Forex News
- USD/CHF strengthens around 0.7700 in Friday’s early European session.
- US job growth unexpectedly accelerated in January, tempering bets for additional Fed rate cuts.
- Traders will take more cues from the Swiss and US CPI inflation data on Friday.
The USD/CHF pair trades in positive territory near 0.7700 during the early European session on Friday. Growing expectations that the US Federal Reserve (Fed) will not cut interest rates in the near term provide some support to the Greenback against the Swiss Franc (CHF). Traders brace for the Consumer Price Index (CPI) inflation reports from Switzerland and the United States (US) later on Friday.
US Nonfarm Payrolls (NFP) climbed by 130,000 in January, above the estimate of 70,000, according to the Bureau of Labor Statistics on Wednesday. The Unemployment Rate edges lower to 4.3% during the same period. The upbeat jobs report provides some relief to concerns about the state of the US labor market and reduces the chances that the US central bank will cut interest rates again by midyear.
The CME FedWatch tool showed markets currently priced in nearly a 92% odds that the Fed will hold rates steady at its next meeting, although the chance of a rate cut at its June meeting is now at nearly 50%.
The Swiss inflation data will be in the spotlight on Friday. The CPI is expected to show an increase of 0.1% YoY in January. If the report shows a hotter than estimated outcome, this could boost the CHF against the US Dollar (USD) in the near term.
Swiss Franc FAQs
The Swiss Franc (CHF) is Switzerland’s official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country’s economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc’s value, causing a turmoil in markets. Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone.
The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country’s currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in.
The Swiss National Bank (SNB) meets four times a year – once every quarter, less than other major central banks – to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.
Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc’s (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank’s currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate.
As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland’s main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.
- AUD/JPY stages a modest recovery from a nearly two-week low, touched on Thursday.
- The RBA’s hawkish stance and hopes for more stimulus from China underpin the AUD.
- Firming BoJ rate hike bets and the risk-off impulse benefit the JPY, capping spot prices.
The AUD/JPY pair struggles to capitalize on a modest Asian session uptick and remains close to a nearly two-week low, touched the previous day. Spot prices currently trade just below mid-108.00s, up less than 0.20% for the day, and seem poised to register weekly losses.
The Australian Dollar (AUD) draws some support from a rise in the February inflation expectations to the highest level since July 2023 and the Reserve Bank of Australia's (RBA) hawkish tilt. In fact, RBA Governor Michele Bullock said on Thursday that the central bank will raise interest rates again if inflation becomes entrenched. Furthermore, RBA Assistant Governor Sarah Hunter said that inflation is expected to remain above the 2% to 3% annual target for some time and that the labour market has stabilised from its earlier slowdown but remains tight.
Adding to this, hopes for more fiscal and monetary stimulus from China offer some support to antipodean currencies, including the Aussie. This, along with the emergence of some selling around the Japanese Yen (JPY), turns out to be a key factor acting as a tailwind for the AUD/JPY cross. The downside for the JPY, however, remains cushioned amid easing concerns about Japan's debt levels and hopes that Japan's Prime Minister Sanae Takaichi could be more fiscally responsible. Moreover, expectations that Takaichi's policies will boost the economy and prompt the Bank of Japan (BoJ) to stick to its rate-hike path. This acts as a tailwind for the JPY and caps the AUD/JPY cross.
Meanwhile, investors remain on edge amid speculations that Japanese authorities will intervene to stem further weakness in the domestic currency, which holds back the JPY bears from placing aggressive bets. Apart from this, the risk-off impulse benefits the JPY's relative safe-haven status and contributes to capping the Aussie and the AUD/JPY cross. That said, the technical setup still seems tilted firmly in favor of bullish traders and suggests that any meaningful corrective decline is more likely to be bought into.
Japanese Yen Price This week
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies this week. Japanese Yen was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.42% | -0.17% | -2.80% | -0.39% | -1.05% | -0.33% | -0.96% | |
| EUR | 0.42% | 0.26% | -2.45% | 0.03% | -0.63% | 0.09% | -0.54% | |
| GBP | 0.17% | -0.26% | -2.40% | -0.23% | -0.89% | -0.17% | -0.80% | |
| JPY | 2.80% | 2.45% | 2.40% | 2.54% | 1.85% | 2.61% | 1.84% | |
| CAD | 0.39% | -0.03% | 0.23% | -2.54% | -0.57% | 0.06% | -0.57% | |
| AUD | 1.05% | 0.63% | 0.89% | -1.85% | 0.57% | 0.73% | 0.10% | |
| NZD | 0.33% | -0.09% | 0.17% | -2.61% | -0.06% | -0.73% | -0.63% | |
| CHF | 0.96% | 0.54% | 0.80% | -1.84% | 0.57% | -0.10% | 0.63% |
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 Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
- GBP/JPY gains ground to around 208.25 in Friday’s early European session.
