Forex News
- USD/JPY trades around 159.50 on Friday, posting modest daily gains.
- Persistent US Dollar strength continues to support the pair.
- Intervention warnings from Japanese authorities may limit further upside.
USD/JPY trades around 159.50 on Friday at the time of writing, up 0.10% on the day. The pair remains close to recent highs, supported by the continued strength of the US Dollar (USD) and a still-wide interest rate differential between the United States (US) and Japan.
Recent US macroeconomic data have painted a mixed picture of the economy. Inflation, measured by the Personal Consumption Expenditures (PCE) Price Index, eased slightly in January, while the fourth-quarter Gross Domestic Product (GDP) growth was revised down to 0.7%. Despite these signs of slowing activity, underlying inflation pressures remain relatively persistent, reinforcing expectations that the Federal Reserve (Fed) could keep interest rates higher for longer.
Meanwhile, other US indicators released earlier in the day point to a mixed but generally moderating economic backdrop. Durable Goods Orders were virtually unchanged in January at $321.2 billion, significantly missing market expectations for a 1.2% increase. Labor market data showed some resilience, with the Job Openings and Labor Turnover Survey (JOLTS) rising to 6.946M in January, above both the revised previous reading of 6.55M and market expectations. At the same time, consumer confidence showed signs of weakening, with the preliminary University of Michigan Consumer Sentiment Index slipping to 55.5 in March from 56.6 previously, highlighting growing caution among US households about the economic outlook.
In this context, the US Dollar remains supported across the currency market, helping maintain upward pressure on USD/JPY. Rising energy prices and geopolitical tensions are also contributing to cautious market sentiment, further underpinning demand for the Greenback.
On the Japanese side, the persistent weakness of the Japanese Yen (JPY) continues to draw attention from policymakers. The pair is now trading close to levels that previously triggered foreign exchange intervention by Japan’s Ministry of Finance.
Japan’s Finance Minister Satsuki Katayama recently stated that authorities are closely monitoring developments in the foreign exchange market and are ready to take all necessary measures to address excessive volatility. Such comments may limit investors’ appetite to push the pair significantly higher in the near term.
At the same time, the policy outlook of the Bank of Japan (BoJ) remains an important factor. Markets expect the central bank to maintain a cautious approach to policy normalization as policymakers assess whether wage growth and domestic demand can sustain a durable inflation trend.
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 Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.60% | 0.76% | 0.10% | 0.66% | 0.91% | 0.84% | 0.42% | |
| EUR | -0.60% | 0.17% | -0.47% | 0.07% | 0.31% | 0.24% | -0.17% | |
| GBP | -0.76% | -0.17% | -0.65% | -0.10% | 0.14% | 0.07% | -0.33% | |
| JPY | -0.10% | 0.47% | 0.65% | 0.57% | 0.80% | 0.72% | 0.32% | |
| CAD | -0.66% | -0.07% | 0.10% | -0.57% | 0.23% | 0.15% | -0.24% | |
| AUD | -0.91% | -0.31% | -0.14% | -0.80% | -0.23% | -0.07% | -0.47% | |
| NZD | -0.84% | -0.24% | -0.07% | -0.72% | -0.15% | 0.07% | -0.40% | |
| CHF | -0.42% | 0.17% | 0.33% | -0.32% | 0.24% | 0.47% | 0.40% |
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).
- USD/CAD extends gains for a third straight day, climbing above 1.3700.
- The Canadian Dollar weakens after February employment data delivers a sharp downside surprise.
- Geopolitical tensions and fading Fed rate-cut bets support the US Dollar.
USD/CAD extends its advance on Friday as the Canadian Dollar (CAD) weakens across the board after Canada’s latest employment report surprised to the downside, while firm US Dollar (USD) demand amid the ongoing US-Iran war adds further pressure on the Loonie.
At the time of writing, the pair trades near 1.3728, extending gains for a third consecutive day and reaching its highest level in more than a week.
Data released by Statistics Canada showed a sharp deterioration in hiring conditions. Net Change in Employment fell by 83.9K in February, far worse than expectations for a 10K increase and following a 24.8K decline in January. Meanwhile, the Unemployment Rate rose to 6.7% from 6.5% in January, coming in above the 6.6% market forecast.
The data points to growing slack in the labour market and could prompt the Bank of Canada (BoC) to reassess its monetary policy outlook, even as markets largely expect the central bank to keep interest rates on hold through 2026.
