Forex News
- GBP/USD gains as upcoming US-Iran talks in Pakistan improve market sentiment.
- US headline inflation jumped, but softer core CPI eased market concerns.
- Traders still see the Fed holding rates steady despite higher prices.
GBP/USD climbs on Friday as risk appetite improves ahead of the start of US-Iran talks in Pakistan. Meanwhile, US inflation rose as expected in March, but traders seem confident it's a one-time jump as they remain optimistic about Middle East peace negotiations. At the time of writing, the pair trades at 1.3461, up 0.20%.
Sterling firms as softer core CPI keeps peace optimism intact
Inflation in the US rose in March at its fastest pace in almost four years as the Iran conflict pushed up gasoline and diesel prices. The US Consumer Price Index (CPI) increased by 3.3% YoY as expected, up from February's 2.4%. Core figures ticked up from 2.5% to 2.6% YoY, missing estimates of 2.7%, yet it failed to change investors' expectations that the Federal Reserve (Fed) would not lower borrowing costs this year, as indicated by data from Prime Market Terminal (PMT).
Fed interest rate probabilities
Following the data release, the GBP/USD pair extended its gains as the Greenback continued to decline, as reflected in the US Dollar Index (DXY). The DXY, which tracks the buck's performance against six currencies, is down 0.13% at 98.66, near four-week lows.
Other data revealed that the University of Michigan Consumer Sentiment plunged to a record low in April, falling to 47.6 from March's 53.3, below forecasts of 52. The survey revealed that the war in Iran changed the economic outlook as soaring energy prices pushed gasoline to $4 per gallon. Inflation expectations for one year rose from 3.8% to 4.8%, and for five years, rose from 3.2% to 3.4%.
Mary Daly from the Fed of San Francisco said that the high CPI print was not a surprise, though she added that the real question is whether the ceasefire would persist. Daly commented that policy is restrictive to push inflation lower, yet balanced enough to support the labor market.
In the UK, expectations that the Bank of England (BoE) will raise rates in 2026 ticked higher from 32 to 42 basis points of tightening towards the end of the year, according to LSEG data.
Over the next week, traders will eye the release of Britain's Retail Sales and GDP figures, as well as speeches by BoE Governor Andrew Bailey. Across the pond, the schedule will feature housing data, the Producer Price Index (PPI), jobs data, and Fed speakers.
GBP/USD Price Forecast: Technical Outlook
In the daily chart, GBP/USD trades at 1.3458, holding a constructive bullish bias as spot remains above the clustered 50-, 100- and 200-day simple moving averages (SMAs) around 1.3435. The pair has also reclaimed the broader rising support trend context from the 1.3035 region, while still trading well beneath the longer-term descending resistance line that originates near 1.3869, suggesting the recovery is intact but not yet a full trend reversal.
On the topside, the first meaningful barrier is the descending resistance trend line coming from the 1.3869 area, which caps the broader bullish ambition while it stays intact. On the downside, immediate support is located at the nearby 1.3435 triple SMA cluster, with a deeper floor aligned with the longer-term rising support line traced from around 1.3035, where buyers would be expected to regroup if a corrective pullback develops.
(The technical analysis of this story was written with the help of an AI tool.)
Pound Sterling Price This week
The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -1.70% | -1.99% | -0.24% | -0.77% | -2.64% | -2.53% | -1.39% | |
| EUR | 1.70% | -0.29% | 1.49% | 0.97% | -0.95% | -0.84% | 0.29% | |
| GBP | 1.99% | 0.29% | 1.71% | 1.24% | -0.66% | -0.55% | 0.60% | |
| JPY | 0.24% | -1.49% | -1.71% | -0.54% | -2.40% | -2.27% | -1.18% | |
| CAD | 0.77% | -0.97% | -1.24% | 0.54% | -1.87% | -1.74% | -0.63% | |
| AUD | 2.64% | 0.95% | 0.66% | 2.40% | 1.87% | 0.11% | 1.27% | |
| NZD | 2.53% | 0.84% | 0.55% | 2.27% | 1.74% | -0.11% | 1.16% | |
| CHF | 1.39% | -0.29% | -0.60% | 1.18% | 0.63% | -1.27% | -1.16% |
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 British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
- USD/CAD trims earlier losses as cautious sentiment around US-Iran talks keeps markets volatile.
- Geopolitical risks remain the key driver, with fragile US-Iran ceasefire conditions and escalating rhetoric limiting downside in the US Dollar.
- US inflation rose in March, while Canada’s jobs data showed a modest rebound.
USD/CAD reverses earlier losses on Friday, as uncertainty surrounding upcoming US-Iran negotiations keeps markets cautious and overshadows US inflation and Canadian employment data, keeping price action volatile.