- The cross keeps positive outlook in medium term; further downside cannot be ruled out in near term amid weak RSI momentum.
- Initial support emerges at 207.65; first upside barrier is located at 211.80.
The GBP/JPY cross holds positive ground near 208.25, snapping the four-day losing streak during the early European session on Friday. However, the potential upside might be limited amid hopes that Japan's Prime Minister Sanae Takaichi could be more fiscally responsible and that her policies will boost the economy.
Bank of Japan (BoJ) board member Naoki Tamura on Friday reinforced the case for further policy normalization. Tamura further stated that inflation in Japan is becoming increasingly sticky and that the central bank may soon be in a position to judge its 2% price target as sustainably achieved.
Technical Analysis:
In the daily chart, GBP/JPY holds narrowly above the 100-EMA, preserving the medium-term bullish structure. Dips remain supported while that average is intact. Price slips below the lower Bollinger Band, flagging an oversold stretch as the bands widen, pointing to elevated volatility. RSI (14) at 37.07 stays below 50, indicating weak momentum with a modest uptick from recent lows.
Initial support is seen at the 100-EMA at 207.65. Further stabilization would pivot focus to resistance at the 20-day midpoint and the outer band. A return inside the Bollinger envelope would refocus 211.80, while a push in RSI back toward 50 would strengthen recovery prospects. A close above the middle band would open scope for a broader corrective bounce.
(The technical analysis of this story was written with the help of an AI tool.)
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
- EUR/USD may explore the region around 1.2082, the highest level since June 2021.
- The 14-day Relative Strength Index holds at 56 above the midpoint, signaling sustained positive momentum.
- The immediate support lies at the nine-day EMA at 1.1860.
EUR/USD remains in the negative territory for the fourth successive session, trading around 1.1870 during the Asian hours on Friday. The 14-day Relative Strength Index (RSI) momentum indicator at 56 stays above the midline, confirming steady momentum. RSI has eased but remains above 50, indicating momentum remains constructive for the bulls.
The technical analysis of the daily chart shows that the EUR/USD pair holds above the nine-Exponential Moving Average (EMA) and the 50-day EMA, maintaining a bullish tone. Both averages point higher, with the shorter tenor supporting the upswing. The nine-EMA stands above the 50-EMA, underscoring short-term trend strength, while the 50-day EMA’s steady ascent reinforces the medium-term recovery.
A sustained hold above the nine-day EMA at 1.1860 could keep the path open toward resistance at 1.2082, the highest level since June 2021.
Whereas a break back below the short-term average would encourage a retracement toward a 50-day EMA at 1.1766 and shift focus to deeper supports toward the 11-week low at 1.1578, set on January 19.
(The technical analysis of this story was written with the help of an AI tool.)
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.04% | 0.06% | 0.21% | 0.03% | 0.04% | -0.06% | 0.05% | |
| EUR | -0.04% | 0.02% | 0.20% | -0.01% | -0.00% | -0.11% | 0.00% | |
| GBP | -0.06% | -0.02% | 0.17% | -0.03% | -0.02% | -0.12% | -0.01% | |
| JPY | -0.21% | -0.20% | -0.17% | -0.18% | -0.19% | -0.29% | -0.18% | |
| CAD | -0.03% | 0.01% | 0.03% | 0.18% | -0.01% | -0.11% | 0.02% | |
| AUD | -0.04% | 0.00% | 0.02% | 0.19% | 0.00% | -0.11% | 0.00% | |
| NZD | 0.06% | 0.11% | 0.12% | 0.29% | 0.11% | 0.11% | 0.11% | |
| CHF | -0.05% | -0.01% | 0.01% | 0.18% | -0.02% | -0.01% | -0.11% |
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).
Gold prices rose in India on Friday, according to data compiled by FXStreet.
