Forex News
- The US Dollar remains supported after positive comments on the meeting between Donald Trump and Xi Jinping.
- US inflation accelerated in April, reinforcing expectations for a prolonged restrictive monetary policy stance.
- Hawkish comments from the Bank of Japan are nevertheless limiting the pair’s upside potential.
USD/JPY trades around 157.95 on Thursday at the time of writing, up modestly by 0.05% on the day, as the pair remains close to its highest level in two weeks. The move continues to be mainly supported by the resilience of the US Dollar (USD) after several macroeconomic developments favored the US currency.
The US Dollar maintains a firm tone after White House officials described the meeting between United States (US) President Donald Trump and Chinese President Xi Jinping as positive. The two leaders discussed ways to strengthen economic cooperation, including broader access for US businesses to the Chinese market and increased Chinese investment in the United States. Discussions also covered geopolitical matters, with both sides agreeing on the importance of keeping the Strait of Hormuz open.
Support for the Greenback also comes from the latest upstream inflation data. The US Producer Price Index (PPI) rose by 6% YoY in April, its fastest pace since 2022, compared with 4.3% previously and above market expectations of 4.9%. On a monthly basis, the index increased by 1.4%, significantly above the expected 0.5%.
These figures reinforce expectations that the Federal Reserve (Fed) could maintain a restrictive monetary policy stance for an extended period. Markets have gradually priced out expectations for interest rate cuts this year, with some investors now considering the possibility of a rate hike before year-end.
On the Japanese side, the Japanese Yen (JPY) continues to find support from monetary tightening expectations. The Bank of Japan (BoJ) Summary of Opinions showed that several policymakers are considering an interest rate hike as early as the next meeting. Comments from board member Kazuyuki Masu also strengthened this view. MUFG noted that rising Japanese government Bond yields continue to support the outlook for near-term tightening, while BBH estimates that markets are currently pricing in around a 75% chance of a rate hike in June.
Investors are now turning their attention to the US April Retail Sales report later in the day, which could provide fresh clues on consumer spending trends and the Federal Reserve’s next policy steps.
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.06% | 0.06% | 0.03% | 0.13% | 0.21% | 0.04% | -0.06% | |
| EUR | -0.06% | -0.02% | -0.06% | 0.07% | 0.10% | -0.05% | -0.12% | |
| GBP | -0.06% | 0.02% | -0.04% | 0.08% | 0.14% | -0.03% | -0.08% | |
| JPY | -0.03% | 0.06% | 0.04% | 0.08% | 0.17% | -0.01% | -0.11% | |
| CAD | -0.13% | -0.07% | -0.08% | -0.08% | 0.09% | -0.11% | -0.14% | |
| AUD | -0.21% | -0.10% | -0.14% | -0.17% | -0.09% | -0.16% | -0.20% | |
| NZD | -0.04% | 0.05% | 0.03% | 0.01% | 0.11% | 0.16% | -0.06% | |
| CHF | 0.06% | 0.12% | 0.08% | 0.11% | 0.14% | 0.20% | 0.06% |
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 Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
TD Securities’ Senior Commodity Strategist Ryan McKay argues the recent easing in the Oil market is temporary, warning that Brent could still reach $150/bbl or higher if supply risks materialize. He highlights constrained speculative flows, Chinese storage draws, tightening product markets and rapid US inventory declines as factors that may force demand destruction through significantly higher prices.
Calm market hides severe supply risks
"The energy market has entered a period of relative calm, but we argue the recent easing in the market is temporary and renewed periods of angst are just around the corner if there is no resumption of flows imminently."
"Elevated export volumes from the US and other cargoes bought during the April panic are starting to reach their destinations in Europe and Asia."
"As such, refiners have crude on hand for immediate use and, as of now, are opting to wait for a possible end to the conflict before securing their next shipments."
"Elevated exports and refineries continuing to run hot are likely going to keep crude inventories drawing heavily through the summer, with no end in sight."
"Storms are brewing that could still see Brent crude hit $150/bbl or higher."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
BNY’s Bob Savage notes that India is considering cutting taxes on foreign investors’ bond income to attract inflows and support the Indian Rupee (INR), which has fallen over 6% against the US Dollar (USD) in 2026. Authorities also requested an extension of the U.S. waiver on Russian Oil imports to stabilize domestic energy supply and costs. These measures aim to ease funding pressures and curb INR depreciation.
Policy moves to stem rupee weakness
"India saw a INR reversal and bond rally after floating a plan to reduce bond investment taxes on foreign investors."