At the time of writing, the pair is trading around 1.3833 and is on track for its first weekly decline after two consecutive weeks of gains, as a modest improvement in the risk sentiment following the US-Iran ceasefire weighs on the US Dollar (USD), though lingering concerns over the ceasefire’s durability help limit further downside.
The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, is trading around 98.70, heading for its biggest decline since January.
The Canadian Dollar (CAD) strengthened earlier in the American session following the release of employment data, which pointed to a modest rebound in the labor market. Net employment rose by 14.1K in March, recovering from a sharp decline of 83.9K in the previous month, though slightly missing expectations of a 15K increase. Meanwhile, the Unemployment Rate held at 6.7%, coming in below expectations of 6.8%.
From a monetary policy perspective, the latest labor market data is unlikely to materially shift the Bank of Canada’s (BoC) cautious stance. Policymakers kept rates steady at 2.25% at their last meeting and are expected to remain patient as they assess the impact of the recent Oil-driven inflation shock.
In the United States, the impact of rising Oil prices was clearly evident in the latest inflation data. Data released by the US Bureau of Labor Statistics showed the Consumer Price Index (CPI) rose 0.9% MoM in March, accelerating sharply from 0.3% in the previous month. On an annual basis, inflation increased to 3.3% YoY from 2.4% in February, with both readings coming in line with market expectations. The firm headline inflation reading reinforces expectations that the Federal Reserve (Fed) will remain on hold in the near term.
Attention now turns squarely to the upcoming US-Iran negotiations scheduled for this weekend in Pakistan. Iran’s Parliament Speaker Mohammad Bagher Ghalibaf said a ceasefire in Lebanon and the release of Iranian blocked assets must be secured before negotiations can proceed.
Meanwhile, US President Donald Trump told The New York Post on Friday that US warships are being reloaded with “the best ammunition” to resume strikes on Iran if peace talks fail.
Employment FAQs
Labor market conditions are a key element to assess the health of an economy and thus a key driver for currency valuation. High employment, or low unemployment, has positive implications for consumer spending and thus economic growth, boosting the value of the local currency. Moreover, a very tight labor market – a situation in which there is a shortage of workers to fill open positions – can also have implications on inflation levels and thus monetary policy as low labor supply and high demand leads to higher wages.
The pace at which salaries are growing in an economy is key for policymakers. High wage growth means that households have more money to spend, usually leading to price increases in consumer goods. In contrast to more volatile sources of inflation such as energy prices, wage growth is seen as a key component of underlying and persisting inflation as salary increases are unlikely to be undone. Central banks around the world pay close attention to wage growth data when deciding on monetary policy.
The weight that each central bank assigns to labor market conditions depends on its objectives. Some central banks explicitly have mandates related to the labor market beyond controlling inflation levels. The US Federal Reserve (Fed), for example, has the dual mandate of promoting maximum employment and stable prices. Meanwhile, the European Central Bank’s (ECB) sole mandate is to keep inflation under control. Still, and despite whatever mandates they have, labor market conditions are an important factor for policymakers given its significance as a gauge of the health of the economy and their direct relationship to inflation.
- US CPI confirms sticky inflation in March, driven by energy shock and the Iran war.
- Middle East uncertainty boosts Oil and supports the USD safe-haven demand.
- Risk-off sentiment and oil-driven volatility cap Aussie upside.
The AUD/USD pair steadies on Friday, posting a slight decline after a four-day strike of gains, trading with a cautious tone amid fresh data releases in the US and geopolitical risks. At the time of writing, AUD/USD trades near 0.7076, down 0.10% in the day, but set to end the week with gains of over 2.50%.
The United States (US) March Consumer Price Index (CPI) report came broadly in line with expectations but still showed firm inflation, largely driven by surging energy prices amid ongoing Middle East tensions. The CPI rose 0.9% in March, accelerating sharply from 0.3% in the previous month, while annual inflation increased to 3.3% YoY from 2.4% in February.
However, inflation data failed to provide convincing support to the US Dollar (USD), which remains under pressure amid heightened tensions around the Strait of Hormuz and ongoing uncertainty in the Middle East, as US and Iran officials are expected to begin peace talks in Pakistan this weekend.
Short-term technical analysis:
On the four-hour chart, AUD/USD trades at 0.7078, holding a constructive bullish bias as it sits above both the 20-period and 100-period simple moving averages (SMAs) at 0.7044 and 0.6959, respectively. The cluster of nearby supports just under the market reinforces the positive tone, while the Relative Strength Index (14) around 66 suggests firm upside momentum without yet signaling extreme overbought conditions.
On the topside, immediate resistance is located at 0.7093, where a horizontal level caps the advance and a break higher would open the way for further gains. On the downside, initial support is seen at 0.7072, followed by 0.7070 and 0.7054, with the 20-period SMA at 0.7044 providing an additional dynamic floor ahead of the deeper 100-period SMA support near 0.6959.
