Forex News
- USD/JPY ticks lower to near 159.60 as the US Dollar trades subduedly.
- US President Trump is willing to end the war with Iran despite the Hormuz remaining closed.
- A higher oil price outlook is expected to limit the downside in the US Dollar.
The USD/JPY pair ticks lower to near 159.60 during the European trading session on Tuesday. The pair is marginally lower as the US Dollar (USD) trades subduedly, following the release of the Wall Street Journal (WSJ) report, which shows that United States (US) President Donald Trump is willing to end the war with Iran despite the Strait of Hormuz remaining closed.
The WSJ report showed that US President Trump doesn’t intend to extend the conflict beyond the set timeline of four to six weeks, and has damaged Tehran’s navy and missile infrastructure significantly.
During the press time, S&P 500 futures trade significantly higher as fresh de-escalation in Middle East conflicts has improved the market sentiment. Meanwhile, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, is almost flat around 100.45.
Amid improving investors’ risk appetite, the US Dollar has not faced intense selling pressure as oil prices are expected to remain higher due to Iran’s continuous military dominance on the Strait of Hormuz, a scenario that will keep global inflation projections elevated.
Traders have already priced out the hopes of two interest rate cuts by the Fed this year after the Middle East war started.
Meanwhile, the Japanese Yen (JPY) trades broadly firm amid hopes that the Bank of Japan (BoJ) will continue raising interest rates. The BoJ Summary of Opinions of the March policy meeting, released on Monday, showed that several policymakers were confident of interest rate hikes in the near term.
"One member said the BoJ must raise policy rate without hesitation if there are no signs of significant deterioration in the economic environment, wave-setting stance of small and midsized firms," BoJ Summary of Opinions showed.
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.
Commerzbank’s Volkmar Baur highlights that RBA minutes show March’s back‑to‑back rate hike was a closer call than markets assumed. Board members agreed more tightening is needed but differed on timing, with the March move mainly aimed at preserving flexibility. Another hike in May is described as an option, increasingly likely if the Iran conflict persists and inflationary effects intensify.
RBA signals conditional May tightening risk
"The minutes of the Reserve Bank of Australia’s latest monetary policy meeting, released today, show that the decision to raise interest rates for a second consecutive time was actually somewhat closer than it might have seemed in the aftermath of the meeting. Understandably, the conflict with Iran is causing a great deal of uncertainty, as it is impossible to say with certainty how it will end, when it will end, or what the exact economic consequences will be."
"The minutes therefore show once again that while RBA members agreed that interest rates should be raised again in the near future, there was disagreement over whether this should happen as early as March or only at a later date."
"In this light, the decision should be interpreted as meaning that raising the key interest rate in March simply gave the RBA the flexibility to raise rates again in May, should the conflict persist until then and the inflationary effects become clearer."
"May is therefore an option, but not yet a foregone conclusion. However, the decision in May is likely to depend more on the Iran conflict and its repercussions than on “normal” economic developments."
"In this case, a prolonged conflict makes another rate hike is more likely than not."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Dow Jones futures rise as hopes grow that Trump may end the Iran conflict.
- Market Sentiment improved after Fed’s Powell said long-term US inflation expectations remain anchored.
- Art Hogan of B. Riley Wealth Management says the 10% declines are a typical correction.
Dow Jones futures rise, up by 0.81%, above 45,800 during European hours, ahead of the United States (US) regular market open on Tuesday. Meanwhile, S&P 500 and Nasdaq 100 futures advance 0.78% and 0.54% to near 6,440 and 23,260, respectively, at the time of writing.
US stock futures advanced as easing risk aversion and lower oil prices lifted market sentiment, driven by rising expectations that US President Donald Trump could bring the Iran conflict to an end. The Wall Street Journal reported that Trump indicated to aides he may stop the campaign even if the Strait of Hormuz remains largely closed. However, analysts consider the recent oil price decline a short-lived response, emphasizing that any sustained drop would require a full restoration of shipping flows through the strait.
Meanwhile, market sentiment improved following dovish remarks from Federal Reserve (Fed) Chair Jerome Powell, who reiterated that long-term US inflation expectations remain well anchored despite escalating Middle East tensions. Powell also stressed that the Fed’s current policy setting gives policymakers room to evaluate the broader economic effects of the Iran conflict.
During Monday’s regular US session, the Dow Jones edged up 0.11%, while the S&P 500 and Nasdaq 100 fell 0.39% and 0.73%, respectively. The S&P 500 is now down just over 9% from its recent closing peak, largely due to weakness in technology stocks, which dropped more than 1%. Art Hogan of B. Riley Wealth Management noted that the pullback appears to be a typical market correction rather than an unusual development, adding that declines of around 10% are common in longer-term market cycles, reported by CNBC.
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
Nomura analyst Andrzej Szczepaniak argues that March Euro area inflation will not significantly alter the ECB’s near-term policy stance. They expect policy rates to stay unchanged through Q4 2027, with the Iran war and its impact on Brent crude and energy prices now the key driver of ECB decisions.
War and energy dominate ECB outlook
"We believe March HICP inflation alone will do little to affect the ECB’s near-term policy path. A marked jump in March HICP inflation is widely expected due to the rise in fuel prices as a result of the rally in Brent crude oil prices following the start of the Iran war."
"In our baseline, we expect the ECB to leave rates unchanged through Q4 2027. However, our ECB forecast is based on the assumption that events in the Middle East will unfold in such a way that the energy price shock from the war in Iran will have a limited meaningful impact on the euro area economy over the medium term."
"We believe that, if the spot price of Brent crude oil were to remain above $95/bbl by the ECB's June meeting, the ECB would raise rates by 25bp in June and then again in September."
