Forex News
Bank of England (BoE) Deputy Governor for Financial Stability Sarah Breeden stated at a panel discussion during European trading hours on Thursday that the monetary policy should remain steady until the United Kingdom (UK) central bank has sufficient information.
Remarks
Where we are now is very different to last energy shock in 2022.
Firms and workers are likely to have less price and wage bargaining power, so second round effects less likely.
Not wise to act before we have sufficient information.
Will know more on balance of risks and scale and duration of shock by April meeting.
Even with higher borrowing costs, do not expect a bust in borrowing as no boom before.
Market reaction
No immediate reaction on the Pound Sterling (GBP) is observed after BoE Breeden's comments. As of writing, GBP/USD trades marginally lower around 1.3355
BoE FAQs
The Bank of England (BoE) decides monetary policy for the United Kingdom. Its primary goal is to achieve ‘price stability’, or a steady inflation rate of 2%. Its tool for achieving this is via the adjustment of base lending rates. The BoE sets the rate at which it lends to commercial banks and banks lend to each other, determining the level of interest rates in the economy overall. This also impacts the value of the Pound Sterling (GBP).
When inflation is above the Bank of England’s target it responds by raising interest rates, making it more expensive for people and businesses to access credit. This is positive for the Pound Sterling because higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls below target, it is a sign economic growth is slowing, and the BoE will consider lowering interest rates to cheapen credit in the hope businesses will borrow to invest in growth-generating projects – a negative for the Pound Sterling.
In extreme situations, the Bank of England can enact a policy called Quantitative Easing (QE). QE is the process by which the BoE substantially increases the flow of credit in a stuck financial system. QE is a last resort policy when lowering interest rates will not achieve the necessary result. The process of QE involves the BoE printing money to buy assets – usually government or AAA-rated corporate bonds – from banks and other financial institutions. QE usually results in a weaker Pound Sterling.
Quantitative tightening (QT) is the reverse of QE, enacted when the economy is strengthening and inflation starts rising. Whilst in QE the Bank of England (BoE) purchases government and corporate bonds from financial institutions to encourage them to lend; in QT, the BoE stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive for the Pound Sterling.
- WTI Oil holds gains around $92 in a tense geopolitical environment.
- Escalation risks in the Middle East sustain the energy market risk premium.
- A firm US Dollar is nevertheless capping further upside in Crude.
West Texas Intermediate (WTI) US Oil trades around $92.05 on Thursday at the time of writing, up 1.73% on the day, extending its positive bias despite a lack of strong bullish conviction.
Oil prices remain supported by ongoing uncertainty in the Middle East. Iran said it is reviewing a US proposal to end the conflict, while ruling out direct negotiations for now, maintaining uncertainty around a potential de-escalation. At the same time, the deployment of additional US troops in the region fuels concerns over a broader escalation.
In this context, Iranian energy infrastructure remains under pressure, while the effective closure of the Strait of Hormuz continues to disrupt supply flows. This situation keeps a high geopolitical risk premium in place, acting as a structural support for Oil prices.
However, investors remain cautious and reluctant to place aggressive bets, awaiting clearer developments on the geopolitical front. This explains the recent consolidation in prices despite a fundamentally supportive backdrop.
Meanwhile, the strength of the US Dollar limits further upside in Crude Oil. Expectations that rising energy prices could reignite inflationary pressures lead markets to consider a more restrictive stance from the Federal Reserve (Fed). A stronger Greenback tends to weigh on demand for USD-denominated commodities, thereby capping Oil’s advance.
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.
- The US Dollar approaches the 160.00 level against the Japanese Yen as hopes of a peace deal in the US-Iran war fade.
- Iran has rejected the US peace plan and denied any negotiation with the US.
- The increase in Oil prices might add pressure to Japan's fiscal stability, OCBC Analysts say.
The US Dollar (USD) maintains an immediate bullish tone against the Japanese Yen (JPY) on Thursday, extending its rebound from Monday’s lows at 158.00 to levels above 159.50 so far. Winding hopes of a price deal in the Middle East have hurt risk appetite, boosting the safe-haven US Dollar against its main peers on Thursday.
Iran has rejected the 15-point peace plan presented by the US, and its Foreign Minister, Abbas Araghchi, said in an Iranian English-language broadcasting TV that the Iranian government rejects any negotiations with the US while the bombings continue.
Meanwhile, Israel and Iran have continued exchanging attacks while the Strait of Hormuz remains closed for the fourth week. The sour market sentiment is boosting the US Dollar across the board.
Rising Oil prices threaten Japan's economic growth
Analysts from the OCBC Bank affirm that rising Crude prices are hitting Japan, amid worsening terms of trade, bringing the country’s strained fiscal stability back to the focus. The experts affirm that Japan´s large dependence on Middle Eastern energy imports makes the currency sensitive to the consequences of the US-Iran conflict, which might be offsetting the Japanese Yen’s traditional safe-haven status.
