Forex News

• Gold price tumbles to around $5,090 in Friday’s early Asian session. 
• Iran's new supreme leader vows to keep blocking the Strait of Hormuz. 
• Rising oil prices could lead to prolonged inflation and potentially higher interest rates, weighing on the Gold price. 

Gold price (XAU/USD) faces some selling pressure near $5,090 during the early Asian session on Friday. The precious metal extends the decline amid a stronger US Dollar (USD) and higher Treasury yields. The release of the US Personal Consumption Expenditures (PCE) Price Index report for January will take center stage later on Friday. 

Iran’s new supreme leader, Mojtaba Khamenei, said that the crucial Strait of Hormuz should remain closed and that Iran will continue attacks on its Persian Gulf neighbors, per Bloomberg. US President Donald Trump called Iran "a nation of terror and hate" and said the situation is "moving along very rapidly" toward his guarantee of limited military involvement in the region.

Traders will closely monitor the developments surrounding the Middle East situation. Any signs of a prolonged war in the region could boost a traditional safe-haven asset such as Gold in the near term. 

Nonetheless, the ongoing war in the Middle East has stoked fears of inflation rising in the US, which increases the likelihood of the US Federal Reserve (Fed) keeping interest rates higher for longer. Higher rates tend to increase the relative appeal of yielding assets such as government bonds versus non-yielding precious metals like Gold.

Commerzbank analysts note that January industrial production rose 5.9% year-on-year, the strongest since mid‑2024, driven by export-oriented manufacturing and semiconductor demand. Malaysia’s status as a net crude Oil exporter and relatively stable MYR help buffer regional contagion, though they caution that imported petroleum products remain a vulnerability.

Stronger IP and crude exports aid MYR

"January industrial production was slightly firmer than expected at 5.9% yoy (Bloomberg consensus: 5.0%) vs 4.8% in December. This was the strongest reading since July 2024."

"Production is expected to hold up this year on expectations of continued strong global demand for both leading-edge and trailing-edge semiconductors, aided by investment in data centres."

"Compared to its Asian peers, MYR has been relatively stable amid the spike in oil prices."

"Malaysia is a net crude oil exporter and domestic refineries meet around 66% of refined oil demand. Nevertheless, one caveat is that Malaysia still imports petroleum products."

"MYR is unlikely to escape contagion from the weakness in regional currencies but it is likely to be less susceptible to a further rise in oil prices."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Standard Chartered economists Tommy Wu and Hunter Chan note that the Offshore Renminbi (CNH) has shown a stable performance, with the Renminbi Globalisation Index largely flat between November and January after gains in August-October. They highlight renewed appetite for Renminbi assets, relatively stable currency performance, and policy support under the 15th Five-Year Plan as drivers of a steady uptrend in global Renminbi usage.

RGI steadies with supportive policy backdrop

"The Standard Chartered Renminbi Globalisation Index (RGI), our proprietary measure of international Renminbi usage, was largely stable between November and January."

"Overall, the index has stabilised since mid-2025, after undergoing some fluctuations amid US-China tariff uncertainty."

"The ensuing trade negotiations and eventual trade truce reached in November helped stabilise market sentiment and improved confidence in the Renminbi."

"A steady rise in Dim Sum bond issuance and increased Renminbi usage for trade settlement also contributed to the RGI’s stable performance."

"We expect the RGI to register a steady uptrend this year given the widening range of Renminbi assets available and ongoing efforts by mainland China and Hong Kong authorities under the 15th Five-Year Plan (FYP) to promote the Renminbi’s global usage."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

BNY Strategist Geoff Yu notes a surprising surge in Chinese Yuan demand since the conflict began, with underhedged positions cleared and Chinese assets holding up, especially equities. He expects careful CNY management and gradual portfolio reallocation into Chinese bonds and equities to support the currency, though current foreign holdings remain small versus U.S. assets.

CNY flows improve as positioning normalizes

"One of the most surprising flow patterns we have observed since the conflict began has been a surge in CNY buying that cannot be attributed to hedge unwinding. Hedging levels in the currency are now around 30% below the rolling 1y average, suggesting that underheld positions have been removed."

"At the beginning of the year, we made the case for gradual appreciation of CNY, in addition to valuation adjustments in other high-surplus APAC currencies. In the near term, all such surpluses are at risk from energy bottlenecks, but China is less exposed than peers in North and East Asia."

"Careful official CNY management will also limit realized volatility, which will be viewed favorably in the current environment. Broader APAC appreciation to limit pass-through disinflation is possible, but excess asset positioning in the likes of South Korea and Taiwan is probably necessary first."

"Over the long term, provided greater access and capital market reform continues apace, we expect Chinese assets to attract improved allocations within diversified global portfolios. However, this need not come at the expense of U.S. assets."

"Overseas interest can pick up significantly, further supporting the CNY, but the base is too small to meaningfully affect overall U.S. portfolio allocations."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

HSBC positions Asia as a prime destination for investors diversifying away from US-heavy portfolios, citing dynamic growth, strong domestic demand and supportive technology policies. The bank emphasises AI leadership, semiconductors and e-commerce, while favouring equities in Mainland China, Hong Kong, Singapore, South Korea and Japan, and preferring Asian financials and selected Chinese and Indian bonds for income.

