Forex News
- Silver jumps as markets digest stronger-than-expected US job creation figures and a weaker US Dollar.
- Tensions around the Strait of Hormuz continue to support demand for safe-haven assets.
- Markets still expect Federal Reserve rate cuts despite a stronger-than-expected NFP report.
Silver (XAG/USD) trades around $80.70 on Friday at the time of writing, up 2.98% on the day, supported by a weaker US Dollar (USD) and persistent demand for safe-haven assets amid heightened geopolitical tensions.
The United States (US) Bureau of Labor Statistics (BLS) reported that Nonfarm Payrolls (NFP) increased by 115K in April, beating market expectations of 62K. March’s figure was also revised higher to 185K from 178K previously reported. The Unemployment Rate remained steady at 4.3%, while annual wage growth accelerated to 3.6%, although it came in below expectations of 3.8%.
Despite the stronger-than-expected labor market data, the US Dollar weakens as markets focus on optimism surrounding a potential agreement between Washington and Tehran and improving risk sentiment across Equity markets.
At the same time, investors remain focused on developments in the Middle East after reports of new military strikes near the Strait of Hormuz. According to US and Iranian media outlets, explosions were heard in the region as exchanges of fire between the US and Iran continue to fuel fears of a broader escalation.
This backdrop continues to support precious metals, with Silver benefiting both from its safe-haven appeal and from the weakness of the US Dollar, which increases the attractiveness of USD-denominated commodities for international buyers.
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
- AUD/USD climbed despite renewed salvos in the Strait of Hormuz.
- Iran warned its armed forces are fully prepared to respond to any aggression, though markets showed limited panic.
- US Nonfarm Payrolls increased by 115K in April, beating expectations of 62K. Average Hourly earnings decreased to 0.2% MoM, showing a softer wage growth.
The AUD/USD pair surged near the 0.7240 region on Friday as traders digest a combination of escalating Middle East tensions and the latest United States (US) labor market data.
Tensions were high at the end of the week after Fox News reported that the US military carried out additional airstrikes on Friday, hitting several empty tankers attempting to break the blockade. According to the report, the strikes were part of broader efforts to maintain US pressure on Iran's control of the Strait of Hormuz.
At the same time, an Iranian Foreign Ministry spokesperson warned that Tehran’s armed forces are “fully prepared and closely monitoring the situation,” adding that “wherever necessary, they will respond with full force to any aggression or provocation.” These headlines briefly lifted safe-haven demand, although the broader market reaction remained relatively muted, with the US Dollar (USD) holding near weekly lows despite the geopolitical escalation.
On another note, the latest US Nonfarm Payrolls (NFP) report showed that the US economy added 115K jobs in April, above market expectations of 62K, while the Unemployment Rate held steady at 4.3%. Average Hourly Earnings fell to 0.2% MoM.
Short-term technical analysis:
On the four-hour chart, AUD/USD trades at 0.7243, holding a constructive bullish bias as it remains above both the 20-period Simple Moving Average (SMA) near 0.7226 and the 100-period SMA around 0.7178. The cluster of nearby supports suggests dips are being absorbed, while the Relative Strength Index (RSI) at 59 stays in positive territory without yet signaling overbought conditions, hinting that upside pressure could persist while these floors hold.
On the topside, immediate resistance is located at 0.7249, where a horizontal barrier caps the advance and needs to be decisively cleared to open the door to a more extended recovery. On the downside, initial support is seen at the 0.7236 horizontal level, followed by the 20-period SMA and overlapping support around 0.7226, with a deeper cushion emerging at 0.7223 and then the 100-period SMA down at 0.7178, where buyers would be expected to defend the broader uptrend.
(The technical analysis of this story was written with the help of an AI tool.)
- USD/CAD edges higher as weak Canadian jobs data and easing Oil prices pressure the Loonie.
- Mixed US labor data failed to lift the Greenback, which remains under pressure amid hopes for a US-Iran deal to end the war.
- Fresh clashes near the Strait of Hormuz keep geopolitical risks elevated despite ongoing peace efforts.
USD/CAD edges higher on Friday as softer-than-expected Canadian employment data weighs on the Canadian Dollar (CAD), even as the US Dollar (USD) remains on the back foot following mixed US labor market data and hopes for a US-Iran deal to end the war. At the time of writing, the pair is trading around 1.3694 after briefly testing the 1.3700 mark, its highest level since April 29.
Data released by Statistics Canada showed that Net Change in Employment fell by 17.7K in April, sharply missing market expectations for a 15K increase and reversing the 14.1K gain recorded in March. The Unemployment Rate edged higher to 6.9% from 6.7% previously, while Average Hourly Wages slowed to 4.8% YoY in April from 5.1% in the previous month.
The growing slack in Canada’s labor market could force the Bank of Canada (BoC) to reassess its monetary policy outlook, potentially limiting its ability to tighten policy if Oil-driven inflation pressures intensify.
