Forex News
- EUR/GBP trades without a clear direction as markets adopt a wait-and-see stance ahead of key central bank decisions.
- The European Central Bank is expected to hold rates, although tightening expectations persist
- The Bank of England is also likely to remain on hold, with UK employment data in focus.
EUR/GBP trades around 0.8640 on Tuesday at the time of writing, virtually unchanged for the day, as investors remain on the sidelines ahead of the European Central Bank (ECB) and the Bank of England (BoE) monetary policy decisions due on Thursday.
On the European side, the ECB is widely expected to keep its deposit rate unchanged at 2%. However, money markets continue to price in the possibility of a rate hike by mid-year, with some policymakers, including Peter Kazimir, highlighting upside risks to inflation linked to geopolitical tensions.
The BoE is also expected to leave its key rate unchanged at 3.75%, amid persistent economic uncertainty. Investors anticipate a relatively hawkish tone, as inflation risks remain present, particularly in the event of renewed increases in energy prices.
Also on Thursday, ahead of these decisions, attention will turn to UK labor market data. The International Labour Organization (ILO) Unemployment Rate is expected to rise slightly to 5.3%. A lower-than-expected reading could support the Pound Sterling (GBP), while higher unemployment could reinforce expectations of future monetary easing.
On the fundamental side, the Euro (EUR) is supported by the decline in Oil prices, a positive factor for the Eurozone given its heavy reliance on energy imports. Easing supply concerns, with tankers safely crossing the Strait of Hormuz and signals of potential strategic reserve releases, are contributing to an improved economic outlook for the region.
In this context, EUR/GBP remains in a consolidation phase, with traders awaiting clearer signals from central banks before committing to a directional move.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.26% | -0.24% | -0.10% | 0.11% | -0.44% | 0.05% | -0.24% | |
| EUR | 0.26% | 0.02% | 0.16% | 0.37% | -0.19% | 0.31% | 0.02% | |
| GBP | 0.24% | -0.02% | 0.15% | 0.35% | -0.20% | 0.29% | 0.00% | |
| JPY | 0.10% | -0.16% | -0.15% | 0.21% | -0.35% | 0.15% | -0.14% | |
| CAD | -0.11% | -0.37% | -0.35% | -0.21% | -0.55% | -0.05% | -0.34% | |
| AUD | 0.44% | 0.19% | 0.20% | 0.35% | 0.55% | 0.50% | 0.20% | |
| NZD | -0.05% | -0.31% | -0.29% | -0.15% | 0.05% | -0.50% | -0.29% | |
| CHF | 0.24% | -0.02% | -0.01% | 0.14% | 0.34% | -0.20% | 0.29% |
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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
(This story was corrected on March 17 at 16:05 GMT to say that UK Unemployment Rate is expected to rise slightly to 5.3%, not remain steady at 5.2%.)
Scotiabank’s FX team highlights a modest Euro gain versus the Dollar, with EUR/USD supported after Monday’s bullish reversal. The pair is shrugging off weak German ZEW data as sentiment and elevated yield spreads underpin the Euro. Analysts flag scope for a sentiment-driven recovery as EUR/USD retraces its recent geopolitically driven decline.
Euro supported despite weak German data
"The EUR is entering Tuesday’s NA session with a fractional gain and appears well supported following Monday’s bullish reversal."
"Germany’s ZEW investor sentiment survey—a leading indicator for industrial production by about 12-18 months—came in far below expectations."
"Sentiment remains dominant as we note the absence of any meaningful reaction to the disappointing German ZEW investor sentiment data."
"The US 2Y yield is equally quiet and also looking poised for an extension of its bearish turn. The German bund may be the catalyst, with a clear reaction to the weak ZEW print that followed Friday’s hanging man doji—a textbook bearish reversal candle formation."
"Yield spreads remain elevated and offer fundamental support, as risk reversals reveal a meaningful premium for protection against EUR weakness."
"Near-term risk lies with a continued improvement in the broader market’s tone and a sentiment-led recovery in the EUR as it retraces its recent geopolitically-driven decline."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- GBP/USD is trading near 1.3350, up for a second consecutive day, as traders eye central bank decisions from both sides of the Atlantic.
- The Fed will announce its monetary policy decision on Wednesday, and is expected to keep interest rates steady.
- The BoE will release its interest rate decision on Thursday, after a fresh batch of UK Employment data.