On Wednesday, the minutes of the last monetary policy meeting by the Bank of Japan (BoJ) revealed that policymakers debated the need for further monetary policy tightening amid the rising inflationary pressures, but failed to provide any significant support to the Yen.
In the US economic docket on Thursday, last week´s Initial Jobless Claims and an array of Federal Reserve speakers will be the main focus, although the main market driver is likely to remain the geopolitical scenario, and news coming from the war in Iran .
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
- Gold price faces selling pressure as Iran’s disagreement with Trump’s ceasefire plan revives Middle East risks.
- Iran’s Araghchi said that Tehran doesn’t intend to negotiate with the US.
- Tehran wants the US to shut down its bases in the Middle East and allow for pursuing the missile program.
Gold price (XAU/USD) is down 2% to near $4,410 during the European trading session on Thursday.
The precious metal has come under pressure after a strong recovery in the last three trading days, as fears of persistent war in the Middle East have revived, following Iran’s rejection to United States (US) President Donald Trump’s month-long ceasefire proposal and 15-point settlement plan.
Theoretically, heightened geopolitical tensions boost demand for safe-haven assets, such as Gold.
However, the precious metal faces backlash amid fears that persistent Middle East conflicts would keep oil prices higher, which already have prompted inflation expectations, a scenario that restricts global central banks from easing monetary conditions and diminishes the demand for non-yielding assets, such as Gold.
Iran’s foreign minister Abbas Araghchi said on Wednesday that the country is reviewing a US proposal to end the war in the Gulf but has no intention of holding talks to end the widening Middle East conflict, per Reuters.
Also, a senior Iranian official told Al Jazeera that the proposal is “extremely maximalist and unreasonable”.
In the 15-point proposal, the US demanded Iran’s restriction to building nuclear weapons, and no uranium enrichment on Iranian territory.
Meanwhile, Iran has also put forward conditions for ending the war, which include the closure of all US bases in the Gulf, compensation for attacks on Tehran's infrastructure, lifting all sanctions, and allowing Iran to retain its missile program without restrictions.
Gold technical analysis
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XAU/USD trades lower to near $4,410 as of writing. The near-term bias is mildly bearish as price slides away from recent highs while remaining slightly above the rising 200-day Exponential Moving Average (EMA) near $4,223, which still anchors a broader uptrend.
The 14-day Relative Strength Index (RSI) oscillates inside the 20.00-40.00 zone, signaling persistent selling pressure.
Initial support emerges at the $4,400 area, with a daily close below exposing deeper weakness toward the 200-day EMA at $4,223 and then the March 23 low around $4,100.
On the upside, the March 25 high of $4,602.48 marks the first meaningful resistance, followed by the February 17 low of $4,842.06, which was the prior support level. A decisive break above the latter would ease the immediate bearish tone and reopen the path toward the $5,000 region.
(The technical analysis of this story was written with the help of an AI tool.)
(This story was corrected at 11:30 GMT to say in the second paragraph that it is a scenario that restricts global central banks from easing monetary conditions and diminishes the demand for non-yielding assets, not improves the demand for Gold.)
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.
- The Euro hovers just above 1.1550, weighed down by a risk-averse sentiment.
- Hawkish comments by ECB speakers and soft German data are casting doubt about the Eurozone's economic outlook.
- EUR/USD recovery from mid-March lows near 1.1400 is showing signs of exhaustion.
The Euro (EUR) remains practically flat against the US Dollar (USD) at the time of writing on Thursday, consolidating losses from the previous two days. Iran’s rejection of the US peace plan proposal has shattered the mild hopes of a peace deal in the Middle East, hurting investors' appetite for risk and providing additional support for the safe-haven USD.
Iran has rejected the 15-point plan presented by the US to end the war in the Middle East and denied any negotiations while the country remains under attack. The US has threatened to “hit harder”, while US and Israeli planes have continued attacking. Tehran has responded by launching missiles and drones targeting central and northern Israel, and the Strait of Hormuz remains closed for the fourth week, strangling the global economy and hammering market sentiment.
In the monetary policy domain, European Central Bank (ECB) committee member Joachim Nagel affirmed that a rate hike will be an option at April’s meeting, in line with President Christine Lagarde’s comments on Wednesday, who stated that the central bank is ready for monetary policy adjustments if inflation proves stronger. On the macroeconomic front, the German GfK Consumer Confidence Survey projected a sharp decline, to -28 in April, its worst reading in over two years, from -24.8 in March.
Technical Analysis: Euro recovery might have hit a top
EUR/USD trades at 1.1560 as of writing on Thursday. The pair remains within a bullish channel from mid-March lows, but the double top around 1.1635 and the evening star candle pattern in the daily chart suggest that bulls might have lost faith.