Meanwhile, elevated Oil prices could offer some support to the commodity-linked Canadian Dollar, as Canada is a major net exporter of crude. At the same time, higher energy prices could add to inflationary pressure, reinforcing the BoC’s cautious policy stance.
At its January monetary policy meeting, the central bank said policy remains focused on keeping inflation close to the 2% target while helping the economy navigate a period of structural adjustment, adding that the current policy rate “remains appropriate.” The BoC is scheduled to meet next week and is widely expected to leave interest rates unchanged.
Across the board, traders showed a muted reaction to the latest US economic data as markets remained primarily focused on escalating tensions in the Middle East.
The geopolitical backdrop has kept the USD well supported, with investors reducing expectations for Federal Reserve (Fed) rate cuts amid renewed inflation risks, providing additional support to the Greenback.
The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 100.30, its highest level since November 2025.
Earlier, markets had been expecting more than 50 basis points (bps) of Fed easing this year. However, investors now see only around 20 bps of cuts priced in by December, according to Bloomberg interest-rate swaps data.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
TD Securities analysts expect the Canadian Dollar (CAD) to show relative resilience versus non-USD peers thanks to Oil links, lower beta to risk-off and cleaner positioning. However, they still anticipate USD strength and see USD/CAD moving higher as geopolitical uncertainty and risk premia stay elevated, with BoC communication not a major driver.
CAD resilience but USD/CAD upside risk
"As the conflict approaches its third week, CAD has continued to demonstrate relative resilience. With a more dovish assessment of recent data flow balanced by hawkish risks posed by higher energy prices, we expect BoC to strike a cautious tone and keep all options on the table but fall short of signaling any imminent action. This is not going to be a big driver for USD/CAD with a focus on geopolitical uncertainty."
"Overall, we see USD upside while risk and uncertainty premia remain elevated and expect USD/CAD to move higher on further risk-off. In our playbook, we outline market reactions under the following scenarios:"
"Modest escalation scenario: We expect limits to escalation on both sides of the conflict, particularly given the US midterm election year. Under this outcome, USD downside will eventually return on waning US growth exceptionalism, diminished safe-haven appeal, and the persistence of the “Hedge America” theme which may intensify after recent US actions."
"Protracted conflict scenario: If the conflict proves more prolonged, CAD should outperform its non-USD peers. It has lower beta to risk-off, oil links and terms of trade boost (even though modest), and is less exposed to any growth slowdown on the other side of the world from an extended conflict (as it is mainly exposed to the US). However, USD/CAD will move higher on a more prolonged risk-off."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- The number of Job Openings on the last business day of January stood at 6.94 million, higher than the 6.55 million in December.
- Both hires and total separations were little changed, at 5.3 and 5.1 million, respectively.
The number of job openings in the US was little changed at 6.94 million in January, while for December it was revised upward to 6.55 million from the 6.54 million previously reported, the US Bureau of Labor Statistics (BLS) reported in the Job Openings and Labor Turnover Survey (JOLTS) on Friday. The print was higher than the market's forecast of 6.7 million job openings.
“In January, the number and rate of hires were unchanged at 5.3 million and 3.3%, respectively. Hires decreased in transportation, warehousing, and utilities (-67K). (...) The number and rate of total separations in January were little changed at 5.1 million and 3.2%, respectively.”
Additional information indicates that: “The number of job openings for December was revised upwards by 8K to 6.6 million, the number of hires was revised down by 21K to 5.3 million, and the number of total separations was revised down by 48K to 5.2 million. Within separations, the number of quits was revised up by 21K to 3.2 million, the number of layoffs and discharges was revised down by 96K to 1.7 million.
Market reaction to JOLTS Job Openings data
The US Dollar Index (DXY) is trading near the 100.00 level, receding from 100.30 earlier in the American session.
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 British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.37% | 0.55% | -0.03% | 0.43% | 0.53% | 0.46% | 0.27% | |
| EUR | -0.37% | 0.17% | -0.38% | 0.06% | 0.15% | 0.08% | -0.10% | |
| GBP | -0.55% | -0.17% | -0.59% | -0.11% | -0.02% | -0.10% | -0.27% | |
| JPY | 0.03% | 0.38% | 0.59% | 0.48% | 0.56% | 0.48% | 0.31% | |
| CAD | -0.43% | -0.06% | 0.11% | -0.48% | 0.08% | -0.01% | -0.16% | |
| AUD | -0.53% | -0.15% | 0.02% | -0.56% | -0.08% | -0.07% | -0.25% | |
| NZD | -0.46% | -0.08% | 0.10% | -0.48% | 0.01% | 0.07% | -0.18% | |
| CHF | -0.27% | 0.10% | 0.27% | -0.31% | 0.16% | 0.25% | 0.18% |
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).