USD/CAD is also on track to end a four-week losing streak as a sharp pullback in Oil prices pressures the commodity-linked Loonie. The Canadian Dollar tends to be highly sensitive to movements in crude Oil, as Canada is one of the world’s largest Oil exporters.
Meanwhile, the US Dollar remains broadly pressured after mixed US labor market data reinforced expectations that the Federal Reserve (Fed) may maintain a cautious approach toward future policy easing. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, is trading around 97.92, down roughly 0.37% on the day.
Data released by the US Bureau of Labor Statistics (BLS) showed that Nonfarm Payrolls (NFP) increased by 115K in April, beating market expectations of 62K but slowing from March’s 185K gain (revised from 178K). The Unemployment Rate held steady at 4.3%, in line with expectations.
Average Hourly Earnings rose 0.2% MoM in April, below the expected 0.3% and unchanged from the previous month. Annual wage growth accelerated to 3.6% from 3.4%, below the forecast of 3.8%.
Looking ahead, market attention remains focused on developments surrounding the US-Iran war after fresh reports of escalation between US and Iranian forces near the Strait of Hormuz raised doubts over the durability of the current ceasefire.
However, US President Donald Trump insisted that the ceasefire remains in effect, while Secretary of State Marco Rubio said on Friday that the United States expects a response from Tehran on its latest peace proposal later in the day.
Nonfarm Payrolls FAQs
Nonfarm Payrolls (NFP) are part of the US Bureau of Labor Statistics monthly jobs report. The Nonfarm Payrolls component specifically measures the change in the number of people employed in the US during the previous month, excluding the farming industry.
The Nonfarm Payrolls figure can influence the decisions of the Federal Reserve by providing a measure of how successfully the Fed is meeting its mandate of fostering full employment and 2% inflation. A relatively high NFP figure means more people are in employment, earning more money and therefore probably spending more. A relatively low Nonfarm Payrolls’ result, on the either hand, could mean people are struggling to find work. The Fed will typically raise interest rates to combat high inflation triggered by low unemployment, and lower them to stimulate a stagnant labor market.
Nonfarm Payrolls generally have a positive correlation with the US Dollar. This means when payrolls’ figures come out higher-than-expected the USD tends to rally and vice versa when they are lower. NFPs influence the US Dollar by virtue of their impact on inflation, monetary policy expectations and interest rates. A higher NFP usually means the Federal Reserve will be more tight in its monetary policy, supporting the USD.
Nonfarm Payrolls are generally negatively-correlated with the price of Gold. This means a higher-than-expected payrolls’ figure will have a depressing effect on the Gold price and vice versa. Higher NFP generally has a positive effect on the value of the USD, and like most major commodities Gold is priced in US Dollars. If the USD gains in value, therefore, it requires less Dollars to buy an ounce of Gold. Also, higher interest rates (typically helped higher NFPs) also lessen the attractiveness of Gold as an investment compared to staying in cash, where the money will at least earn interest.
Nonfarm Payrolls is only one component within a bigger jobs report and it can be overshadowed by the other components. At times, when NFP come out higher-than-forecast, but the Average Weekly Earnings is lower than expected, the market has ignored the potentially inflationary effect of the headline result and interpreted the fall in earnings as deflationary. The Participation Rate and the Average Weekly Hours components can also influence the market reaction, but only in seldom events like the “Great Resignation” or the Global Financial Crisis.
In an interview with CNBC on Friday, Federal Reserve (Fed) Bank of Chicago President Austan Goolsbee said that the job market is "pretty stable."
Key takeaways
"There's not a lot of evidence the job market is falling apart."
"Inflation has not been great and is going the wrong way."
"There is not a lot of evidence of job market deterioration."
"Inflation rise is not just energy, was elevated before war."
"Fed has to keep an eye on inflation situation."
"Everything should always be on the table for the Fed."
"Trying to figure out if energy shock will last."
ING’s Carsten Brzeski highlights that German industrial production weakened further in March, with a 0.7% monthly decline leaving first-quarter output more than 1% below late 2025 levels. He notes that the war in the Middle East, soaring energy prices and a sharply narrower trade surplus increase the risk of a downward revision to Germany’s first-quarter GDP growth.
Industrial data signal renewed growth risks
"German industrial production weakened further in March as the war in the Middle East started to take its toll. The just-released industrial data for March illustrate the struggle of German industry to gain momentum in the first quarter of the year. Not only was the February drop revised downwards, with a 0.7% month-on-month decline in March, but industrial production in the full first quarter was more than 1% weaker than in the final quarter of 2025."
"The March drop was mainly driven by falling production in manufacturing. On a more positive note, activity in the construction sector rebounded somewhat in March. At the same time, export growth slowed to 0.5% MoM, from 4.7% in February."
"As industrial production is down on the quarter and the trade surplus narrowed significantly in March, a downward revision to the first estimate of first-quarter GDP growth has become likely."
"It needs at least 1% growth in the second quarter to bring industrial production back into positive territory. A development that currently looks unlikely."
