Forex News

BNY’s Head of Markets Macro Strategy Bob Savage reports that Reserve Bank of New Zealand (RBNZ) Governor Anna Breman signaled readiness to hike rates if core inflation accelerates, citing upside risks from higher fuel prices tied to Middle East tensions. She stressed focus on core measures and expectations, while still projecting New Zealand growth this year, supporting a firmer New Zealand Dollar (NZD) and higher NZGB yields.

Hawkish bias underpins New Zealand Dollar

"RBNZ Governor Breman said the central bank will “act decisively” with rate hikes if core inflation shows signs of accelerating, warning that risks to inflation have shifted to the upside amid higher fuel prices linked to Middle East tensions."

"She emphasized that policymakers are closely monitoring core inflation, wage growth and expectations rather than headline price movements and reiterated the bank’s commitment to returning inflation to its 1–3% target range."

"While acknowledging that near-term growth may be weaker, Breman maintained that the economy is still expected to expand this year, with uncertainty remaining elevated around the outlook."

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

Deutsche Bank’s Sanjay Raja expects UK GDP to rebound by 0.2% m-o-m in February after a flat January, with balanced risks around the nowcast. The bank’s models also point to a possible upward revision to January. However, Deutsche Bank projects Q2-26 GDP growth slowing to 0.2% q-o-q and sees 2026 GDP at just 0.7%, with downside risks.

Nowcast signals modest early-2026 recovery

"The January GDP report disappointed – plain and simple. With the economy stagnating to start the year, we expect a rebound in February. We don't discount an upward revision to January GDP either."

"Our nowcast models point to both a potential upward revision to January and some further upward momentum in February."

"What do we see for February GDP? We see GDP expanding by 0.2% m-o-m, lifted by broad-based momentum across the services, production and construction sectors. We think risks around our nowcasts are balanced."

"Looking ahead, we expect growth to temper. Indeed, higher uncertainty would dampen spending and investment. Tighter financial conditions won't help either."

"We see Q2-26 GDP growth slowing to 0.2% q-o-q (from 0.3% q-o-q in Q1-26). We see 2026 GDP at 0.7%."

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

ING’s Ewa Manthey and Warren Patterson say Gold remains highly sensitive to geopolitical developments around the US–Iran ceasefire and conflict in the Middle East. They describe volatile, headline‑driven trading, with safe‑haven demand offset by shifting risk sentiment and Dollar moves, and argue that clarity on ceasefire durability will be crucial for Gold’s ability to regain upside momentum.

Geopolitics drive volatile gold trade

"Conflicting geopolitical signals are driving choppy price action in gold, with safe‑haven demand offset by shifts in risk sentiment and dollar moves."

"Earlier in Wednesday’s session, gold had climbed above $4,800/oz alongside global equities as a two‑week truce between the US and Iran briefly lifted risk appetite and eased fears of a broader economic shock."

"Gold pared earlier gains after Iran’s parliamentary speaker said last night a temporary ceasefire with the US had been violated."

"Reports of continued fighting, including Iranian strikes on Gulf states, and ongoing disruption to traffic through the Strait of Hormuz kept geopolitical risks elevated. Uncertainty also persists over whether the ceasefire extends to Israel’s campaign in Lebanon."

"Looking ahead, gold is likely to remain headline‑driven in the near term, with further clarity on the durability and scope of the ceasefire key for determining whether prices can regain upside momentum."

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

• NZD/USD gains as both the US and Iran confirm sending teams to Pakistan for negotiations on a permanent ceasefire.
• Iran criticizes the US for Israel attacking Lebanon.
• NZD/USD recovers sharply above the 20-day EMA from the four-month low around 0.5680.

The NZD/USD pair trades 0.2% higher to near 0.5835 during the European trading session on Thursday. The Kiwi pair demonstrates strength as the appeal of risk-sensitive currencies has improved, following confirmation from both the United States (US) and Iran that they are sending their respective teams to Pakistan for the first round of negotiations on the 10-point peace proposal.

On Wednesday, White House press secretary Karoline Leavitt stated that US President Donald Trump will send Vice President (VP) JD Vance-led team to Pakistan on Saturday to discuss the 10-point peace proposal shared by Iran as demands for a permanent ceasefire.

During the day, Iranian ambassador Reza Amiri Moghadam confirmed, through a tweet on X, that a team is scheduled to visit Pakistan in night for the first round of talks. However, Moghadam alleged that the US violated clauses of the 10-point plan, with Israel attacking Iran-backed Houthis in Lebanon.

Meanwhile, the market sentiment remains slightly risk-averse amid worries that Israel’s continued attacks on Lebanon could raise concerns over the sustainability of the two-week ceasefire. S&P 500 futures are down 0.4% in the European trade. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades subduedly around 99.00.

NZD/USD technical analysis

NZD/USD trades higher at around 0.5835 as of writing. The price holds a modest bullish bias as spot remains above the 20-day Exponential Moving Average (EMA) at 0.5796.

