Forex News

• USD/CHF wavers right above 0.7800 after dropping from 0.7920 highs on Thursday.
• Swiss Retail Sales disappointed in March, although the impact on the CHF has been minimal.
• The USD retreated across the board on Friday amid echoes of an alleged USD/JPY intervention.

The US Dollar (USD) remains practically flat against the Swiss Franc (CHF) on Friday, wavering within a few pips above 0.7800, on track for a 0.35% weekly loss after dropping from highs above 0.7900 the previous day. The softer-than-expected Swiss Retail Sales data have failed to impact the pair, while an alleged intervention by Japanese authorities to stem Yen weakness has hit the Greenback across the board.

The Swiss Federal Statistics Office revealed on Friday that retail consumption year-on-year rose 0.5% in March, slightly above the 0.4% growth seen in February, but well short of the 1% increase forecasted by market analysts. On an annual basis, total retail sales have declined 0.1%.

Apart from that, an alleged intervention by Japanese authorities, consisting of selling US Dollars to support the Japanese Yen (JPY), has sent the US Dollar lower against its main currency peers on Friday.

The Japanese Ministry of Finance is supposed to have stepped into the Forex markets on Thursday, following comments by the Finance Minister, Satsuki Katayama, warning about immediate action. The USD/JPY depreciated around 2.4% on Thursday, sending the US Dollar lower across the board and triggering a more than 1% decline in the USD/CHF.

Japanese authorities are thought to have acted again on Friday, taking advantage of the thin trading volumes due to the May 1 Labour Day holiday. The USD/JPY lost 0.8% in a few seconds during the early European session in a move that reverberated across the market.

• Australian Dollar drops against its major currency peers while focus shifts to the RBA’s monetary policy.
• The RBA is expected to hike its OCR by 25 bps to 4.35% on Tuesday.
• The Fed is expected to keep interest rates steady at their current levels during the year.

The Australian Dollar (AUD) trades lower against its major currency peers during the European trading session on Friday. The Australian currency is slightly under pressure as investors turn cautious ahead of the Reserve Bank of Australia’s (RBA) monetary policy announcement on Tuesday.

According to the April 27-30 Reuters’ poll, 30 of 33 economists have predicted that the RBA will raise its Official Cash Rate (OCR) by 25 basis points (bps) to 4.35%.

Hawkish RBA expectations are backed by accelerating Australian inflationary pressures. The data showed on Wednesday that the annualized Consumer Price Index (CPI) growth in March was 4.6%, marginally slower than estimates of 4.7%, but faster than 3.7% in February.

Investors will pay close attention to RBA Governor Michele Bullock’s press conference to get fresh cues regarding the monetary policy outlook and how far inflation could accelerate amid elevated energy prices due to the prolonged closure of the Strait of Hormuz.

During the European trade, the antipodean trade marginally lower against the US Dollar (USD) at around 0.7195, but the Aussie pair is close to its 10-day high of 0.7205 posted earlier in the day.

The US Dollar (USD) is broadly under pressure even as traders seem confident that the Federal Reserve (Fed) will hold interest rates steady at their current levels by the year-end.

In Friday’s session, investors will focus on the US ISM Manufacturing PMI data for April, which will be published at 14:00 GMT. The ISM Manufacturing PMI is expected to come in higher at 53.0 from 52.7 in February.

• Gold lacks any follow-through buying as bulls seem hesitant amid mixed fundamental cues.
• Iran tensions underpin the USD, though reviving Fed rate cut bets support the commodity.
• The technical setup further warrants caution before positioning for any meaningful upside.

Gold (XAU/USD) extends its steady intraday descent further below the $4,600 mark through the early European session on Friday and reverses a part of the previous day's move higher. The commodity seems poised to register losses for the second straight week and remains within striking distance of a one-month low, around the $4,510 area set on Wednesday. Geopolitical risks due to stalled US-Iran peace talks remain supportive of elevated Crude Oil prices, fueling inflationary concerns. This, in turn, prompted hawkish shift from major central banks, including the US Federal Reserve (Fed), which is seen as a key factor undermining the non-yielding yellow metal.

US President Donald Trump rejected an Iranian proposal to open the Strait of Hormuz and lift the blockade, while postponing nuclear issues to a later stage. Trump further said that he's going to keep Iran under a naval blockade until the regime agrees to a deal that addresses US concerns about its nuclear program. Furthermore, reports suggest that the US is considering new military strikes on Iran. This fuels worries about a further escalation of tensions between the US and Iran, which underpins the USD's reserve currency status and acts as a headwind for the Gold price.