The GBP/USD pair is trading near the 1.3350 price region on Tuesday, striking a bullish tone as investors continue to move away from the US Dollar (USD) ahead of the Federal Reserve (Fed) monetary policy decision on Wednesday.
The Fed’s policy dilemma is being tested by rising energy prices tied to the Middle East war. Higher Oil prices are potentially delaying rate cuts, as officials balance persistent inflation risks against slowing growth. The core Personal Consumption Expenditures (PCE) Price Index accelerated to 3.1% YoY in January from 3% in December, signalling stalled progress toward the 2% goal, putting interest-rate cuts in jeopardy.
The Middle East war keeps markets under tension as the Strait of Hormuz is still partially seized by Iran. The United States (US) President Donald Trump is trying to gather allies to rally against the blockade, but has not yet been successful.
In the United Kingdom (UK), the Bank of England (BoE) will also reveal its interest rate decision on Thursday, with market players expecting a hawkish hold. Earlier in the day, UK Employment data is set to be released hours before the BoE interest rate decision. The data, however, isn't likely to significantly impact the pair, as the interest rate decision will already be set.
GBP/USD short-term technical analysis:
In the 4-hour chart, GBP/USD trades at 1.3340. The near-term bias is mildly bullish as the pair stabilizes above a cluster of supports. Price holds above the 20-period Simple Moving Average (SMA) near 1.3300 but remains below the 100-period SMA around 1.3400, framing a corrective rebound within a broader softening backdrop. The Relative Strength Index (RSI) indicator has rebounded toward 54 after dipping below 50 in the European session, signaling improving upside pressure after a prior downside stretch.
Immediate support is seen at 1.3299, with a break lower exposing the next floor at 1.3273. Holding above these levels would keep buyers positioned to challenge initial resistance at 1.3360, which guards the descending 100-period SMA near 1.3400. A clear move above 1.3360 would open the way toward the 1.3400 region, while failure to defend 1.3299 would weaken the current recovery bias and refocus attention on 1.3273.
(The technical analysis of this story was written with the help of an AI tool.)
TD Securities strategists Prashant Newnaha and Alex Loo maintain a constructive stance on the Australian Dollar (AUD) despite the Reserve Bank of Australia's (RBA) close 5-4 vote. A positive terms of trade shock and increased hedging by Australian pension funds underpin AUD outperformance in G10. They see AUD/USD demand around 0.69 even if USD strength extends, while expecting AUD/CAD to correct lower on relative China versus US exposure.
AUD seen outperforming in G10 space
"Rates support may take a backseat after today's close 5-4 decision among the Board for a 25bps hike. We still retain our bias for AUD as an outperformer in the G10 space as it benefits from a positive terms of trade shock - Australia is the 3rd largest LNG producer in the world, behind Qatar and the US."
"Increased currency hedging from Australian pension funds may also anchor the AUD amidst this volatile geopolitical environment."
"If USD strength extends this week due to an escalation in the Middle East conflict, we still expect AUD/USD to find better demand around 0.69 level."
"On the crosses, we see scope for AUD/CAD to correct meaningfully lower on terms of trade impact and relative exposure to China vs US."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
ING’s Commodities Strategist Ewa Manthey highlights that recent output cuts at Alba and Qatalum tighten the Aluminium supply outlook, with Gulf disruptions now affecting a notable share of regional production. ING has revised its Aluminium scenarios to align with its latest Oil market framework, slightly tightening market balance assumptions and flagging higher probabilities of prolonged disruption if shipping issues through the Strait of Hormuz persist.
Gulf disruptions lift supply risk
"Aluminium Bahrain (Alba) has initiated a phased shutdown of reduction lines 1-3, representing around 19% of its 1.6Mt annual capacity. Meanwhile, Qatalum is currently operating at roughly 60% of capacity."
"Aluminium smelters in the Gulf rely on continuous imports of raw materials such as alumina and typically hold around three to four weeks of inventories. This limited buffer leaves production vulnerable to shipping disruptions, particularly as alumina cannot be stored for extended periods. The region produces only around 3% of global alumina and about 1% of bauxite, leaving smelters highly dependent on seaborne supply."
"With the conflict now entering its third week, a large portion of this buffer may already have been drawn down. If shipping disruptions through the Strait of Hormuz persist, additional curtailments could begin within the next one to two weeks as inventories are depleted."