Technical indicators are also pointing lower on the 4-hour chart. The Moving Average Convergence Divergence (MACD) histogram has turned more negative, with the MACD line trading below the signal, suggesting bearish momentum. The Relative Strength Index (RSI) has retreated toward the mid-40s, reinforcing a loss of upside conviction and pointing to risk of further downside while below the recent 1.1610 zone.
Initial resistance emerges at the mentioned 1.1635 area (March 23, 25 highs) ahead of the March 10 high near 1.1670. On the downside, the 1.1550 area is holding bulls on Thursday, ahead of the channel bottom, now around 1.1535, and the March 23 low, at 1.1484.
(The technical analysis of this story was written with the help of an AI tool.)
ECB FAQs
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
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 European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
UOB economist analysts Quek Ser Leang Lee and Sue Ann highlight that EUR/USD failed to sustain recent gains, slipping to 1.1554 as downside momentum picked up. Intraday, they see scope for a further drift toward 1.1530 while keeping 1.1480 intact as major support. Over the next one to three weeks, they expect range trading between 1.1480 and 1.1640, with medium‑term risks skewed toward a test of 1.1390.
Euro softens as downside momentum builds
"24-HOUR VIEW: Downward momentum has increased, albeit not significantly. Today, EUR could continue to edge lower to 1.1530 before a recovery can be expected. We do not expect the major support at 1.1480 to come under threat. Resistance levels are at 1.1580 and 1.1600."
"1-3 WEEKS VIEW: Yesterday, EUR dipped to 1.1554. Although our ‘strong support’ level at 1.1540 has not been breached yet, the build-up in momentum has largely faded. The current price movements are likely part of a range-trading phase. For the time being, we expect EUR to trade between 1.1480 and 1.1640."
"1-3 MONTHS VIEW: Emerging reversal signs suggest that EUR/USD could break the 55-week EMA (now at 1.1500) and test 1.1390. (dated 06 Mar 2026, 1.1610)"
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Danske Research Team notes that Riksbank Minutes show a divided board on handling supply shocks, with Seim and Thedéen favouring frontloaded rate hikes, while Jansson, Bunge and Hjelm prefer a gradual, wait-and-see stance. Hjelm argues for looking through supply shocks and warns, like Jansson, against overreacting. Danske Bank concludes the Riksbank stands ready to act in May if conflict-related disruptions persist, as money markets trimmed 5–6 basis points from the 2026 curve.
Riksbank split on policy response
"In Sweden, the Riksbank Minutes revealed a board slightly divided on how to deal with supply shocks."
"Seim and Thedéen are open to frontloaded rate hikes, whereas Jansson, Bunge, and the newest member, Hjelm promote a gradual, wait-and-see approach."
"Hjelm prefers to see through the supply shocks, even in an adverse scenario. Like Jansson, Hjelm warns against overreacting, emphasising the risks of a policy U-turn."
"Our conclusion is that the Riksbank will show high readiness to act in May if the conflict persists and continues to impact intermediate goods."
"The money market shaved off 5-6 basis points from the 2026 curve."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Rabobank’s Senior FX Strategist Jane Foley notes that despite the Reserve Bank of Australia being the only G10 central bank to hike rates last week, the Australian Dollar has underperformed recently versus peers. She links this to prior outperformance and shifting G10 rate expectations. Foley's energy assumptions support a forecast for AUD/USD to revisit 0.71 in coming months and 0.72 in twelve months.
AUD resilience versus global risk backdrop
"Of the eight G10 central banks that announced policy decisions last week, the RBA was the only one to hike rates. Even so, the AUD has not performed particularly well vs. a basket of its peers on a month-to-date, 5-day or 1-day view. Some of this lacklustre performance vs. the rest of the G10 can be explained by the fact that the AUD is still the best performing G10 currency in the year to date."
"Going forward, a worsening in risk appetite on war-related news may still result in another broad-based surge in the value of the USD linked to safe-haven flows which would weigh on AUD/USD. The current assumption of our energy strategists is that a full closure of the Strait of Hormuz may last until the end of April and that shipping will then slowly return. We assume that crude oil and refined product flows are likely to be around 80% of pre-war levels by August."
"While shortages of refined petroleum products carry both inflation and growth risks, Australia’s position as a net energy exporter should offer some protection to its terms and trade during this crisis which by implication should offer some support to the AUD."
"On this basis we remain of the view that AUD/USD will return to the 0.71 area on a 3-to-6-month view and we retain our 12-month target of 0.72."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Silver prices (XAG/USD) fell on Thursday, according to FXStreet data.
Silver trades at $68.17 per troy ounce, down 4.33% from the $71.25 it cost on Wednesday.
Silver prices have decreased by 4.10% since the beginning of the year.
Unit measure | Silver Price Today in USD |
|---|---|
Troy Ounce | 68.17 |
1 Gram | 2.19 |
The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 64.98 on Thursday, up from 63.25 on Wednesday.
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.
(An automation tool was used in creating this post.)
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