(The technical analysis of this story was written with the help of an AI tool.)
Iran's parliament speaker, Mohammad Baqer Qalibaf, said in a post on X on Friday that two previously agreed measures, a ceasefire in Lebanon and the release of Iran's blocked assets, must be implemented before negotiations begin.
Qalibaf posted on X:
“Two of the measures mutually agreed upon between the parties have yet to be implemented: a ceasefire in Lebanon and the release of Iran’s blocked assets prior to the commencement of negotiations.
These two matters must be fulfilled before negotiations begin.”
Market reaction
The US Dollar Index (DXY) fell towards 98.60 earlier in the day, but seems little changed by the news.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.30% | -0.27% | 0.03% | 0.06% | -0.03% | 0.07% | -0.31% | |
| EUR | 0.30% | 0.03% | 0.34% | 0.35% | 0.26% | 0.37% | -0.01% | |
| GBP | 0.27% | -0.03% | 0.32% | 0.32% | 0.24% | 0.33% | -0.05% | |
| JPY | -0.03% | -0.34% | -0.32% | 0.00% | -0.07% | -0.01% | -0.38% | |
| CAD | -0.06% | -0.35% | -0.32% | -0.01% | -0.11% | 0.00% | -0.39% | |
| AUD | 0.03% | -0.26% | -0.24% | 0.07% | 0.11% | 0.10% | -0.29% | |
| NZD | -0.07% | -0.37% | -0.33% | 0.01% | -0.00% | -0.10% | -0.39% | |
| CHF | 0.31% | 0.00% | 0.05% | 0.38% | 0.39% | 0.29% | 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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
- Gold holds steady, heading for a third weekly gain as traders weigh Middle East developments and US inflation data.
- Softer US Dollar supports prices, though upside momentum remains limited amid the Fed’s higher-for-longer interest rate outlook.
- Technically, XAU/USD consolidates within a rising channel below the 200-SMA on the 4-hour chart.
Gold (XAU/USD) holds steady on Friday but lacks strong upside momentum as markets continue to monitor the evolving situation in the Middle East, while traders digest the latest US inflation data. At the time of writing, XAU/USD is trading flat around $4,775 and is on track for a third straight weekly gain.
Data released by the US Bureau of Labor Statistics showed a clear impact of higher energy costs, with inflation coming in line with expectations. The Consumer Price Index (CPI) rose 0.9% MoM in March, accelerating sharply from 0.3% in the previous month. Annual inflation increased to 3.3% YoY from 2.4% in February.
However, the data failed to provide support to the US Dollar (USD), which remains under pressure amid a modest improvement in risk sentiment following the two-week ceasefire agreement between the US and Iran. This, in turn, is supporting XAU/USD and helping limit the downside.
US President Donald Trump told NBC News on Thursday that he was “very optimistic” a peace deal with Iran was within reach. Meanwhile, Israeli Prime Minister Benjamin Netanyahu said his country would begin direct talks with Lebanon “as soon as possible.”
Still, tensions remain elevated as Israeli strikes continue in Lebanon, keeping markets cautious ahead of upcoming US-Iran negotiations in Pakistan.
Iran’s Parliament Speaker Mohammad Bagher Ghalibaf said a ceasefire in Lebanon and the release of Iranian blocked assets must be secured before negotiations can proceed.
Against this backdrop, Gold's price action remains driven by geopolitical headlines and shifting expectations for Federal Reserve (Fed) interest rates.
Fed policymakers have repeatedly highlighted that both sides of the dual mandate are at risk, with the disinflation process slowing while labor market conditions show signs of strain. In this context, Oil-driven inflation is likely to keep the Fed on hold in the coming months, unless a meaningful breakthrough in US-Iran talks leads to a sustained decline in Oil prices.
Technical analysis: XAU/USD consolidates within a rising channel
From a technical perspective, the 4-hour chart shows XAU/USD trading within an upward-sloping parallel channel, forming a series of higher highs and higher lows since bottoming near the $4,100 March swing low.
However, price action reflects a neutral-to-capped near-term tone, as the pair trades below the 200-period Simple Moving Average (SMA) at $4,876 while holding above the 100-period SMA at $4,608.
The Relative Strength Index (RSI) around 57 hints at mildly positive momentum, yet the Moving Average Convergence Divergence (MACD) line remains below the signal line and above zero, with negative histogram bars holding, reinforcing a consolidative phase within the rising channel.
On the topside, immediate resistance is defined first by the 200-period SMA at $4,878, with a break higher opening the way toward the channel’s upper boundary near $5,000 as the next significant supply zone.
On the downside, initial demand emerges around the channel bottom at $4,700, which guards more substantive support at the 100-period SMA at $4,608. A sustained move below the latter would weaken the broader constructive channel narrative and expose deeper losses, while holding above these supports would keep the current consolidation phase intact inside the rising structure.
