Forex News
- EUR/GBP trades range-bound on Friday, set for third straight weekly loss.
- Strong UK Retail Sales support the Pound, while weak German IFO weighs on the Euro.
- Traders await the ECB and BoE monetary policy meetings next week.
EUR/GBP trades in a tight range on Friday, fluctuating between minor gains and losses as markets show a muted reaction to the latest economic data, with traders remaining focused on geopolitical developments surrounding the US and Iran. At the time of writing, the cross is hovering around 0.8671, broadly flat on the day and on track for a third consecutive weekly decline.
The British Pound (GBP) is finding support from stronger-than-expected Retail Sales data, while the Euro remains under pressure after Germany’s latest IFO Business Climate Index came in weaker across the board, highlighting deteriorating business sentiment amid rising energy prices and ongoing Middle East tensions.
UK Retail Sales data for March pointed to resilient consumer demand. Headline Retail Sales rose by 0.7% MoM, beating expectations of 0.2% and reversing the previous 0.6% decline. On an annual basis, sales rose by 1.7% YoY, easing slightly from 1.8% previously but still above forecasts of 1.3%.
Germany’s IFO Business Climate Index for April fell to 84.4 from 86.3, missing expectations of 85.5. The Current Assessment gauge declined to 85.4 from 86.7, below the 86.2 forecast, while the Expectations Index dropped to 83.3 from 85.9, also coming in under estimates of 85.
On the geopolitical front, market sentiment improved somewhat after reports that Iran’s Foreign Minister Abbas Araghchi is expected in Islamabad, raising hopes that diplomatic channels could reopen after stalled talks. However, Iran’s state news agency IRNA said the visit is aimed at discussions with Pakistani officials rather than direct engagement with the US.
Uncertainty remains over whether direct talks with the US will materialize, as the ongoing US naval blockade, which Tehran sees as a key obstacle, continues to weigh on prospects for negotiations. With the Strait of Hormuz still under a dual blockade, risks of Oil supply disruptions remain elevated, keeping energy prices high, fueling inflation concerns, and complicating the monetary policy outlook for both the Bank of England (BoE) and the European Central Bank (ECB).
Attention now turns to next week’s policy meetings, where both central banks are widely expected to keep interest rates unchanged. The focus will be on forward guidance, particularly how policymakers assess the impact of elevated energy prices, with markets looking for clearer signals on the interest rate path as traders increasingly price in potential rate hikes.
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.
Nomura’s George Buckley and team expect the Bank of England (BoE) to leave Bank Rate unchanged at 3.75% next week, with a likely 8-1 vote and Huw Pill as the sole hawk. They see higher inflation and slightly weaker growth in new forecasts, no rate moves through end-2027, but asymmetric risks of near-term hikes and later cuts.
MPC seen on prolonged policy hold
"The Bank of England announces its rate decision and publishes a new set of forecasts next Thursday at midday. We expect no change in rates, with one member voting for a hike, fuller guidance, notably higher inflation and modestly weaker growth forecasts."
"A hold decision from the MPC next week looks highly likely. Even financial markets, which are pricing in more than two hikes before year-end, see only a 2-3bp risk of a hike on 30 April."
"On balance, however, we judge that an 8-1 vote for a hold is likely, with Pill being the lone voice for a rate hike this time."
"We see no further moves in policy rates this year or next, though we judge the risks as being to the upside in the near term and to the downside further ahead. Should these risks materialise (hikes followed by cuts) it may not be a ‘policy mistake’; rather the Bank being nimble in initially taking out insurance against second-round inflation effects, then having to reverse course thereafter."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- AUD/USD climbs as USD loses intraday traction amid Middle East uncertainty.
- Softer US yields and improved sentiment support risk currencies.
- The upside is fragile, as geopolitics and oil prices remain key drivers.
AUD/USD is pushing higher toward the 0.7140 area on Friday, as the US Dollar (USD) loses momentum despite ongoing Middle East noise, allowing risk-sensitive currencies to recover.
Despite solid economic data from the United States (US) earlier this week, the Greenback is edging lower as the market takes profit on its recent strength. A modest pullback in US yields, combined with a slight improvement in overall risk sentiment, is weighing on the US Dollar, creating space for the Aussie to advance.
While the current backdrop remains marked by elevated geopolitical tensions and rising Oil prices, market reactions have shifted. Instead of focusing solely on safe-haven assets, traders are beginning to show signs of stabilization in sentiment, which typically supports currencies like the Australian Dollar (AUD).