"All in all, this morning's industrial production data suggests that the stuttering of one of Germany's most important growth engines worsened with the start of the war in the Middle East. Given that energy prices continued to soar in April and risks of supply chain disruptions increased, any near-term improvement in industrial production looks very unlikely."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Commerzbank strategists expect Brent to retain a significant risk premium even if a US–Iran agreement is reached and the Strait of Hormuz reopens. They argue that shipping and production will normalise only gradually, inventories are being drawn down, and energy agencies are likely to cut supply and demand forecasts, keeping Oil prices elevated versus pre‑war levels.
Risk premium anchored by Hormuz disruption
"Even in the event of an agreement, however, oil prices are likely to fall only limitedly at first, as a return to the old normal is not to be expected for now. It is likely to take some time before shipping traffic in the strait normalises and production in the region returns to its usual level. Not only does ramping up production take time; energy and export facilities have also suffered damage."
"In any case, the strait is likely to remain a critical choke point for the time being, which justifies a risk premium. All these factors suggest that even in the event of an agreement, the oil price will initially (and from our perspective even until the end of the year) settle at a noticeably higher level than before the Iran war."
"Deeper insights into the fundamental effects on the oil market are promised by the new monthly reports from the three energy agencies. Forecasts on both the supply and demand side are likely to be revised further downward. In April, the International Energy Agency still assumed that the effects on both sides would be confined to the second quarter; the supply and demand forecasts for the second half of the year were barely adjusted."
"The inventory data are also of interest, as they show the extent to which stocks are already being drawn down. The OECD inventories, which are reported with a lag, are likely to have fallen noticeably in March for the first time, while the more timely global seaborne oil inventories are likely to have declined sharply for the second consecutive month in April."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
TD Securities’ FX strategists Jayati Bharadwaj and Howard Du note that stronger United States (US) payrolls produced only a modest reaction in the US Dollar (USD), as markets focus more on inflation than labor data. With the Federal Reserve’s (Fed) 2026 path now tied to the energy shock’s pass-through to core prices, they expect choppy USD trading and see near-term downside as elusive without progress in the Middle East.
Dollar reacts modestly to strong jobs
"The stronger than expected payrolls report had a modest reaction in the USD. We have flagged that the Fed path for the year now leans much more on how much the energy shock from Q1 will pass through to core inflation, rather than on labor market conditions (as long as they remain stable). This could potentially be why markets are reacting more to the softer wage growth data in the report rather than the stronger headline jobs number."
"We have flagged that the Fed path for the year now leans much more on how much the energy shock from Q1 will pass through to core inflation, rather than on labor market conditions (as long as they remain stable). This explains the timid reaction in the FX space, and the CPI report next week will be more closely watched."
"In the absence of fresh new catalysts, we continue to expect choppy USD price action in the near-term. Hawkish FOMC dissents and US data resilience has made near-term USD downside more elusive with positive developments on the Strait of Hormuz needed for the USD selloff to continue."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Nomura’s George Buckley and team argue that even a swift resolution to the US-Iran war and reopening of the Strait would not necessarily stop the European Central Bank (ECB) from raising rates in June. They now expect two ECB hikes in June and July 2026, brought forward from 2028, as higher energy prices push Euro area inflation above target.
War impact supports earlier ECB tightening
"Inflation is coming in above target in H1 2026 due to the Iran war."
"We expect higher energy prices to dampen euro area growth due to the economy’s heavy reliance on energy imports."
"We have brought forward our two ECB rate hikes (previously 2028) to June and July this year as a result of higher energy prices."
"As and when markets shift into de-escalation gear regarding the US-Iran war, we consider whether a resolution of the war and a reopening of the Strait would prevent the ECB from raising rates in June and July, which is our base case."
"We believe the ECB could still justify a June rate hike, to send a signal that it won’t leave inflation expectations and inflation unchecked."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Royal Bank of Canada (RBC) economist Claire Fan notes that Canada lost 18,000 jobs in April, bringing total job losses in 2026 to 112,000, while the unemployment rate rose to 6.9%. Hours worked were flat and participation increased. Rising unemployment is attributed to weak hiring rather than layoffs, with RBC expecting resilient domestic spending to gradually improve labour conditions later this year.
RBC sees hiring weakness but fewer layoffs
"Canada lost 18,000 jobs in April, adding to declines in earlier in the year for a cumulative loss of 112,000 in 2026 to date."
"The unemployment rate ticked back up to 6.9%, matching last April's level. Hours worked remained essentially flat, and the labour force participation rate increased. Critically, and consistent with earlier trends, rising unemployment was driven not by layoffs but by weak hiring."
"Permanent layoffs in Canada continued to decline in April, sitting 10% below their October 2025 peak. Instead, unemployment rose as more workers left their jobs to seek new positions and new labour market entrants struggled to find work."
"We continue to look through near-term volatility, and expect resilient domestic spending from consumers, businesses and governments will support gradual improvements in labour conditions later this year."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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