(The technical analysis of this story was written with the help of an AI tool.)
Inflation FAQs
Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
TD Securities strategists Robert Both and Emma Lawrence note that Canadian labour markets showed a modest rebound in March, with 14k jobs added and the unemployment rate steady at 6.7%. Stronger wage growth for permanent workers and higher hours worked give the data a hawkish tilt, but softer core inflation and other wage indicators mean the report is unlikely to significantly alter Bank of Canada (BoC) policy expectations or front-end rate valuations.
Labour rebound but BoC reaction muted
"Stronger wage growth gave a hawkish tone to the report, but we do not expect it to weigh too heavily on the next BoC decision given the recent deceleration across core inflation measures and the softer performance across other wage indicators."
"Softer core inflation momentum should also make it easier to look through the acceleration for LFS wage growth."
"However, stronger wage growth will be more difficult to look through if higher energy prices start spilling over into broader inflation pressures."
"Markets have remained highly focused on the geopolitical backdrop and energy prices as a driver for the near-term BoC path, so the reaction (or rather lack thereof) isn’t surprising despite Macklem's comment that the labour market remains soft."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Commerzbank’s Volkmar Baur expects the Bank of Japan (BoJ) to deliver two further rate hikes in 2026, taking policy closer to a rising neutral rate and supporting a modest Japanese Yen appreciation versus Dollar (USD) and Euro (EUR) in the second half of the year. He also projects USD/JPY and EUR/JPY to edge lower from current levels into late 2026 and 2027.
BoJ tightening seen lifting Japanese Yen
"The current policy rate of 0.75% is therefore still below even the lowest estimate of the neutral interest rate."
"All in all, one can therefore say that financial conditions remain stimulative, which would support the assessment that the key interest rate has not yet reached a neutral level."
"This supports our view that the Bank of Japan will raise interest rates two more times this year."
"The pricing out of these expectations in the US and Europe should therefore cause the Japanese yen to appreciate against the USD and the euro in the second half of the year."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Wells Fargo’s international economics team notes that a fragile ceasefire in the Middle East leaves Oil market risks elevated and conviction on the outlook low. They still assume active conflict ends by mid‑2026 and expect Oil to trend lower into H2 2026, but emphasize that large potential supply shut‑ins and slow normalization could keep prices and volatility higher than markets imply.
Ceasefire fails to resolve Oil risks
"The announced ceasefire looks fragile and keeps Middle East risk elevated."
"We still assume active conflict ends by mid‑year and oil trends lower into H2 2026, but conviction on the outlook remains low amid persistent geopolitical stress."
"This is a large and worsening supply shock."
"The IEA estimates potential oil supply shut‑ins near 10 mbpd, roughly 10% of global supply, with conditions deteriorating further through April."
"Ceasefire does not mean normalization. Shipping through Hormuz and energy production will recover slowly, if at all, without durable peace."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Consumer confidence is expected to ease in April.
- One-year inflation expectation picked up pace to 4.8%.
American consumer confidence deflated in early April, as households grew more pessimistic about current conditions and the broader economic outlook, according to preliminary data from the University of Michigan released on Friday.
The closely watched Consumer Sentiment Index receded to 47.6 from 53.3 in the previous month, missing economists’ expectations (52) and falling to the lowest level recorded in the survey's 70-plus-year history.
Furthermore, the Current Conditions index edged lower to 50.1 from 55.8, while the Expectations gauge dropped to 46.1 from 51.7, highlighting a downbeat scenario for the months ahead.
Inflation expectations, meanwhile, are seen picking up pace: the one-year outlook rose to 4.8% from 3.8%, and the five-year forecast increased a tad to 3.4% from 3.2%.
Market reaction
The US Dollar remains well offered, navigating the area of multi-week lows and sending the US Dollar Index (DXY) back to the 98.50 zone.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.28% | -0.26% | 0.08% | -0.05% | -0.05% | -0.03% | -0.54% | |
| EUR | 0.28% | 0.02% | 0.37% | 0.21% | 0.22% | 0.25% | -0.26% | |
| GBP | 0.26% | -0.02% | 0.36% | 0.22% | 0.22% | 0.24% | -0.28% | |
| JPY | -0.08% | -0.37% | -0.36% | -0.15% | -0.14% | -0.16% | -0.66% | |
| CAD | 0.05% | -0.21% | -0.22% | 0.15% | -0.01% | 0.02% | -0.50% | |
| AUD | 0.05% | -0.22% | -0.22% | 0.14% | 0.01% | 0.02% | -0.50% | |
| NZD | 0.03% | -0.25% | -0.24% | 0.16% | -0.02% | -0.02% | -0.51% | |
| CHF | 0.54% | 0.26% | 0.28% | 0.66% | 0.50% | 0.50% | 0.51% |
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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
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