Meanwhile, the Fed held its key policy rate unchanged at 3.50%-3.75% on Wednesday, and the decision saw the highest number of dissents since 1992, with three policymakers voting against the accommodative tone in the policy statement. Adding to this, the US macro data released on Thursday indicated that inflation accelerated in March and the continued economic resilience, reaffirming bets that the US central bank could keep rates unchanged well into next year. This limits the downside for the US Dollar (USD) and backs the case for further decline in the Gold price.

The US Bureau of Economic Analysis reported that the Personal Consumption Expenditures (PCE) Price Index rose 0.7% MoM in March, and the yearly rate accelerated to 3.5% from 2.8% in February. Moreover, the core gauge that excludes volatile food and energy prices climbed 3.2% on a yearly basis, compared to the 3% increase recorded in the previous month. Separately, the advance GDP estimate showed that the US economy expanded at an annual rate of 2.0% in the first quarter of 2026, marking a notable pickup compared to the revised 0.5% growth rate recorded in the fourth quarter of 2025.

However, the chance of at least one 25-basis-points (bps) rate cut by the Fed in 2026 jumped to over 15% from a meager 1.3% probability the previous day. This holds back the USD bulls from placing aggressive bets and could act as a tailwind for Gold. The market focus now shifts to important US macro releases scheduled at the beginning of a new month, starting with the ISM Manufacturing PMI later this Friday. Apart from this, developments surrounding the Middle East crisis should influence the USD price dynamics and provide some meaningful impetus to the precious metal.

XAU/USD 1-hour chart

Gold seems vulnerable to extend weaken further and retest $4,500

The overnight strength beyond $4,600 and the 100-hour Simple Moving Average (SMA) prompted some intraday short-covering. The subsequent move up stalled ahead of $4,650, near the 38.2% Fibonacci retracement level of the downfall from the April swing high. Meanwhile, the Relative Strength Index (RSI) at 58.33 suggests firm but not overbought momentum, while the Moving Average Convergence Divergence (MACD) indicator remains marginally negative. Momentum indicators hint that bullish attempts are tentative despite price holding over the short-term trend reference.

Hence, it will be prudent to wait for a sustained break through the 38.2% Fibo. retracement at $4,651.19, before positioning for an extension of this week's goodish rebound from the $4,500 neighborhood, or a one-month low. The 50% retracement at $4,696.20 could act as the next barrier if buyers extend the advance. On the downside, immediate support is seen at the 100-hour SMA at $4,623.78, and a break below this would expose the 23.6% Fibo. level at $4,595.49, with the broader swing low at $4,505.46 coming into view on sustained weakness.

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

• Dow Jones futures edge higher after the S&P 500 and Nasdaq 100 hit fresh record highs on Thursday.
• Wall Street’s Thursday gains were driven by strong corporate earnings and easing oil prices.
• Traders stayed cautious as Trump reaffirmed the US would maintain its naval blockade of Iranian ports.

Dow Jones futures gain 0.14%, trading near 49,900 during the European hours on Friday, ahead of the United States (US) regular opening. Meanwhile, the S&P 500 rise 0.12%, to near 7,250. However, Nasdaq 100 futures advance 0.04% to near 27,600.

US stock futures edge higher following record closes on Wall Street the previous day. The S&P 500 and Nasdaq 100 are reaching fresh record highs and posting their strongest monthly gains since 2020.

In Thursday’s US regular trading, the Dow Jones climbed 1.62%, while the S&P 500 and Nasdaq 100 rose 1.02% and 0.89%, respectively, driven by solid corporate earnings and easing oil prices. After the close, Apple posted quarterly results that exceeded expectations, further supporting sentiment in the technology sector. Traders are now focusing on more earnings reports due Friday, including Chevron, Exxon Mobil, Colgate-Palmolive, Estée Lauder, and CBOE, among others.

However, traders remain cautious amid ongoing US–Iran tensions. US President Donald Trump stated on Thursday that he would continue the naval blockade of Iranian ports, amid concerns that the strategically important Strait of Hormuz may not reopen in the near term. Trump also criticized congressional efforts aimed at restricting his war powers, including a recent Senate proposal that was rejected earlier in the day, per Bloomberg.

Iran’s Supreme Leader Mojtaba Khamenei further dimmed prospects for a deal, vowing not to give up the Islamic Republic’s nuclear or missile capabilities and signaling that Tehran would maintain control over the strait.

Here is what you need to know on Friday, May 1:

The volatile action continues in financial markets early Friday even though major European markets remain closed in observance of the Labor Day holiday. In the second half of the day, the Institute for Supply Management (ISM) will publish the US Manufacturing Purchasing Managers' Index (PMI) data for April.