Regional barbell of growth and yield

"As investors look to diversify US-heavy portfolios, Asia has every reason to be second to none – offering dynamic growth drivers, robust domestic demand, favourable technology and innovation policies, as well as attractive valuations."

"The region is home to many AI and technological leaders, semiconductor manufacturers and e-commerce champions, all of which are experiencing a turbocharged growth trajectory thanks to the unwavering global AI trend and government support through policy measures and fiscal spending."

"Mainland China is at the forefront of AI competition, with innovation identified as a key growth driver in its 15th Five-Year Plan. Meanwhile, Hong Kong is witnessing a revival in M&A activity and strong southbound inflows via Stock Connect. Corporate governance reforms undertaken in Japan and South Korea are also positioning companies to increase dividend payouts and share buybacks."

"Our barbell approach balances exciting growth opportunities with compelling dividend income from high-quality companies, alongside attractive bond yields in the region."

"We’re most positive on mainland Chinese, Hong Kong, Singapore, South Korean and Japanese equities. Within investment grade credit, Asian financials, Chinese hard currency and Indian local currency bonds are preferred."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Commerzbank economists highlight that Taiwan’s February exports grew 20.6% year-on-year, marking a thirteenth straight month of double-digit gains despite holiday distortions. Electronics and AI-related shipments remain robust, though officials warn Middle East conflict could weigh on trade.

Trade stays firm

"February exports rose less than expected by 20.6% yoy (Bloomberg consensus: 35.5%) vs 69.9% in January. However, this still marked the thirteenth consecutive months of double-digit growth."

"Demand for leading-edge semiconductors remained robust amid the electronics upcycle, and AI-related exports should rebound in the coming months as Lunar New Year effects fade."

"By destination, exports to the US expanded 33.7% yoy vs 151.8% in January. Shipments to the US now account for 32% of total exports, the highest share in 36 years."

"The Department of Statistics Director-General Beatrice Tsai warned that a prolonged conflict in the Middle East could weigh on Taiwan’s export outlook. She said that disrupted shipping routes and higher fuel prices could squeeze corporate profits and dampen consumer sentiment."

"Net foreign inflows into the Taiwanese equities were positive for the first time in two weeks yesterday, at USD1.2bn."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

OCBC strategists Sim Moh Siong and Christopher Wong highlight that easing Oil prices, a softer Dollar and a firmer RMB aided partial Ringgit recovery. The outlook hinges on Middle East tensions and Oil supply disruptions, with key support at 3.9150/80 and 3.90, and resistance at 3.9550 and 3.9760 on the daily chart.

Middle East path drives MYR scenarios

"Focus remains on Iran conflict, where developments remain fluid and the outlook for MYR will largely depend on how the situation evolves. A key consideration is the duration and scale of potential oil supply disruption. If tensions in the Middle East ease and risks to shipping routes and production remain contained, the oil risk premium could unwind relatively quickly."

"In such a scenario, further recovery in risk sentiment should support MYR recovery. However, if tensions remain heightened, like how Iran is telling the world to prepare for USD200/bbl, then risk appetite may stay restrained and the MYR recovery seen in early week may stall, regardless of oil/commodity dynamics."

"Bullish momentum on daily chart is fading while RSI fell. Immediate support at 3.9150/80 levels. Decisive break below puts next support at 3.90, 3.88 levels. Resistance at 3.9550, 3.9760 (50 DMA)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

OCBC strategists Sim Moh Siong and Christopher Wong note that USD/CNH is consolidating near recent lows with fading bullish momentum, as fears of persistently high Oil prices and Iran-related risks weigh on broader sentiment despite the IEA’s reserve release. Stronger CNY fix offers some support, but broader risk tone and Dollar direction remain key, with support around 6.85–6.8270 and resistance at 6.89 and 6.9280.

RMB steadier than Oil-sensitive Asian peers

"USD/CNH consolidated near recent lows, with the decline lacking momentum overnight. Fears of oil price staying high for longer, alongside USD following threat from Iran had undermined broader sentiment despite IEA’s plan to release record 400mn barrels of oil from reserves."

"Broader risk sentiment, USD direction still matters and, in the interim, geopolitical headline dominates and drives 2-way trades. That said, on relative terms, RMB may be less vulnerable while Asian FX, including KRW, PHP sensitive to oil and sentiment shocks may be under more pressure."

"Bullish momentum on daily chart is fading but decline in RSI moderated. 2-way trades likely. Support at 6.85, 6.86 levels, 6.8270 levels (Feb low). Resistance at 6.89 (21 DMA), 6.9280 (50 DMA)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Israeli Prime Minister Benjamin Netanyahu held his first press conference on Thursday since the war with Iran started and said that they are aiming to stop Iran from moving nuclear and ballistic projects underground, and changing the Middle East.

We struck more Iranian nuclear scientists.

We're creating ideal conditions for toppling the Iranian regime.

We can create conditions for regime change, yet it is up to Iran's people to take to the streets

We are aiming to stop Iran from moving nuclear and ballistic projects underground

We are changing the Middle East and becoming a regional power and, in some areas, a global power.

We're dealing heavy blows to Iran's Revolutionary Guard and Basij forces.

Iran has a plan to destroy Israel with ballistic missiles and is attempting to develop a nuclear bomb.

Hezbollah will pay a heavy price for its aggression."