Scotiabank strategists Shaun Osborne and Eric Theoret note the Pound is underperforming against the Dollar, hurt by risk sentiment and a surprise contraction in UK industrial production. The Bank of England faces a difficult policy backdrop as markets shift from dovish expectations to pricing a possible hike by September. Technically, GBP/USD is in a notable bear run with limited support until the 1.30–1.32 area.
Pound underperforms with limited support
"The pound is weak, down nearly 0.6% vs. the USD as it underperforms all of the G10 currencies with the exception of NZD."
"Sentiment is dominating but fundamentals are also delivering added weakness with industrial production delivering an unexpected contraction in January as the better trade balance figures were flattered by an unexpectedly deep contraction in imports."
"The BoE’s challenge is considerable as it seeks to determine the appropriate path for policy, where markets have fully erased their dovish pricing with a drift into tightening and a 50/50 chance of a 25bps hike by September."
"GBP/USD short-term technicals bearish - the latest bear run has been notable, threatening a clear break of the March 3 low in the mid-1.32s."
"We note the absence of any meaningful support between current spot and the 1.30/1.32 range."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Consumer confidence eased a tad in early March.
- One-year inflation expectation held steady at 3.4%.
American consumer confidence deflated in early March, as households grew more pessimistic about current conditions and the broader economic outlook, according to preliminary data from the University of Michigan.
The closely watched Consumer Sentiment Index receded to 55.5 from 56.6 in the previous month, surpassing economists’ expectations (55) and signalling some weakening in public confidence.
Furthermore, the Current Conditions index ticked higher to 57.8 from 56.6, while the Expectations gauge dropped to 54.1 from 56.6, highlighting a downbeat scenario for the months ahead.
Inflation expectations, meanwhile, came in mixed: The one-year outlook held steady at 3.4%, and the five-year forecast eased to 3.2% from 3.3%.
Market reaction
The US Dollar remains well bid, adding to the ongoing move higher and sending the US Dollar Index (DXY) back above the key 100.00 hurdle, or multi-month highs.
Inflation FAQs
Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
Commerzbank’s commodity team, including Barbara Lambrecht and colleagues, highlights that the Iran war has triggered the largest oil supply outages ever, with the IEA estimating losses of at least 8 million barrels per day. A record 400 million barrel reserve release only partly offsets this and is seen as temporary. As long as the conflict persists, Brent and broader oil prices are expected to stay well supported.
Record outages keep Brent elevated
"The IEA estimates production losses in March at an average of 8 million barrels per day. These are the highest losses ever recorded. At just under 99 million barrels, global daily supply is at its lowest since the first quarter of 2022, when the war in Ukraine led to short-term losses in Russian oil production."
"The industrialised countries belonging to the IEA have announced the release of a record 400 million barrels of oil from emergency reserves in order to calm the oil market. Theoretically, this amount would cover the loss of oil supplies through the Strait of Hormuz for about a month. Spread over a period of two months, a supply gap of around 7 million barrels per day would remain if the strait remains completely closed."
"The focus remains on the conflict in Iran. Even if the historically largest release of oil reserves compensates for production losses in the short term, this is only a temporary solution. After all, it is offset by the largest outages on the oil market ever seen."
"The US Energy Information Administration (EIA), on the other hand, is more optimistic in the medium term: the significant rise in oil prices is likely to lead to higher US crude oil production, albeit with a delay of several months. For this year, the EIA expects production levels to remain at 13.6 million barrels per day. Next year, production is expected to rise to 13.8 million barrels per day."
"As long as there is no end in sight to the war, prices will remain well supported."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Standard Chartered’s Chong Hoon Park and Nicholas Chia expect the Bank of Japan to keep its policy rate at 0.75% on 19 March, with a cautious stance due to uneven Japanese growth and higher Oil prices. They see the path of least resistance for USD/JPY as higher, potentially re-testing 162, supported by positive seasonality and limited Ministry of Finance jawboning.