The Relative Strength Index (14) quickly shifts into the 40.00-60.00 range from below 40.00, signaling a bullish reversal.

On the downside, immediate support is seen at the 20-period EMA , with a sustained break below this band might negate the nascent recovery and expose the April 3 high of 0.5753. On the topside, the main obstacle will be the March 20 high around 0.5900, and only a decisive move through this level would open the door for a more convincing bullish extension in the days ahead.

(The technical analysis of this story was written with the help of an AI tool.)

• USD/CHF ticks up from 0.7870 lows and consolidates above 0.7900.
• Risk appetite has vanished amid the uncertainty about Iran's peace process.
• On the macroeconomic front, US inflation figures will grab the focus on Thursday and Friday.

The US Dollar (USD) nudges higher against the Swiss Franc (CHF) on Thursday and consolidates above 0.7900 after bouncing from a low of 0.7870. Investors’ concerns about the fragility of the ceasefire in Iran are keeping risk appetite subdued and have provided moderate support to the safe-haven US Dollar.

A few hours after the announcement of the ceasefire, Iran closed the Strait of Hormuz as, in their opinion, Israel had violated some of the clauses of the peace proposal with a massive attack on Lebanon that killed more than 180 people.

Israel and the US affirmed that the operations against Hezbollah in Lebanon are not contemplated in the agreement, and US President Trump warned of further action if Tehran fails to comply with the deal.

The peace process remains alive

Washington and Tehran, however, seem to be moving forward with the peace process. Both countries have announced that they will send their respective delegations to peace talks in Pakistan on Saturday. Markets, however, have come to terms with the fragility of the ceasefire and are showing a moderate risk-off mood, wary that the hostilities might resume at any moment.

On Wednesday, in the US, the minutes of the last Federal Reserve (Fed) meeting showed a balanced stance, with rate cuts still on the table, but some voices raised the possibility of monetary tightening if inflation remains above the 2% target for a prolonged period.

Later on Thursday, the US Personal Consumption Expenditures (PCE) Prices Index will provide some hints about price pressures, although the main focus will be on Friday’s Consumer Price Index (CPI). The CPI will show figures from March, considered more relevant, as they reflect the impact of the war.

In Switzerland, the calendar has been thin this week. The only event worth mentioning is the March unemployment rate, which remained steady at 3%.

MUFG’s Head of Research Derek Halpenny highlights that Japanese investors, especially banks and life insurers, were heavy sellers of foreign bonds in February and March, likely including USTs and EGBs, with record two‑month net sales. He suggests fiscal year-end factors and higher USD/JPY encouraged profit-taking, and future flows will indicate whether demand shifts back toward JGBs.

Record foreign bond selling by Japan

"What we now know following the release of cross-border flow data from the MoF [Ministry of Finance] in Japan is that Japanese investors were very much part of the bond market sell-off in March."

"The MoF data, released yesterday, revealed Japanese investors sold JPY 3,757bn worth of foreign bonds in March after selling JPY 3,422bn worth in February."

"A higher than anticipated USD/JPY level in addition to the strong rally likely encouraged profit-taking by banks while for life insurance companies, the holdings may have been running ahead of the planned asset mix and also encouraged foreign bond sales."

"Usually, you would expect to see these sales be followed by notable buying as the new fiscal year unfolds but these are not usual times and hence it will be interesting to see whether Japanese investors will have the appetite to resume buying quickly."

"Might this be a time when we see greater proportions of that selling recycled back into Japan’s domestic bond market?"

"There is certainly very little evidence yet to suggest Japanese investors are turning more toward JGBs but the scale of foreign bond buying in the coming months after a record two-month period of selling will be another gauge to assess possible shifts."

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

Commerzbank’s Tatha Ghose expects Poland’s NBP to keep rates on hold after the Iran-related energy shock derailed its easing cycle. With Oil prices unlikely to normalise quickly, emergency fiscal measures and distorted price signals keep policy in a reactive, geopolitical framework. The bank argues that rate cuts are off the table unless Oil drops below $70 per barrel, a move they do not foresee yet.

Easing cycle derailed by energy shock

"Following the energy price shock stemming from the conflict in Iran, as well as remarks by MPC members, the analyst consensus unanimously forecasts unchanged rates over the medium-term, a view we share."

"The geopolitical turmoil has fundamentally altered the near-term outlook, derailing an easing cycle which continued until last month."

"And this means that most of the economic emergency measures (e.g. fuel price caps) will be maintained by the government for now – there is no question of rate cuts in this environment."

"Consequently, monetary policy is no longer operating in a purely cyclical framework but is reacting to a geopolitical shock filtered through fiscal mitigation."

"In this environment, we argue that NBP will hold rates unless the oil price were to slip below $70/bbl in the coming months, a scenario we do not forecast yet."

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