"In our recent report, we highlighted how exposed aluminium markets are to disruptions in the Gulf and warned that an escalating conflict in the Middle East could push prices above $4,000/t under a severe disruption scenario. Even before the conflict, we were already constructive on aluminium prices, supported by China approaching its capacity ceiling, trade dislocations and the imminent shutdown of South 32’s Mozal already tightening supply."
"Under our base case scenario, shipping disruptions remain severe in March before gradually easing through the second quarter. In this case, current curtailments at Alba and Qatalum would remain relatively contained."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Commerzbank’s Commodity Analyst Carsten Fritsch compares current Oil disruptions from the Strait of Hormuz blockade with the 1970s oil crises, highlighting record supply shortfalls and potential demand and supply adjustments over time. He notes that OECD and Chinese emergency reserves could cover several months, but warns that a prolonged disruption would likely keep Oil prices elevated as market nervousness persists.
Strait of Hormuz crisis and supply risks
"In its latest monthly report, the International Energy Agency described the current supply shortfalls as the largest in history. According to the IEA’s assessment, crude oil production in the Gulf region has already had to be reduced by more than 8 million barrels per day due to limited export capacity. Added to this are cuts of 2 million barrels per day in condensates and natural gas liquids (NGLs)."
"Production outages in the region are estimated to amount to 7–10 million barrels per day, which represents up to 10% of global supply. Similar supply shortfalls have only occurred during the oil crises of the 1970s."
"Unlike in the 1970s, industrialised nations now have emergency reserves, established as a lesson learnt from the shock of that era. The state-controlled emergency reserves of OECD countries would cover the loss of oil supplies from the Middle East for a good three months if all alternative supply routes were exhausted."
"This means there is no immediate threat of a supply shortage. Nevertheless, should oil supplies through the Strait of Hormuz be disrupted for a prolonged period, nervousness on the oil market would continue to rise, and with it, oil prices."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- GBP/JPY range-bound near 212.00 as markets await BoE and BoJ monetary policy decisions.
- UK-Japan interest rate differential continues to support an upside bias in the cross.
- Technically, GBP/JPY holds above key moving averages, with a bearish flag in play but near-term momentum remaining positive.
The British Pound (GBP) trades broadly flat against the Japanese Yen (JPY) on Tuesday as a thin economic calendar keeps price action subdued, with attention firmly shifting to the Bank of England (BoE) and Bank of Japan (BoJ) interest rate decisions due on Thursday. At the time of writing, GBP/JPY trades around 212.15, holding close to the previous day’s high.
On the macro front, the wide interest rate differential between the UK and Japan continues to support an upside bias in GBP/JPY. The recent surge in Oil prices, driven by disruptions in the Strait of Hormuz amid the US–Iran war, is reinforcing inflation concerns and prompting a hawkish repricing of BoE rate expectations, providing additional support to the cross.
However, the BoJ faces a challenging backdrop, as persistent inflation may support further policy tightening, while higher energy costs could weigh on Japan’s economic growth, given its status as a major energy importer, clouding the outlook.
Nevertheless, both central banks are widely expected to keep rates unchanged at their upcoming meetings, with markets likely to focus on forward guidance for clues on how policymakers assess the economic impact of rising Oil prices.
From a technical perspective, GBP/JPY appears to be forming a bearish flag pattern on the daily chart. However, the near-term bias remains tilted to the upside as the pair holds comfortably above the rising 100- and 200-day Simple Moving Averages (SMAs)
The Relative Strength Index (RSI) at 54 stays above its midline, suggesting moderate bullish momentum. The Moving Average Convergence Divergence (MACD) line remains above the Signal line in positive territory, with a still-positive histogram that supports persistent, if measured, buying pressure.
On the downside, a clear break below the lower boundary of the flag near the 211.00-210.50 region could expose the 100-day SMA around 209.00, followed by the 200-day SMA near 204.14. On the upside, initial resistance is seen near 213.00, close to the upper boundary of the flag, with a sustained break opening the door toward the 215.00 area, the February 4 high.
Central banks FAQs
Central Banks have a key mandate which is making sure that there is price stability in a country or region. Economies are constantly facing inflation or deflation when prices for certain goods and services are fluctuating. Constant rising prices for the same goods means inflation, constant lowered prices for the same goods means deflation. It is the task of the central bank to keep the demand in line by tweaking its policy rate. For the biggest central banks like the US Federal Reserve (Fed), the European Central Bank (ECB) or the Bank of England (BoE), the mandate is to keep inflation close to 2%.
