Forex News
- UK investors show renewed interest in Gold ETFs, with more than $2 billion in inflows in April
- Stable Gold prices, a less-than-expected hawkish BoE, and falling equity prices likely drove increased interest in Gold ETFs.
- Rising ETF demand tends to support spot prices, which have been hovering between $4,400 and $4,900 since late March.
Inflows returned to global Gold ETFs in April, with funds from the United Kingdom (UK) leading the surge, as the price of the precious metal stabilized after March’s sharp decline.
Global physically backed Gold ETFs recorded inflows of $6.6 billion in April, according to data from the World Gold Council (WGC). This represents a sharp rebound from March, when ETFs registered a significant sell-off. Positive flows via ETFs are a bellwether for spot prices as investor demand via ETFs tends to directly impact the physical market.
By country, the UK registered inflows of more than $2.1 billion, followed by the United States ($845 million) and Hong Kong ($732 million), the WGC report shows. In overall Europe, funds saw a large inflow of $3.7 billion in April, flipping their year-to-date total from negative to positive.
Positive flows in the UK, and broadly in Europe, appeared linked to heightened geopolitical and geoeconomic risks, as investors assessed the inflationary implications of a more protracted Iran conflict and the associated pressure on energy prices, the WGC report said.
“With local equities retreating and the Bank of England (BoE) less hawkish than expected, investor interest in Gold likely strengthened as prices recovered and stabilised,” it added.
Gold prices have traded broadly rangebound since the end of March, within a band of between $4,400 and $4,900. While geopolitics keeps the precious’ metal safe-haven appeal intact, the quick hawkish repricing of global central banks’ rate outlook is also capping gains.
April’s ETF rebound shows that Gold has somewhat regained its safe-haven appeal. While investor demand through ETFs could keep providing a solid floor for the precious metal, any significant gains would need a decline in energy prices and messages from central banks that the current plans to keep interest rates at high levels are no longer on the table.
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.
ING’s Frantisek Taborsky reports that the Czech National Bank and National Bank of Poland kept rates unchanged but signalled different risk balances. He sees limited scope for further tightening in Czech Republic and a prolonged hold in Poland with conditional tightening risks. Without a clear hawkish catalyst, he expects CEE currencies to stay broadly range‑bound near current levels.
CNB dovish, NBP more cautious
"The Czech National Bank and the National Bank of Poland both left policy rates unchanged (3.50% and 3.75%, respectively), in line with expectations, but signalled diverging risks through their communication. In the Czech Republic, Governor Ales Michl struck a relatively dovish tone, emphasising a wait-and-see approach and arguing that policy is already sufficiently tight, with the Board willing to look through near-term supply-driven inflation pressures."
"By contrast, in Poland, President Adam Glapiński highlighted rising upside risks, pointing to the phase-out of energy subsidies and returning food VAT as potential drivers of renewed inflation pressure in the second half of the year."
"Across the region, recent FX stabilisation has been supported by improved global sentiment, but without a clear hawkish catalyst, further appreciation looks constrained, leaving currencies broadly range-bound near current levels."
"From a market perspective, the contrast suggests limited scope for further tightening in the Czech Republic despite still-elevated rate expectations and waiting longer before a possible hike decision, while in Poland the discussion has shifted away from easing toward a prolonged hold, with tightening risks conditional on inflation persistence."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
TD Securities strategists Robert Both and Emma Lawrence note that weaker Canadian employment in April, including job losses and a higher unemployment rate, is unlikely to bring the Bank of Canada (BoC) closer to rate cuts. Instead, they argue the data should temper market expectations for BoC hikes in late 2026.
Weaker jobs seen tempering hike pricing
"The April jobs report surprised to the downside with 18k jobs lost (market: +10k, TD: +5k) as the unemployment rate rose by 0.2pp to 6.9%. Details were broadly dovish, with full-time workers leading the pullback alongside a mild pullback in hours worked and softer wage growth."
"Even though today's report was notably dovish, we don't think it moves the Bank of Canada any closer to cuts despite the two-sided guidance at their last meeting, but it should help to push back against market pricing for BoC hikes over the second half of 2026."
"Downside surprise in CAD employment sparked a strong rally across the curve, with rates in the front-end down 8 bps and CAN-US 10s below -90 for the first time since November. We wouldn't get too excited given the well- known volatility of the LFS series and take this report more as a reflection of hike speculation being misplaced. Continue to be long 2s, and long duration as we head into the extension."
"Still, the combination of softer data, the lower inflation backdrop, and higher oil prices will keep the BoC on hold for 2026. However, it will take a few strong downside prints for market pricing to converge with that view."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Scotiabank strategists Shaun Osborne and Eric Theoret report the Euro (EUR) is modestly higher versus the Dollar, supported by risk sentiment around the US/Iran conflict despite softer German trade data and slightly reduced ECB tightening expectations. Short-term technicals are described as bullish, with EUR/USD above key Fibonacci levels and rising RSI, opening scope for a move back toward the January high above 1.20.