Japanese Finance Minister Satsuki Katayama warned on Thursday that they were moving closer to taking a decisive action in the foreign exchange markets, as USD/JPY surged to its highest level since July above 160.70. During the European trading hours, the pair declined sharply, signalling a possible currency intervention. Citing two sources familiar with the matter, Reuters reported later in the day that Japan intervened for the first time in nearly two years to address the JPY weakness. Although there was no official confirmation, USD/JPY lost more than 2% on a daily basis on Thursday. After recovering above 157.00 in during the Asian trading hours on Friday, USD/JPY fell sharply again in the European morning and turned negative on the day below 156.50, pointing to a possible second intervention.

Iran's chief negotiator in talks with the US, Mohammad Bagher Ghalibaf, said it is "not posibble" for them to open the Strait of Hormuz because of "blatant violations of the ceasefire" by the US and Israel. Meanwhile, Iran’s President Masoud Pezeshkian called the US naval siege of Iranian ports is an "extension of military operations" and said that it is "intolerable." On the other hand, the Associated Press reported that US President Donald Trump is exploring options to end the Strait of Hormuz shutdown, while keeping the US blockade on Iranian ports in place and coordinating with allies to increase the consequences for Iran’s effort to disrupt the free movement of energy.

The European Central Bank (ECB) left its key rates unchanged following the April meeting, as anticipated. In the post-meeting press conference, ECB President Christine Lagarde acknowledged that risks to inflation are tilted to the upside and noted that policymakers debated at length an interest rate hike. Citing anonymous central bank sources, Reuters reported late Thursday that the ECB is expected to raise rates in June and opt for one more hike later in the year if Brent Oil prices held above $100 with the traffic in the Strait of Hormuz remaining disrupted. EUR/USD stays relatively quiet and trades in positive territory near 1.1750 after rising about 0.5% on Thursday.

The Bank of England (BoE) maintained its bank rate at 3.75%, as anticipated, but one member of the Monetary Policy Committee (MPC) voted in favor of a 25 basis points rate hike. BoE Governor Andrew Bailey made it clear that the current environment presents a difficult trade-off. Indeed, monetary policy cannot prevent the initial impact of higher global energy prices, but it must ensure that these shocks do not become embedded in wages and broader price-setting behaviour. GBP/USD gained nearly 1% on Thursday and continued to edge higher in the Asian session on Friday. At the time of press, the pair was trading at its highest level since mid-February near 1.3600.

The US Dollar (USD) Index fell 0.9% on Thursday, pressured by Japan's market intervention, combined with the BoE and ECB's hawkish tone. The USD Index holds steady at around 98.00 in the European morning on Friday, while US stock index futures trade marginally higher on the day.

Gold (XAU/USD) capitalized on the broad USD weakness and rose more than 1.5% on Thursday to snap a three-day losing streak. XAU/USD struggles to hold its ground early Friday and trades in negative territory below $4,600.

European Central Bank (ECB) Governing Council member and President of the Deutsche Bundesbank, Joachim Nagel, said during the European trading session on Friday that the baseline scenario already entails a more restrictive monetary policy. Nagel added, “It would be more appropriate to respond in June if the outlook does not improve markedly.”

Market reaction

No immediate impact from ECB Nagel's remarks is visible on the Euro (EUR). As of writing, EUR/USD trades marginally higher at around 1.1740 amid weakness in the US Dollar (USD).

• GBP/JPY turned negative to near 212.00 as the Japanese Yen gains on possible Japan’s intervention.
• Japan's FM Katayama warned on Thursday that they are moving closer to taking decisive action in the forex markets.
• The BoE will likely announce a forceful interest rate hike in upcoming policy meetings.

The GBP/JPY pair gives up its early gains and turns negative to near 212.00 during the European trading session on Friday. The pair faces intense selling pressure due to sudden strength in the Japanese Yen (JPY) on possible Japan’s Ministry of Finance (MoF) intervention in foreign exchange markets to counter one-sided speculative moves against the domestic currency.

There has been no official announcement of possible intervention by Japan in the European session on Friday; however, Japan's Finance Minister (FM) Satsuki Katayama said on Thursday that they are moving closer to taking decisive action in the foreign exchange markets.

A sudden spike was also seen in the Japanese currency on Thursday after Japan's FM Katayama’s remarks, which pushed the cross lower to 210.46, and later confirmed by Reuters as Japan’s first official currency action in nearly two years.

Meanwhile, market participants doubt the Yen’s current strength will long last, as higher energy prices in the wake of Middle East conflicts will widen the fiscal deficit of the nation and exert significant pressure on the currency.

Though investors have underpinned the Japanese Yen (JPY) against the Pound Sterling (GBP), the former trades higher against its other currency peers amid expectations that the Bank of England (BoE) could be forced to hike interest rates to avoid the emergence of second-round effects of higher energy prices-led inflation.

On Thursday, BoE Governor Andrew Bailey said in the press conference, “It would be a mistake to wait to see the second round effects before acting because then it would be too late.”