A central bank has one important tool at its disposal to get inflation higher or lower, and that is by tweaking its benchmark policy rate, commonly known as interest rate. On pre-communicated moments, the central bank will issue a statement with its policy rate and provide additional reasoning on why it is either remaining or changing (cutting or hiking) it. Local banks will adjust their savings and lending rates accordingly, which in turn will make it either harder or easier for people to earn on their savings or for companies to take out loans and make investments in their businesses. When the central bank hikes interest rates substantially, this is called monetary tightening. When it is cutting its benchmark rate, it is called monetary easing.
A central bank is often politically independent. Members of the central bank policy board are passing through a series of panels and hearings before being appointed to a policy board seat. Each member in that board often has a certain conviction on how the central bank should control inflation and the subsequent monetary policy. Members that want a very loose monetary policy, with low rates and cheap lending, to boost the economy substantially while being content to see inflation slightly above 2%, are called ‘doves’. Members that rather want to see higher rates to reward savings and want to keep a lit on inflation at all time are called ‘hawks’ and will not rest until inflation is at or just below 2%.
Normally, there is a chairman or president who leads each meeting, needs to create a consensus between the hawks or doves and has his or her final say when it would come down to a vote split to avoid a 50-50 tie on whether the current policy should be adjusted. The chairman will deliver speeches which often can be followed live, where the current monetary stance and outlook is being communicated. A central bank will try to push forward its monetary policy without triggering violent swings in rates, equities, or its currency. All members of the central bank will channel their stance toward the markets in advance of a policy meeting event. A few days before a policy meeting takes place until the new policy has been communicated, members are forbidden to talk publicly. This is called the blackout period.
Scotiabank strategists Shaun Osborne and Eric Theoret note the Canadian Dollar (CAD) is flat against the Dollar (USD) but supported by elevated Oil prices and narrow yield spreads. They see USD/CAD fundamentally rich versus a fair value (FV) in the mid‑1.34s and expect a 1.3650–1.3720 range near term, with focus on Wednesday’s Fed and Bank of Canada (BoC) meetings.
CAD seen undervalued versus fair value
"The CAD is entering Tuesday’s NA session unchanged vs. the USD with modest underperformance on the crosses. The CAD looks to have found renewed support at key technical levels (USD/CAD resistance above 1.37) and remains fundamentally undervalued relative to our fair value estimate."
"Our FV estimate for USD/CAD appears to have settled in the mid-1.34s, offering a significant discount to current spot around 1.37. Domestic releases have been limited to existing home sales, offering a softening in the pace of contraction in the month of February."
"Near-term risk centers on the outlook for relative central bank policy and Wednesday’s dual Fed/BoC meetings where we anticipate a neutral message from the BoC and cautious dovishness from the Fed."
"Neutral—momentum is neutral with an RSI hovering just above the 50 threshold. Recent price action has confirmed material resistance above 1.37, the upper bound of a local range that offers a flat floor just below 1.35."
"The latest congestion appears centered around the 50 day MA (1.3697), and last week’s rally appears to have faltered. We look to a near-term range bound between 1.3650 and 1.3720."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
TD Securities’ Senior Commodity Strategist Daniel Ghali warns Gold is increasingly exposed as US 2-year yields break their downtrend and the macro backdrop shifts. He argues the debasement trade is crowded, money supply growth has normalized, rate markets see a prolonged pause, and Fed independence concerns are easing, leaving Gold vulnerable despite ongoing, but slowing, central bank demand.
Crowded debasement trade under pressure
"For the first time in more than a year, US2y yields have broken out of their downward trend, reflecting concerns surrounding Fed policy in a stagflationary shock."
"Gold is vulnerable: (1) The debasement trade has attracted immense participation, with our analysis of 13F filings suggesting that gold is no longer a fringe asset for institutional investors, given the most popular physically-backed gold ETF it is now roughly 67% as widely held by institutional investors as the most popular ETF in history. And yet, (2) money supply growth is trending at a pace that is more commensurate with the economy. (3) Rates markets are pricing in a more prolonged pause, with little room remaining to terminal. (4) Fed independence concerns have been alleviated by recent roadblocks to the Fed Chair confirmation process. (5) A Supreme Court ruling on the Lisa Cook case that is central to independence fears should be resolved within 2-3 months at most."
"The debasement trade is vulnerable, and while central bank buying activity provides an out for investors, the pace of official sector buying activity has declined over the last year. Importantly, the conflict in the Middle East will fuel further declines in official sector purchases, associated with the impact of the war on Gulf nations' economies."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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