Forex News
- WTI price climbs to $74.50 in Wednesday’s early Asian session, up 3.20% on the day.
- A prolonged closure of the Strait of Hormuz could raise concerns about supply disruptions, potentially boosting the WTI price.
- The API reported a 5.6 million barrel build last week.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $74.50 during the early Asian trading hours on Wednesday. The WTI jumps to its highest since June 2025 as a widening conflict between the US, Israel, and Iran severely disrupts global energy supplies.
Israeli and US forces pounded targets across Iran on Tuesday, prompting Iranian retaliatory strikes around the Gulf as the conflict spread to Lebanon. A commander in Iran’s Revolutionary Guard Corps (IRGC) said that the Strait of Hormuz is closed and Iran will fire on any ship trying to pass.
US President Donald Trump said late Tuesday that the US navy will offer insurance to ships in the Gulf after Iran largely succeeded in shutting down the Strait of Hormuz. Trump added that the US military will accompany ships through the Strait of Hormuz if necessary. The risk of an oil supply disruption in the Middle East could boost the WTI price in the near term.
According to the American Petroleum Institute (API) weekly report, crude oil stockpiles in the US for the week ending February 27 climbed by 5.6 million barrels, compared to a rise of 11.4 million barrels in the previous week. The market consensus was for 2.19 million barrels.
Traders brace for the release of the Energy Information Administration (EIA) report, which will be released later on Wednesday. A larger-than-expected crude oil inventory draw indicates stronger demand and could lift the WTI price, while a bigger build than estimated signals weaker demand or excess supply, which might weigh on the WTI price.
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.
Australia’s Gross Domestic Product (GDP) rose 0.8% QoQ in the fourth quarter (Q4) of 2025 compared with the 0.4% growth in the third quarter, the Australian Bureau of Statistics (ABS) showed on Wednesday. This reading came in stronger than the expectations of 0.6% expansion.
The annual fourth-quarter GDP grew by 2.6%, compared with the 2.1% growth in Q3, while above the consensus of a 2.2% increase.
Additional takeaways from the Australian GDP data
In nominal terms, GDP rose 1.8%.
The terms of trade rose 0.4%.
Household saving to income ratio rose to 6.9% from 6.1%.
Market reaction to Australia’s GDP data
The upbeat Australia GDP report fails to boost the Australian Dollar (AUD). The AUD/USD pair is trading at 0.7021, losing 0.31% on the day.
GDP FAQs
A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022. Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted.
A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency. When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate.
When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.
US President Donald Trump said the country's navy will offer insurance to ships in the Gulf after Iran largely succeeded in shutting down the Strait of Hormuz, BBC reported on Tuesday. Trump added that the US military will accompany ships through Hormuz if necessary.
His remarks came after an Iranian official on Monday threatened to "set fire" to any ship trying to pass through the Strait of Hormuz, and the Iranian military has reportedly fired on several vessels in the area.
Market reaction
At the time of writing, the Gold price (XAU/USD) is trading 0.24% lower on the day to trade at $5,100. Meanwhile, the West Texas Intermediate (WTI) is up 3.22% on the day at $73.60.
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 tumbles to around $5,100 in Wednesday’s early Asian session.
- Inflation concerns intensified amid fears of a potentially prolonged Middle East conflict.
- Persistent geopolitical risks might help limit the Gold’s losses.
Gold price (XAU/USD) faces some selling pressure near $5,100 during the early Asian session on Wednesday. The precious metal falls amid a renewed US Dollar (USD) demand and dimming prospects for US rate cuts. The US ISM Services Purchasing Managers Index (PMI) report will be published later on Wednesday.
Inflation concerns are resurfacing as oil prices rise, leading markets to reduce the likelihood of a Federal Reserve (Fed) interest rate cut. The Greenback climbed to a three-month high, making USD-denominated gold more expensive for international buyers. Markets largely expect the US central bank to leave the interest rate unchanged until the summer, though US President Donald Trump has pushed for lower rates.