"ECBspeak has, for the most part, maintained its hawkish bias, with a number of ECB members suggesting April is live. Ultimately, though, the ECB’s eventual decision on rates remains a question on the intensity and longevity of the Iran war, and the resulting impact on crude oil and natural gas prices."
"We believe the ECB will want to retain all optionality ahead of the April meeting, hence why ECBspeak is yet to meaningfully push back against an April rate hike. That said, as per the usual Bloomberg and Reuters “sources stories” that appeared following the ECB’s March meeting, we believe an April rate hike would only become a meaningful risk should the Iran war sufficiently intensify relative to the ECB’s March meeting."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Gold gains strong positive traction amid a modest US Dollar pullback from the YTD peak.
- Reports suggest that Trump is open to ending the war without reopening the Strait of Hormuz.
- This triggers a corrective fall in Oil prices and eases inflation fears, weighing on the USD.
Gold (XAU/USD) moves further away from a one-and-a-half-week high, touched earlier this Tuesday, and trades just above the $4,550 level during the first half of the European session, still up for the third straight day. Reports that US President Donald Trump is willing to wind down the military campaign against Iran, even if the Strait of Hormuz remains largely closed, trigger a corrective pullback in Crude Oil prices. This, in turn, eases inflation concerns and keeps US Treasury bond yields on the back foot, prompting some US Dollar (USD) profit-taking and benefiting the commodity.
Meanwhile, Iran has signaled reluctance to engage in direct negotiations with the US, highlighting fragile diplomatic progress. Furthermore, the US is still deploying additional troops and assets to the region, adding to uncertainties and dampening hopes for a quick de-escalation of tensions in the Middle East. This should act as a tailwind for Crude Oil prices and keep inflation risks in play, bolstering bets for higher interest rates globally. Expectations for hawkish central banks, including the US Federal Reserve (Fed), cap gains for the non-yielding Gold.
Traders now seem to have fully priced out the possibility of any further rate cuts by the US central bank and rapidly increasing bets for a hike by the end of this year. The outlook, in turn, backs the case for the emergence of dip-buying around the USD, which, in turn, contributes to keeping a lid on the Gold price. Hence, it will be prudent to wait for strong follow-through buying before positioning for an extension of the recent solid recovery from the 200-day Simple Moving Average (SMA), around the $4,100 mark, or a four-month low, touched last week.
Traders now look to the US economic docket – featuring the release of JOLTS Job Openings data and the Conference Board's Consumer Confidence Index. This, along with speeches by influential FOMC members, will drive the USD and provide some impetus to the Gold price. The market focus, however, remains glued to geopolitical developments, which will continue to play a key role in infusing volatility around the XAU/USD pair.
XAU/USD daily chart
Gold bears have the upper hand while below 100-day SMA support breakpoint
From a technical perspective, the near-term bias is cautiously bearish as the Gold price hovers just under the 38.2% Fibonacci retracement of the fall from the monthly swing high. Moreover, the precious metal trades beneath the 100-day Simple Moving Average (SMA), suggesting the broader uptrend is intact but under pressure in the short term. Moreover, the 200-day SMA continues to grind higher, reinforcing longer-term bullish structure despite the pullback.
Meanwhile, the Relative Strength Index (RSI) has recovered from oversold territory to around 41, indicating easing but still subdued upside momentum. Furthermore, the Moving Average Convergence Divergence (MACD) remains below zero with negative readings, consistent with a fading bullish impulse.
Initial resistance stands at the 38.2% Fibo. retracement at $4,592.49, with the 100-day SMA near $4,637 forming the next barrier. A daily close above the latter would open a recovery toward the 50.0% retracement at $4,747.16.
On the downside, immediate support is seen near the recent lows around $4,470, ahead of the 23.6% retracement at $4,401.11, where prior price congestion aligns with the corrective structure. A break below $4,401.11 would expose the $4,200–4,150 region and bring the rising 200-day SMA at $4,129 into focus as deeper trend support.
As long as price holds above the 23.6% retracement and the 200-day SMA, the broader bullish framework survives, but failure there would reinforce the current bearish near-term bias.
(The technical analysis of this story was written with the help of an AI tool.)
Economic Indicator
JOLTS Job Openings
JOLTS Job Openings is a survey done by the US Bureau of Labor Statistics to help measure job vacancies. It collects data from employers including retailers, manufacturers and different offices each month.
Read more.Next release: Tue Mar 31, 2026 14:00
Frequency: Monthly
Consensus: 6.87M
Previous: 6.946M
Source: US Bureau of Labor Statistics
Societe Generale’s commodities team has revised its Oil outlook, warning Brent could spike towards $150/bbl in a higher‑for‑longer scenario if the Strait of Hormuz is shut for two months. The bank raises its 2026 year‑end Brent forecast to $80/bbl from $65/bbl, citing large OPEC losses, tight inventories and only limited demand destruction.
Tight balances drive bullish outlook
"Our commodities team revised their oil forecasts and warn of the risk of $150/bbl in a higher-for-longer baseline scenario based on a two-month shutdown of Hormuz and lasting supply damage."
"We lift our 2026 year-end Brent forecast to $80/bbl from $65/bbl. We assume OPEC losses of 15 mb/d in March and losses and adjustments in April result in an eventual deficit of 8mb/d by mid/late month."
"We assume GCC output down by up to 3 mb/d through year-end. Iran loses 2 mb/d of export capacity for the rest of 2026. Additional OPEC supply returns gradually from May, alongside G7 SPR flows and resumed Chinese buying. Prices spike in April (~$125/bbl average with upside to $150/bbl) before easing to around $80/bbl by December."
"But demand rising towards ~106 mb/d keeps days-cover below five-year norms, reinforcing a structurally tight market. Some demand destruction is taking place, but nowhere near enough to close the gap, and inventories won’t get back to five-year norms until year-end."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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.