Short-term technical analysis:
On the four-hour chart, AUD/USD trades at 0.7140, hovering around a pivotal horizontal level of the same price as the pair consolidates in a broadly neutral tone. The quote sits above the longer-term 100-period Simple Moving Average (SMA) at 0.7075, which underpins the medium-term structure, but remains capped by the 20-period SMA at 0.7149, signaling a lack of clear directional conviction in the near term. The Relative Strength Index (14) at 47.3 leans slightly to the soft side but stays near the midline, suggesting range-bound momentum rather than a decisive bearish or bullish impulse.
On the topside, immediate resistance is located at the 20-period SMA at 0.7149 and the nearby horizontal barrier at 0.7152, where a sustained breakout would be needed to reopen a more constructive short-term outlook. On the downside, first support emerges at 0.7133, ahead of the 0.7126 horizontal floor, while the 100-period SMA at 0.7075 offers a more substantial medium-term demand zone if sellers regain control.
(The technical analysis of this story was written with the help of an AI tool.)
Scotiabank strategists Shaun Osborne and Eric Theoret report that weaker German IFO data, weighed down by Gulf tensions and energy price concerns, has softened the outlook for German growth but had little immediate impact on the Euro. EUR/USD has rebounded from a minor dip, with short-term technicals indicating losses are stabilizing around support and scope for a modest recovery toward recent resistance levels.
IFO weakness but EUR holds firm
"Germany’s IFO survey posted weaker than expected results for April as Gulf tensions and concerns over energy prices weighed on the Expectations component (83.3), which fell to the lowest since 2023. The weak Business Climate (84.4) and Expectations data soften the outlook for German growth prospects and suggest sluggish growth momentum at best."
"The data had little impact on the EUR, however, with spot rebounding from a minor dip to trade at session highs as North American trade gets underway."
"Neutral/bullish—Short-term price signals suggest EUR losses are steadying around the 1.1675 level (support). Intraday gains may extend above 1.1700—minor trend from last Friday’s high (and potential bull wedge ceiling)—to regain 1.1745/65."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- USD/CAD edges lower despite a still uncertain geopolitical backdrop.
- A softer US Dollar limits the pair’s upside potential in the short term.
- Rising energy prices strengthen Canada’s inflation outlook.
USD/CAD trades around 1.3685 on Friday, down 0.12% on the day, as the pullback in the US Dollar (USD) dominates price action despite a still fragile geopolitical environment. The US Dollar Index (DXY) loses 0.17% to 98.65, reflecting an easing in market sentiment following signs of de-escalation in tensions between the United States (US) and Iran.
Iran's foreign minister Seyed Abbas Araghchi will reach Islamabad on Friday along with a small delegation for the second round of peace talks with the United States, Al Arabiya reported.
This relative calm reduces demand for safe-haven assets, weighing on the Greenback, while risk-sensitive assets regain some support. Hopes for renewed diplomatic talks are helping improve overall sentiment, although risks related to the Strait of Hormuz and energy flows remain in place.
In this context, the Canadian Dollar (CAD) benefited indirectly from higher energy prices, a key driver for the Canadian economy. According to TD Securities analysts, the Bank of Canada (BoC) is expected to incorporate significantly higher Oil price assumptions in its upcoming Monetary Policy Report, with West Texas Intermediate (WTI) US Oil projected around $85. This would mark a sharp increase from previous estimates and could drive a temporary rise in inflation toward 3% in the second quarter of the year.
On the monetary policy front, the Federal Reserve (Fed) is expected to maintain a cautious stance in the near term, according to Commerzbank, keeping rates unchanged within the 3.50%-3.75% range. However, rate cuts are still anticipated later in the year, which could continue to weigh on the US Dollar.
Finally, Scotiabank analysts note that the bearish structure in USD/CAD remains intact, limiting rebound attempts. The absence of a significant escalation in market tensions and stretched US Dollar valuations could cap any meaningful upside in the pair in the short term, as Canadian fundamentals gradually improve.
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 Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.18% | -0.26% | -0.11% | -0.12% | -0.17% | -0.29% | -0.02% | |
| EUR | 0.18% | -0.08% | 0.00% | 0.06% | 0.02% | -0.10% | 0.17% | |
| GBP | 0.26% | 0.08% | 0.00% | 0.15% | 0.09% | -0.02% | 0.23% | |
| JPY | 0.11% | 0.00% | 0.00% | -0.01% | -0.06% | -0.18% | 0.07% | |
| CAD | 0.12% | -0.06% | -0.15% | 0.01% | -0.06% | -0.17% | 0.09% | |
| AUD | 0.17% | -0.02% | -0.09% | 0.06% | 0.06% | -0.12% | 0.12% | |
| NZD | 0.29% | 0.10% | 0.02% | 0.18% | 0.17% | 0.12% | 0.26% | |
| CHF | 0.02% | -0.17% | -0.23% | -0.07% | -0.09% | -0.12% | -0.26% |
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).