BoJ caution and Oil support stronger Dollar
"We expect the BoJ to keep the policy rate unchanged at 0.75% at its upcoming 19 March meeting. Policy makers appear focused on confirming that wage increases translate into stronger consumption before proceeding with further normalisation amid the oil price shock."
"Our base case remains for the BoJ to hike rates in Q3, likely at the July meeting. We maintain our terminal BoJ rate projection at 1%, although the risk is likely skewed to the upside (i.e. the BoJ hikes more than expected)."
"We think the path of least resistance for USD/JPY is higher, potentially testing the highs of 162 – which last prompted FX intervention by the Finance Ministry in July 2024 – amid higher-for-longer oil prices in the near term."
"Recent verbal intervention has been limited in intensity and magnitude, which may signal its unwillingness to lean against the market amid broad-based USD strength."
"USD/JPY seasonality typically turns positive in the latter half of March on window-dressing flows as well."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Rabobank’s FX Strategy team has lowered its short-term EUR/USD projections, citing prolonged disruption in the Strait of Hormuz and higher Oil and gas prices. The bank now expects weaker Euro performance versus the Dollar over 1–3 months, while keeping medium-term EUR/USD forecasts unchanged for now but under review as energy and geopolitical risks evolve.
Rabobank trims near-term Euro forecasts
"For some months Rabobank’s EUR/USD forecasts have been positioned below the market consensus and close to the bottom end of the range of market projections. Despite the USD positive implications of the Middle East conflict, this reduced the urgency to re-evaluate our forecasts immediately. However, it has become very clear that shipping through the Strait of Hormuz could be affected for a while."
"We have therefore reduced our EUR/USD forecasts on a 1- and 3-month view to 1.14 and 1.15 respectively from 1.16..."
"For now we have left our medium-term forecasts unchanged, though these will remain under review."
"The EUR is close to the bottom of the performance table, which is likely a function of the market maintaining long EUR positions for some months and the deterioration of the Eurozone’s terms of trade given its stance as a net energy importer."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- EUR/USD recovers slightly after hitting a seven-month low near 1.1433.
- Sticky US inflation and elevated Oil prices reinforce expectations of higher-for-longer Fed rates.
- Oil supply risks weigh on the Euro despite ECB tightening bets.
The Euro (EUR) trims part of its earlier losses against the US Dollar (USD) on Friday as traders digest the latest US economic data. At the time of writing, EUR/USD is trading around 1.1472 after touching an intraday low near 1.1433, its weakest level since August 2025.
The US Personal Consumption Expenditures (PCE) Price Index rose 0.3% MoM in January, in line with market expectations and unchanged from December. On an annual basis, the PCE Price Index increased 2.8% YoY, slightly below the 2.9% forecast and the previous reading of 2.9%.
The core PCE Price Index, the Federal Reserve’s (Fed) preferred inflation gauge, rose 0.4% MoM in January, matching both market expectations and the pace recorded in December.
On an annual basis, Core PCE increased 3% YoY, coming in below the 3.1% forecast and unchanged from December.
The data suggests price pressures remain sticky, and renewed inflation concerns driven by rising Oil prices reinforce the view that the Fed may keep interest rates higher for longer.
Meanwhile, other US economic indicators pointed to signs of moderating activity. The second estimate of US Gross Domestic Product (GDP) showed the economy expanding at an annualized rate of 0.7% in the fourth quarter, missing the 1.4% forecast and revised down from the previous estimate of 1.4%.
US Durable Goods Orders fell 1.4% in January, following a revised 0.9% decline in the previous month (revised from -1.4%). Personal Income rose 0.4% MoM, slightly below the 0.5% forecast but higher than the 0.3% increase recorded in December. Personal Spending also increased 0.4%, beating expectations of 0.3% and matching the previous reading.
In reaction to the data, the US Dollar eased somewhat, though the downside remains limited as cautious market sentiment driven by escalating tensions in the Middle East continues to support the Greenback. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, is trading around 100, its highest level since November 2025.
At the same time, the conflict is fueling inflation concerns as Oil prices remain elevated, prompting traders to trim Fed rate-cut bets and providing additional support to the US Dollar. While traders have also fully priced in a European Central Bank (ECB) rate hike by July, the Euro has failed to draw meaningful support as the risk of Oil supply disruptions weighs on the economic outlook for Europe, a major net importer of energy.
Inflation FAQs
Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
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