"India is considering reducing taxes on foreign investors’ bond income to align with global norms and attract capital inflows, at the recommendation of the Reserve Bank of India. This move aims to curb the rupee’s depreciation, which has fallen over 6% against the dollar in 2026, making it Asia’s worst-performing currency."
"Currently, foreign investors pay around 20% tax on bond interest, up from 5% before 2023, and hold just 3% of the $1.3tn bond market. The tax cut is expected to support funding a larger import bill amid rising oil prices and help India achieve its development goals by 2047."
"India’s wholesale price index (WPI) inflation for April 2026 rose sharply to 8.3% y/y (from 3.88% in March 2026), driven mainly by higher prices for mineral oils, crude petroleum and natural gas, basic metals and other manufacturing."
"India has asked the U.S. to extend its waiver on Russian oil imports beyond May 16, amid ongoing disruptions in energy supply caused by the nearly 11-week war in the Persian Gulf."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
MUFG’s Lee Hardman notes that rising long-term JGB yields, driven by inflation risks linked to the Middle East conflict and hawkish BoJ commentary, are reinforcing expectations for a near-term policy rate increase. He highlights that a potential BoJ hike as early as June could support the Japanese Yen and reduce pressure for further FX intervention.
Rising JGB yields bolster yen outlook
"The ongoing move higher in yields in Japan has attracted more market attention overnight as well after the 30-year JGB yield rose above the high from 20th January and hit a fresh high of 3.93%."
"The recent sell-off appears to have been driven more by building inflation risks related to the Middle East conflict."
"The sell-off overnight has been encouraged by hawkish comments from BoJ board member Kazuyuki Masu who indicated that he is moving closer to voting for a rate hike."
"He stated “if statistical data do not indicate clear signs of an economic downturn, I believe it is desirable to raise the policy rate at the earliest stage possible”."
"His comments have reinforced market expectations for the next BoJ hike to be delivered as soon as the next policy meeting in June."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- USD/CHF holds above 0.7800 after bouncing from 0.7760 lows.
- Investors are waiting for the outcome of the Trump-Xi meeting in Beijing.
- The technical picture shows a falling wedge formation, hinting at a bullish outcome.
The US Dollar (USD) is trading flat, right above 0.7800 against the Swiss Franc on Thursday as investors bid their time awaiting the outcome of US President Trump’s visit to China. The pair, however, shows a growing bullish momentum, as safe-haven flows amid the stalemate in Iran and higher US Treasury yields are underpinning speculative demand for the Greenback.
Trump affirmed that it has been a fantastic day, with positive and productive meetings, and that the topics discussed in a two-hour talk with Chinese President Xi Jinping are good for China and the US. Jinping said that ties between both countries are stable and that he had an in-depth exchange of views with Trump today.
On the macroeconomic front, the Swiss calendar is thin this week, but US inflation figures released earlier revealed that the impact of the energy shock has been stronger-than-expected in April. These releases have boosted expectations that the Federal Reserve (Fed) will be forced to hike rates in the second half of the year, which is pushing US Treasury yields and the US Dollar higher.
Technical Analysis: A falling wedge pattern hints at a bullish outcome
The 4-hour chart shows the USD/CHF pair trading within a falling wedge formation, a figure that often anticipates a bullish outcome. The bullish divergence in the RSI and the stronger momentum indicators are also pointing that way.
The Relative Strength Index (RSI) is hovering around 56, and the Moving Average Convergence Divergence (MACD) lines are slightly positive, although these indicators are showing a stabilizing downside pressure rather than a sustained upwards reversal.
Bulls should break above the confluence of the May 4 high and the top of the falling wedge, at the 0.7845 area, to confirm a bullish reversal, and shift focus towards April 12 and 30 highs, around 0.7930. On the downside, immediate support emerges at the May 8 low of 0.7760, and the bottom of the wedge, now around 0.7740, which are likely to test bears ahead of early March lows, near 0.7670.
(The technical analysis of this story was written with the help of an AI tool.)