Bullish structure targets January highs
"The EUR is up 0.4% vs. the USD, a mid-performer among the G10 currencies as it continues to be driven by – and recently buoyed by – broader market sentiment as it relates to the US/Iran conflict. Yield spreads have pulled back, reflecting a slight moderation in expectations for ECB tightening with June now priced at 19bpts – down about 10bpts from the hawkish peak that followed the April 30 policy meeting."
"Risk reversals are confirming the support from sentiment, as the options market continues to fade its modest premium for protection against EUR weakness with scope for continued support as premiums shift toward upside protection (as observed in late 2025/early 2026)."
"Fundamental releases have been limited to weaker German trade data, reflecting a surge in (energy) imports in March, and the EUR appears to be ignoring the prospect of renewed trade tensions following President Trump’s latest threats of tariff hikes by July 4."
"Bullish – the EUR’s recent gains are important, as we look to key technical levels drawn from the Jan-March pullback. The latest recovery has followed a test of critical support in the mid/upper-1.16s around the 38.2% Fibo retracement of the Jan/Mar decline, and tentative gains have pushed above the midpoint (1.1746) toward the 61.8% Fibo at 1.1825."
"The RSI is bullish, in the upper 50s, and we see an increasing likelihood of a full retracement and a push back to the January high above 1.20. We look to a near-term range bound between 1.1720 and 1.1820."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Explosions are reported near the Strait of Hormuz in southern Iran.
- Fox News reports that the US military struck several tankers accused of trying to break a blockade.
- Markets are now monitoring the risk of a broader military escalation in the region.
Geopolitical tensions intensified on Friday after reports from the US and Iranian media regarding military operations around the Strait of Hormuz. According to a Fox News reporter on X, the US military carried out new airstrikes targeting several empty tankers attempting to break a blockade in the region.
At the same time, Iran’s Mehr news agency reported that an explosion was heard in the port city of Sirik, located near the Strait of Hormuz, although no official explanation has been provided so far.
Investors remain focused on potential official statements from Washington or Tehran to assess the risk of a wider escalation in the region.
Market reaction
West Texas Intermediate (WTI) Crude Oil remains under pressure, falling 2.83% on Friday, trading at $91.90 at the time of writing.
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.
Commerzbank’s Barbara Lambrecht reports that China’s central bank (PBoC) used a temporary Gold price dip in April to extend its buying streak to 18 months, with the largest addition since December 2024. Central banks and public institutions bought nearly 245 tons in Q1, slightly above the five‑year average, with Poland and Uzbekistan leading purchases.
Persistent official sector accumulation trend
"China's central bank took advantage of the temporary dip in gold prices and increased its reserves in April for the 18th consecutive month. At 8.1 tons, these were the largest purchases since December 2024."
"Central bank purchases have been among the key drivers of gold demand for over four years. Despite the significant rise in prices, purchases by central banks and other public institutions in the first quarter totaled nearly 245 tons, according to the WGC, which was 3% higher than the previous year and even slightly above the five-year average."
"The Polish and Uzbek central banks were the biggest buyers (31 tons and 25 tons, respectively); only 7 tons were attributable to China’s central bank during this period. That figure is likely to rise this quarter."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
The United States (US) created 115K new jobs in April, much better than the 62K anticipated by markets. The unemployment rate in the same month was confirmed at 4.3%, as expected. The Nonfarm Payrolls (NFP) report came in better than anticipated, yet the US Dollar (USD) eased with the news. Why is this happening?
A resilient US labor market isn't enough to push the Dollar up
The April NFP report also showed that the Labor Force Participation Rate ticked lower to 61.8% from 61.9%. Finally, annual wage inflation, as measured by the change in the Average Hourly Earnings, rose to 3.6% from 3.4% in March but came in below analysts' estimate of 3.8%, bringing some relief.
The USD slide seems more related to persistent confidence around a deal between Iran and the US. Wall Street runs higher on coupled war optimism and upbeat US data, ultimately weighing on the Greenback. Washington and Tehran continue to trade fire in the Strait of Hormuz, with skirmishes present throughout the week despite claims the ceasefire remains in place.
At the time of writing, the US Dollar Index (DXY) is down to 97.90, not far from a multi-week low posted on Wednesday at 97.62.
- US job creation beats expectations by a wide margin in April, but the US Dollar remains under pressure.
- Intervention threats from Japanese authorities continue to limit Japanese Yen selling.
- Geopolitical tensions in the Middle East continue to sustain some safe-haven demand.
USD/JPY edges lower on Friday and trades around 156.65 at the time of writing, down 0.17% on the day, despite the release of a stronger-than-expected US employment report. Markets remain cautious due to the risk of further intervention from Japanese authorities, preventing the pair from gaining traction above the psychological 157.00 level.