“The move lower in gold appears to be driven by a flight to liquidity - a flight to cash. We have a strong dollar and bond yields trading higher,” said Bob Haberkorn, senior market strategist at RJO Futures.
Nonetheless, the potential downside for the yellow metal might be short-lived, and flight to safety flows are driven by geopolitical risk. US Secretary of State Marco Rubio said all personnel are accounted for after a drone hit the grounds of the US consulate in Dubai, per CNN. The US earlier closed embassies in Saudi Arabia, Kuwait, and Lebanon and warned Americans to leave some countries in the region. Meanwhile, the Israeli army conducts a fresh land invasion into Lebanon's south to destroy Hezbollah and escalates airstrikes on the country.
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.
- Pound Sterling drops toward 1.3350 as Labour's by-election loss and the Middle East conflict cloud the outlook ahead of the BoE's March 19 decision.
- The BoE held rates at 3.75% in a narrow 5-4 vote in February, with Governor Bailey calling the March decision "a genuinely open question" while flagging that services inflation at 4.4% has not eased as much as expected.
- Labour's loss in the Gorton and Denton by-election has fueled uncertainty over PM Starmer's leadership, while the Iran conflict and surging oil prices are prompting markets to scale back BoE rate cut bets on inflation concerns.
GBP/USD fell about 0.35% on Tuesday, settling around 1.3350 after slipping below the 200-day Exponential Moving Average (EMA) for the first time since early December. The pair has pulled back sharply from its late-January high near 1.3870, shedding over 500 pips in a series of lower highs and lower lows. A cluster of mixed candles over the past two weeks had pointed to indecision, but the latest move lower suggests sellers are regaining control.
The Bank of England (BoE) held rates at 3.75% in February by a narrow 5-4 vote, with Governor Andrew Bailey casting the deciding vote to hold. Testifying before parliament's Treasury Committee, Bailey said a March rate cut is "a genuinely open question," noting that services inflation came in at 4.4% in January, well above the BoE's forecast. Chief Economist Huw Pill echoed the caution, warning against cutting too quickly. However, the escalating conflict in the Middle East has added a new dimension; surging oil prices threaten to push UK inflation higher, and markets have begun to scale back expectations for a March cut. UK government bond yields rose sharply on Monday as traders repriced the rate path. Adding to the pressure on Pound Sterling, Labour's loss in the Gorton and Denton by-election has renewed questions about PM Starmer's leadership and Chancellor Reeves's fiscal plans, with investors wary that political instability could lead to a looser spending stance.
On the US Dollar side, the Federal Reserve (Fed) held rates at 3.50% to 3.75% in January, with the minutes showing several participants discussed raising rates if inflation stays above target. The safe-haven Dollar has strengthened on the back of the Iran crisis, adding to headwinds for the pair.
GBP/USD daily chart
Technical Analysis
In the daily chart, GBP/USD trades at 1.3355. The near-term bias is mildly bearish as spot has slipped below the 50-day exponential moving average around 1.3510 and is now testing the 200-day EMA near 1.3375 from above. This loss of support from the shorter average signals fading upside momentum, while the longer average acts as last-line trend support. The Stochastic oscillator has recovered from oversold territory but holds in the mid-20s, indicating weak buying pressure and keeping the risk tilted to the downside while below the broken 50-day average.
Immediate resistance emerges at the 1.3400–1.3425 area, where recent closing prices clustered ahead of the 200-day EMA, followed by stronger resistance at the 1.3510 zone defined by the 50-day EMA. A daily close above 1.3510 would be required to neutralize the current downside bias and reopen the 1.36 region. On the downside, the 1.3300 handle is the first support beneath the 200-day EMA, with a break lower exposing the late swing low near 1.3200 as the next bearish target. As long as price holds below 1.3510 and momentum remains subdued, rallies are likely to face selling interest into nearby resistance.
(The technical analysis of this story was written with the help of an AI tool.)
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
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