The price for Gold stood at 14,559.82 Indian Rupees (INR) per gram, up compared with the INR 14,349.39 it cost on Thursday.
The price for Gold increased to INR 169,822.90 per tola from INR 167,368.50 per tola a day earlier.
Unit measure | Gold Price in INR |
|---|---|
1 Gram | 14,559.82 |
10 Grams | 145,598.20 |
Tola | 169,822.90 |
Troy Ounce | 452,861.50 |
FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
(An automation tool was used in creating this post.)
Japan’s Finance Minister Satsuki Katayama said on Friday that markets have stabilized after the initial shock from plans to cut consumption tax on food. Katayama further stated that the debt-to-gross domestic product ratio is expected to drop further.
Key quotes
Financial Services Agency to support brokerage firms test launch of using blockchain for securities trading.
Markets have stabilized after initial shock from plans to cut consumption tax on food.
The Debt-to-Gross Domestic Product ratio is expected to drop further.
Believe that overseas financial chiefs have understood our policy.
Previous budgets have not considered rising prices and labor costs, when asked about Takaichi's comments on excessive austerity in the past.
Market reaction
At the press time, the USD/JPY pair is up 0.16% on the day to trade at 152.94.
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
The Bank of Japan (BoJ) board member Naoki Tamura said on Friday that even if the central bank raises the policy rate further, monetary conditions will remain accommodative.
Key quotes
Personally feel Japan's recent inflation is becoming sticky.
We may be able to judge that BoJ's price goal has been achieved as early as this spring.
We are in a phase where we need to scrutinise various data to determine whether Japan can make a smooth landing towards achieving price target.
Consumer inflation stabilising but must be vigilant to price outlook given renewed yen downtrend.
Expect food prices to continue rising.
Japan's output gap is already in positive territory, lack of supply capacity putting upward pressure on prices.
Expect wage growth to achieve levels consistent with 2% price target this year.
Expect BoJ to continue raising interest rate in line with improvements in economy, prices.
Underlying inflation rising gradually, very close to becoming embedded around that level,
Last remaining piece for me in determining whether BoJ's price goal is met is whether inflation is becoming embedded around that level.
I think there is good chance we can determine by around spring this year that inflation has become embedded around 2%.
My view is that impact of past interest rate hikes on Japan's economy has been very limited.
There is still quite some distance before interest rates reach level deemed neutral to economy.
Even if BoJ raises policy rate further, monetary conditions will remain accommodative.
Once BoJ’s policy rate exceeds 1%, stimulus effect of its policy will gradually weaken.
I have been saying Japan's neutral rate is at least around 1%, though must be mindful there is divergence in the estimate depending on how you measure it.
Market reaction
At the press time, the USD/JPY pair is up 0.16% on the day to trade at 152.94.
Bank of Japan FAQs
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
New Zealand's (NZ) inflation expectations rose on a 12-month time frame and on a two-year time frame for the first quarter of 2026, the Reserve Bank of New Zealand’s (RBNZ) latest monetary conditions survey showed on Friday.
Two-year inflation expectations, seen as the time frame when RBNZ policy action will filter through to prices, picked up to 2.37% in Q1 2026 versus 2.28% seen in Q4 2025.
NZ average one-year inflation expectations rose to 2.59% in Q1 vs. 2.39% in the final quarter of last year.
NZD/USD reaction to inflation expectations
At press time, NZD/USD is little changed on the day at around 0.6035.
(This story was corrected on February 13 at 7:15 GMT to say that "Two-year inflation expectations, seen as the time frame when RBNZ policy action will filter through to prices, picked up to 2.37% in Q1 2026, not Q4 2026, and NZ average one-year inflation expectations rose to 2.59% in Q1, not Q4. )
New Zealand Dollar Price Today
The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies today. New Zealand Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.02% | 0.03% | 0.28% | 0.00% | -0.01% | -0.07% | 0.02% | |
| EUR | -0.02% | 0.00% | 0.31% | -0.01% | -0.03% | -0.09% | -0.00% | |
| GBP | -0.03% | -0.01% | 0.27% | -0.02% | -0.04% | -0.10% | -0.01% | |
| JPY | -0.28% | -0.31% | -0.27% | -0.27% | -0.31% | -0.36% | -0.28% | |
| CAD | -0.01% | 0.01% | 0.02% | 0.27% | -0.04% | -0.09% | 0.00% | |
| AUD | 0.01% | 0.03% | 0.04% | 0.31% | 0.04% | -0.06% | 0.03% | |
| NZD | 0.07% | 0.09% | 0.10% | 0.36% | 0.09% | 0.06% | 0.09% | |
| CHF | -0.02% | 0.00% | 0.00% | 0.28% | -0.01% | -0.03% | -0.09% |
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 New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).