DBS Group Research’s Chang Wei Liang says Japan’s March Consumer Price Index (CPI) data show underlying price pressures, with headline and core-core inflation edging higher and the Bank of Japan (BoJ) reportedly set to raise its inflation forecast. He expects BoJ rate hikes to remain likely but possibly delayed, and sees USD/JPY staying supported by high Oil prices yet capped below 160 due to intervention risks.
Inflation backdrop and BOJ timing
"Japan’s headline CPI for March rose to 1.5% y/y (Feb: 1.3%), while core-core CPI eased a tad to 2.4% y/y (Feb: 2.5%). Behind the tepid headline number is a build-up of price pressures that are being moderated by government fuel subsidies."
"Given passthroughs from crude prices over time, the BOJ is reportedly considering raising its inflation forecast sharply for its next quarterly outlook."
"Rate hikes will still be likely, though the timing could be delayed till June amidst high uncertainties over the Middle East. "
"USD/JPY could remain supported amid high oil prices without a BoJ rate hike next week, but it should hold below 160 on risks of triggering verbal interventions from Finance Minister Katayama."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
TD Securities strategists expect the Bank of Canada’s (BoC) April Monetary Policy Report (MPR) to embed significantly higher Oil assumptions, with Brent at USD 90 and West Texas Intermediate (WTI) at USD 85, versus a prior USD 55 WTI baseline. They see this driving a temporary rise in headline Consumer Price Index (CPI) toward 3% in Q2 2026 before easing back toward 2% by end‑2027.
Higher Oil assumptions lift Canadian inflation path
"We look for the April MPR to incorporate a $90/$85 assumption for Brent/WTI crude, which corresponds with the average price since January 28th. That sits slightly below our baseline view for $92 WTI in Q2 and $85 by year-end, but marks a large jump from the previous assumption for $55 WTI."
"That will translate to a sharp acceleration to the Bank's inflation forecasts, with headline CPI peaking just below 3% in Q2 before slowing into year-end. We expect those forecasts to maintain a return to 2% by the end of 2027, with more modest upward revisions to core inflation measures."
"The growth impact of higher oil prices could be addressed in more depth with a stand-alone box in the April MPR, but we remain of the view that higher prices are beneficial to economic activity in Canada."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Commerzbank's Dr. Jörg Krämer and Bernd Weidensteiner expect the European Central Bank (ECB) to leave rates unchanged next week but still project a June hike if the Strait of Hormuz remains blocked and inflation risks persist. They highlight rising input and selling prices in PMI data, gradually higher consumer inflation expectations, and potential wage pressures, while also noting that weak growth indicators could limit the overall tightening path.
ECB balances inflation risks and weak growth
"The ECB is expected to keep interest rates unchanged next week. However, a rate hike is not entirely off the table, especially if second-round effects continue to drive inflation over the long term. Following the last monetary policy meeting, ECB President Christine Lagarde cited indicators that the ECB will be monitoring."
"However, we still consider an interest rate hike in June to be likely, especially if the stalemate around the Strait of Hormuz continues, which yet remains completely blocked. After all, memories of the 2022 surge in inflation are still fresh. Some of the indicators cited by ECB President Lagarde at the last press conference also point to increased inflation risks."
"Given the inflation risks mentioned above, we expect the ECB to raise interest rates in June, provided the Strait of Hormuz is not fully and permanently reopened by then. However, we do not go as far as the financial markets, which expect not just one but roughly two and a half rate hikes by the end of the year. This is because other indicators cited by President Lagarde point to certain downside risks for inflation."
"The ECB is likely to raise interest rates slightly due to inflation risks. However, there is unlikely to be more than one rate hike, as oil prices are expected to fall again once the war ends and doves dominate the ECB Governing Council."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Gold steadies above $4,700 but remains on track for a weekly loss as prospects of higher-for-longer interest rates weigh.
- US Dollar softens as hopes for future US-Iran talks improve on diplomatic signals.
- XAU/USD trades below a moving average cluster on the 4-hour chart, keeping downside pressure intact.
