal government spending side that held growth back due to the six-week-long government shutdown. Also, watch the trade balance. Imports are rising strongly again and this will be a drag on 1Q growth. It also implies more tariff revenues that we still suspect will add to price pressures in the economy."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)