- US Dollar Index remains calm as traders adopt caution ahead of the US January CPI data.
- US headline and core inflation are expected to ease to 2.5%.
- Fed’s Miran said policy has passively tightened, leaving room for lower interest rates.
The IEA projects a 3.7 million bpd surplus in 2026 and cut its global Oil demand forecast.
The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, remains in the positive territory for the third successive session and is trading near 97.00 during the Asian hours on Friday.
Investors are now focused on the January Consumer Price Index (CPI) report from the United States. Headline inflation is forecast to ease to 2.5% from 2.7%, while core inflation is expected to slow to 2.5% from 2.6%. A softer print could give the Federal Reserve room to resume rate cuts after holding steady at its first meeting of the year.
Markets are currently pricing in two Fed rate cuts in 2026, with the first likely in the second half of the year following stronger-than-expected January employment data. Still, uncertainty persists over potential adjustments to the Fed’s balance sheet ahead of Kevin Warsh’s anticipated appointment as Chair in May. Warsh has previously criticized asset purchases but recently signaled he may support coordination with the Treasury to help lower yields.
Fed Governor Stephan Miran said on Friday that monetary policy has effectively tightened on its own, suggesting there is scope for lower interest rates. Miran added that inflation, once adjusted for distortions, is close to target and that some slack remains in the labor market, leaving room for policy support.
The CME FedWatch tool suggests that financial markets are now pricing in nearly a 91% probability that the Fed will leave rates unchanged at its next meeting, up from 77% the previous week.
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.
- NZD/USD stalls the overnight pullback from a two-week high, though it lacks bullish conviction.
- The risk-off impulse lends support to the safe-haven buck and acts as a headwind for the Kiwi.
- Traders also seem reluctant and opt to wait on the sidelines ahead of the crucial US CPI report.
The NZD/USD pair finds some support near the 0.6025 region during the Asian session on Friday and, for now, seems to have stalled the previous day's retracement slide from a two-week high. Spot prices, however, lack any firm intraday directional bias as traders opt to wait for the release of the latest US consumer inflation figures.
The crucial US Consumer Price Index (CPI) will be looked upon for fresh cues about the Federal Reserve's (Fed) policy outlook amid reduced bets for a rate cut in March in the wake of the upbeat US Nonfarm Payrolls (NFP) report on Wednesday. Traders, however, are still pricing in the possibility that the US central bank will lower borrowing costs two more times in 2026. This, along with rising threats to the Fed's independence, keeps the US Dollar (USD) bulls on the defensive and acts as a tailwind for the NZD/USD pair.
Apart from this, hopes for more fiscal and monetary stimulus from China offer some support to antipodean currencies, including the Kiwi. Meanwhile, a rise in New Zealand's Unemployment Rate in the fourth quarter of 2025 dampened expectations for any tightening by the Reserve Bank of New Zealand (RBNZ). Furthermore, the risk-off impulse, which tends to benefit the safe-haven Greenback, acts as a headwind for the New Zealand Dollar (NZD) and contributes to keeping a lid on the NZD/USD pair, warranting caution for bulls.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
Forex Market News
Our dedicated focus on forex news and insights empowers you to capitalise on investment opportunities in the dynamic FX market. The forex landscape is ever-evolving, characterised by continuous exchange rate fluctuations shaped by vast influential factors. From economic data releases to geopolitical developments, these events can sway market sentiment and drive substantial movements in currency valuations.
At Rakuten Securities Hong Kong, we prioritise delivering timely and accurate forex news updates sourced from reputable platforms like FXStreet. This ensures you stay informed about crucial market developments, enabling informed decision-making and proactive strategy adjustments. Whether you’re monitoring forex forecasts, analysing trading perspectives, or seeking to capitalise on emerging trends, our comprehensive approach equips you with the insights needed to navigate the FX market effectively.
Stay ahead with our comprehensive forex news coverage, designed to keep you informed and prepared to seize profitable opportunities in the dynamic world of forex trading.