Gold (XAU/USD) edges higher on Friday, erasing earlier losses as the US Dollar (USD) eases modestly, with geopolitical headlines surrounding US-Iran tensions driving price action. Despite the intraday rebound, upside remains capped amid persistent macro headwinds.
At the time of writing, XAU/USD is trading around $4,730 after hitting an intraday low of $4,657, down nearly 2.0% so far this week.
The US Dollar (USD) softens after reports that Iran’s Foreign Minister Abbas Araghchi is expected in Islamabad on Friday night, according to Al Arabiya. Iran’s state news agency IRNA said the visit is for talks with Pakistani officials, not with the US for now. Still, the news has slightly improved hopes for future talks, offering some support to Gold.
The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, is trading around 98.50, easing from a one-week high of 98.94 touched on Thursday.
However, Gold remains on track to end the week in negative territory as escalating tensions in the Strait of Hormuz push Oil prices higher, fueling inflation fears and reinforcing expectations that central banks, particularly the Federal Reserve (Fed), will keep interest rates higher for longer. West Texas Intermediate (WTI) crude is up over 10% this week, hovering near $93 per barrel.
While the ceasefire extension announced by US President Donald Trump has eased fears of immediate escalation, the US-Iran standoff over the Strait of Hormuz continues to weigh on market sentiment. Tehran has accused the US naval blockade of violating the ceasefire and described it as a key obstacle to negotiations. Iranian leaders have signaled they will not participate in peace talks “under the shadow of threats.”
Speaking to reporters in the Oval Office on Thursday, Trump said, “We’ll see what happens, we have no pressure,” adding that “Iran is under time pressure, not us.” He warned that if no agreement is reached, fighting could resume, saying, “I’ll finish it up militarily,” and added that US ships are “locked and loaded, and ready to go.”
With the Strait of Hormuz remaining under a dual blockade, markets are likely to stay driven by geopolitical headlines, with elevated Oil prices continuing to feed into inflation expectations. This, in turn, is expected to keep the US Dollar and yields supported, limiting any meaningful recovery in Gold as markets continue to price in a higher-for-longer rate outlook.
On the data front, the University of Michigan’s Consumer Sentiment Index fell to 49.8 in April from 53.3 in March. The Consumer Expectations Index also declined to 48.1 from 51.7, pointing to a weaker outlook. Meanwhile, 1-year inflation expectations surged to 4.7% from 3.8% in March, while the 5-year outlook rose to 3.5%, marking the highest level since October 2025.
Technical analysis: Bearish bias holds below the moving average cluster
On the 4-hour chart, XAU/USD retains a bearish near-term bias as it continues to trade below key moving averages. The 100-period Simple Moving Average (SMA) at $4,748 and the 200-period SMA at $4,747, along with the 50-period SMA at $4,775, form a tight resistance cluster just overhead, reinforcing the broader downside tone.
Momentum indicators align with this view, with the Relative Strength Index (14) hovering near 44 in mildly negative territory and Moving Average Convergence Divergence (MACD) histogram still below the zero line, even as its negative reading moderates, hinting at waning but persistent selling pressure.
On the upside, any recovery is likely to remain capped below the moving average cluster between $4,750 and $4,775, where a sustained break above this zone could ease immediate downside pressure. On the downside, the $4,700-$4,650 zone is acting as immediate support, with a break below this area opening the door for deeper losses.
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.
The US Attorney for the District of Columbia, Jeanine Pirro, said Friday that her office is closing the criminal investigation of Federal Reserve Chair Jerome Powell, increasing the chances of a future confirmation of Kevin Warsh to become the next chief of the US central bank.
Pirro said on an X post that the Fed’s inspector general, an internal watchdog, had been asked to investigate cost overruns in the headquarters project, which had been the purported basis for her criminal probe of Powell. “I expect a comprehensive report in short order and am confident the outcome will assist in resolving, once and for all, the questions that led this office to issue subpoenas,” she stated.
“Accordingly, I have directed my office to close our investigation as the IG undertakes this inquiry,” Pirro added.
Earlier, ABC News broke the story and reported that “Senior DOJ officials have contacted senators in recent days, including Republican Sen. Thom Tillis. who sits on the Senate Banking Committee, informing them of the plan to drop the probe and refer the matter regarding alleged cost overruns at the Fed’s Washington headquarters to the bank’s internal watchdog.”
Since January, Republican Senator Tillis has said he would not approve Warsh to become the next chair unless the DoJ dropped the investigation into Powell. The US Senate is in charge of confirming the next Fed Chair, whose term begins in June 2026.
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named 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 during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
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