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.37% | 0.33% | 0.82% | 0.28% | -0.27% | 0.10% | 0.50% | |
| EUR | -0.37% | -0.05% | 0.50% | -0.11% | -0.65% | -0.31% | 0.12% | |
| GBP | -0.33% | 0.05% | 0.04% | -0.05% | -0.62% | -0.25% | 0.17% | |
| JPY | -0.82% | -0.50% | -0.04% | -0.61% | -1.10% | -0.73% | -0.29% | |
| CAD | -0.28% | 0.11% | 0.05% | 0.61% | -0.44% | -0.11% | 0.22% | |
| AUD | 0.27% | 0.65% | 0.62% | 1.10% | 0.44% | 0.38% | 0.78% | |
| NZD | -0.10% | 0.31% | 0.25% | 0.73% | 0.11% | -0.38% | 0.40% | |
| CHF | -0.50% | -0.12% | -0.17% | 0.29% | -0.22% | -0.78% | -0.40% |
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).
- The Australian Dollar weakens against its major peers despite multiple tailwinds.
- Positive outcomes from the Trump-Xi meeting and hawkish RBA bets are expected to strengthen the antipodean.
- Traders price out dovish Fed bets amid hot US inflation.
The Australian Dollar (AUD) trades lower against its major currency peers, down 0.25% to near 0.7240 against the US Dollar (USD) during the European trading session on Thursday. The antipodean faces selling pressure even as comments from both United States (US) President Donald Trump and Chinese leader Xi Jinping indicate that trade relations between both economies will improve from hereon.
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 US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.05% | 0.08% | 0.03% | 0.10% | 0.24% | 0.07% | -0.05% | |
| EUR | -0.05% | 0.02% | -0.04% | 0.04% | 0.14% | -0.01% | -0.10% | |
| GBP | -0.08% | -0.02% | -0.06% | 0.02% | 0.14% | -0.03% | -0.09% | |
| JPY | -0.03% | 0.04% | 0.06% | 0.05% | 0.19% | 0.01% | -0.10% | |
| CAD | -0.10% | -0.04% | -0.02% | -0.05% | 0.15% | -0.05% | -0.10% | |
| AUD | -0.24% | -0.14% | -0.14% | -0.19% | -0.15% | -0.16% | -0.21% | |
| NZD | -0.07% | 0.01% | 0.03% | -0.01% | 0.05% | 0.16% | -0.07% | |
| CHF | 0.05% | 0.10% | 0.09% | 0.10% | 0.10% | 0.21% | 0.07% |
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).
Improving US-China trade relations is a favorable scenario for the Australian Dollar, given that the Australian economy relies heavily on its exports to Beijing.
Chinese leader Xi said at the state banquet in Beijing that both the US and China should become partners and not rivals. Xi added, “Rejuvenation of China and 'Make America Great Again' can go hand in hand.”
Meanwhile, US President Trump stated at the state banquet that the visit to China is “historic”, and has invited Chinese leader Xi to White House on September 24.
On the domestic front, swaps suggest the possibility of the Reserve Bank of Australia (RBA) delivering an interest rate hike in August is about 80%, Reuters reports. This would be the fourth interest rate hike by the RBA this year. The RBA has hiked its Official Cash Rate (OCR) in every policy meeting so far this year.
Meanwhile, the US Dollar trades firmly due to increased expectations that the Federal Reserve (Fed) will not cut interest rates this year. Dovish Fed bets have squeezed significantly due to accelerating inflationary pressures in the wake of higher energy prices.
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.
Societe Generale strategists note that the recent selloff in Gilts has eased after long-end yields spiked to multi-year highs on fears of looser fiscal rules under a more left-wing Labour leadership. They highlight internal Labour Party dynamics, with several senior figures leaning left on spending and borrowing but favouring closer EU ties, while identifying Wes Streeting as the most market-friendly, fiscally conservative option.
Gilts steady as Labour risks evolve
"In the UK, the selloff in Gilts abated after the spike to multi-year highs in long-end yields over concerns for a loosening of fiscal rules under a more left-wing Labour party leadership."
"Health Secretary Wes Streeting could trigger a leadership contest as early as today and with Andy Burnham not in a position to contest, Angela Rayner indicated she may run after being cleared by HMRC of deliberate wrongdoing over tax affairs."
"She said that Starmer should reflect on stepping aside and could be a stalking horse for Burnham until he secures a seat in Parliament. Rayner, Burnham and Miliband lean left with regard to spending and borrowing but are in favour of closer ties with the EU."
"Streeting is the most market-friendly option, offering continuity on the fiscal rules and is also in favour of closer alignment with the single market or customs union."
"EUR/GBP retraces below the 50dma at 0.8670 in early trading. GBP/AUD traded a new cycle low of 1.86, a level which featured as a turning point in Dec-23. This time, further downside could be on the cards."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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