Data released by the Bureau of Labor Statistics (BLS) showed that Nonfarm Payrolls (NFP) in the United States (US) increased by 115K in April, well above the market consensus of 62K. March’s figure was also revised higher to 185K from the previously reported 178K. The Unemployment Rate remained unchanged at 4.3%, in line with market expectations.
However, Average Hourly Earnings rose by 3.6% YoY, below the 3.8% forecast, limiting support for the US Dollar. The US Dollar Index (USD) remains under pressure, losing 0.38% on the day to 97.90.
The Japanese Yen (JPY) also continues to benefit from persistent intervention risks from Tokyo. Japan’s top currency diplomat, Atsushi Mimura, reiterated on Thursday that authorities face “no limits” regarding the frequency of interventions aimed at supporting the Japanese currency. He also stated that he remains in daily contact with US authorities to curb speculative moves in the Japanese Yen.
Markets remain focused on the large-scale interventions reportedly conducted by Japan’s Ministry of Finance since late April. According to Reuters, Japan may have spent more than 5 trillion JPY during its first intervention after USD/JPY crossed above the 160.00 threshold.
MUFG nevertheless believes that these operations could have a limited long-term impact without a more aggressive shift in Bank of Japan (BoJ) monetary policy. The bank noted that recent Japanese wage growth and inflation data remain relatively weak, which could reinforce the BoJ’s cautious stance despite persistent expectations of a rate hike in June.
On the geopolitical front, tensions between the United States and Iran in the Strait of Hormuz are also supporting safe-haven demand. US President Donald Trump nevertheless stated that the ceasefire remains in place, while Iranian authorities continue to review a US proposal aimed at ending the conflict.
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 Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.44% | -0.48% | -0.25% | 0.17% | -0.47% | -0.44% | -0.43% | |
| EUR | 0.44% | -0.06% | 0.20% | 0.60% | -0.04% | 0.04% | 0.03% | |
| GBP | 0.48% | 0.06% | 0.28% | 0.66% | 0.02% | 0.09% | 0.08% | |
| JPY | 0.25% | -0.20% | -0.28% | 0.41% | -0.25% | -0.19% | -0.19% | |
| CAD | -0.17% | -0.60% | -0.66% | -0.41% | -0.67% | -0.60% | -0.59% | |
| AUD | 0.47% | 0.04% | -0.02% | 0.25% | 0.67% | 0.07% | 0.07% | |
| NZD | 0.44% | -0.04% | -0.09% | 0.19% | 0.60% | -0.07% | -0.01% | |
| CHF | 0.43% | -0.03% | -0.08% | 0.19% | 0.59% | -0.07% | 0.00% |
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).
- GBP/JPY edges higher on Friday as the Japanese Yen remains on the defensive amid ongoing energy shocks in the Middle East.
- The British Pound holds firm while traders assess the political fallout from UK local elections.
- Technically, the pair maintains a constructive outlook above the 100-day and 200-day SMAs.
GBP/JPY edges higher on Friday as the Japanese Yen (JPY) continues to face selling pressure despite suspected intervention by Japanese authorities earlier this week. At the time of writing, the cross is trading around 213.31, up nearly 0.30% on the day after reversing part of the losses registered earlier this week.
The Japanese Yen is struggling to gain traction amid elevated Oil prices and ongoing supply disruptions through the Strait of Hormuz. A significant portion of Japan’s energy imports comes from the Middle East, leaving the economy particularly vulnerable to rising import costs and slower economic growth.
Meanwhile, the British Pound (GBP) is holding firm across the board as investors assess the political landscape following the UK local elections, where Prime Minister Keir Starmer’s Labour Party reportedly suffered notable losses.
That said, GBP/JPY’s broader uptrend remains intact due to the wide interest rate differential between the Bank of England (BoE) and the Bank of Japan (BoJ). With ongoing energy shocks raising inflation risks, this divergence could widen further as expectations grow that central banks may need to raise interest rates to contain inflationary pressure.
Technical Analysis:
On the daily chart, GBP/JPY holds a constructive bias as it remains above both the 100-day Simple Moving Average (SMA) at 212.11 and the longer-term 200-day SMA at 207.12. Price is consolidating just under the nearby horizontal barrier at 214.50, suggesting the broader uptrend is intact but facing topside friction, while a soft Relative Strength Index (RSI) near 47 and a negative Moving Average Convergence Divergence (MACD) reading hint at waning bullish momentum in the very near term.
On the topside, immediate resistance is located at 214.50, and a clear daily close above this level would reopen the path to further gains. On the downside, initial support is seen at the 100-day SMA at 212.11, followed by the horizontal floor at 210.00, with the 200-day SMA at 207.12 reinforcing a deeper medium-term demand zone if the pullback extends.
(The technical analysis of this story was written with the help of an AI tool.)
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