Forex News
- USD/CAD retains a positive bias at the start of a new week amid a bullish USD.
- The uncertainty around Iran benefits the safe-haven USD amid the hawkish Fed.
- Recovering Oil prices do little to support the Loonie ahead of the Canadian CPI.
The USD/CAD pair kicks off the new week on a positive note and trades near the 1.4170-1.4175 region during the Asian session, close to its highest level since April 2025, set last Friday.
The US Dollar (USD) stalls its modest pullback from the highest level since May 2025 amid fresh geopolitical developments over the weekend, and remains a key tailwind for the USD/CAD pair. Iran accused the US and Israel of violating the ceasefire and closed the Strait of Hormuz again in the face of continued Israeli strikes in Lebanon. Adding to this, reports suggest that Iranian negotiators suspended high-stakes talks with the US in response to a flurry of verbal threats by US President Donald Trump to strike Iran again. This, in turn, dents investors' appetite for riskier assets and supports the safe-haven buck.
The Canadian Dollar (CAD), on the other hand, continues with its relative underperformance in the wake of slowing economic growth and the Bank of Canada's (BoC) dovish policy stance compared to the US Federal Reserve (Fed). In fact, investors expect the BoC to hold rates steady through late 2026 as policymakers are prioritizing a sluggish economy over inflation threats. In contrast, the Fed's latest projection indicates that rates could rise to 3.8% by year-end, signaling a 25-basis-point (bps) rate hike in the coming months. The divergent Fed-BoC policy expectations turn out to be another factor pushing the USD/CAD pair higher.
Meanwhile, Crude Oil prices rise around 2% amid concerns about a fragile interim peace agreement between the US and Iran. This might hold back traders from placing aggressive bearish bets around the commodity-linked Loonie as the market focus now shifts to the release of the latest Canadian consumer inflation figures, due later this Monday. This, in turn, acts as a headwind for the USD/CAD pair, though the aforementioned fundamental backdrop suggests that the path of least resistance for spot prices remains to the upside. Hence, any corrective pullback might still be seen as a buying opportunity and is more likely to remain limited.
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
- EUR/USD softens to around 1.1460 in Monday’s early Asian session.
- Trump threatened to restart the war with Iran on Sunday.
- ECB's Wunsch sees possible hike 'to be on safe side.’
The EUR/USD pair drifts lower to around 1.1460 during the early Asian session on Monday. Concerns about progress for the US-Iran peace deal and expectations of higher US interest rates boost a safe-haven currency such as the US Dollar (USD) against the Euro (EUR). European Central Bank (ECB) President Christine Lagarde is set to speak later on Monday.
CNBC reported on Sunday that US President Donald Trump threatened to restart war with Iran even as Vice President JD Vance met Iranian officials for the first talks under an interim peace deal that was overshadowed by Tehran's announcement it had again closed the Strait of Hormuz. Risk-off flows are back in play following the US-Iran headlines, supporting the Greenback.
“Iran must immediately stop their highly paid PROXIES in Lebanon from causing trouble,” said Trump in a post on Truth Social, apparently referring to Iran’s Hezbollah allies in Lebanon. “If they don’t, we’ll hit Iran very hard again, just like we did last week, only harder!!!”
European Central Bank (ECB) policymaker and the head of Belgium's central bank, Pierre Wunsch, said on Friday that the central bank may raise interest rates one more time as soon as next month if it sees more evidence of Eurozone inflation spreading beyond energy.
The ECB’s deposit rate currently stands at 2.25%, and financial markets expect additional 25 basis point hikes in September or October, possibly followed by one more in the early months of next year.
ECB FAQs
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
Japan’s Finance Minister Satsuki Katayama said on Monday that the officials are ready to respond appropriately to the currency moves at any time as needed. Katayama declines to comment on specific exchange levels.
Key quotes
Won't comment on specific FX levels.
Ready to respond appropriately to currency moves at any time as needed.
Market reaction
At the time of writing, USD/JPY is up 0.10% on the day at 161.45.
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.
- Gold price posts modest losses near $4,155 in Monday’s early Asian session.
- Traders will closely watch the developments surrounding US-Iran peace talks.
- Concerns about progress for the US-Iran peace deal and hawkish Fed signals could weigh on gold.
Gold price (XAU/USD) trades with mild losses around $4,155 during the early Asian session on Monday. Traders continue to assess the developments surrounding the US-Iran peace talks in Switzerland. However, hawkish signals from the US Federal Reserve (Fed) might cap the upside for the precious metals in the near term.
US President Donald Trump over the weekend threatened strikes on Iran if Hezbollah keeps attacking Israel, raising concerns about progress for peace talks between Washington and Tehran. Iranian negotiators suspended high-stakes talks with the US in Switzerland in response to a flurry of verbal threats issued by Trump to strike Iran again, but people familiar said they were continuing.
“Gold’s rally on the back of the U.S.-Iran peace deal proved short-lived. The resurgent dollar, powered by the Fed’s newly hawkish tone under Kevin Warsh, has stolen the spotlight,” said Tim Waterer, chief market analyst at KCM Trade.
Goldman Sachs project gold prices to rise to $4,900 per ounce by December, lower than its earlier forecast of $5,400, as the bank doesn’t expect the US rate cut this year anymore.
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.
West Texas Intermediate (WTI) – the US oil benchmark – opened Monday’s Asian trading with an over $1 bullish gap, retesting the $78 mark, nearly up 2% in early dealings.
The black gold is still up 1.15%, as of writing, holding above $77 as oil supply concerns resurface after Iran closed the Strait of Hormuz again on Saturday in response to the renewed hostilities by Israel in Lebanon.
US President Donald Trump verbally threatened to strike Tehran ‘harder’ following the Strait of Hormuz closure and against the Iran-backed militant group – Hezbollah - in Lebanon.
In protest to Trump’s threats, Iranian negotiators walked out of the high-stakes talks with the US in Switzerland, raising concerns about the resumption of the peace negotiations between both sides.
Iran and the US last week signed a memorandum of understanding (MoU) designed to lift the blockade on the Strait of Hormuz, leading to 60 days of talks on Iran’s civil nuclear programme.
Looking ahead, all eyes remain on the US-Iran headlines, which could significantly influence the Oil price action, especially if Israel continues to strike Lebanon.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
- GBP/USD edges lower to around 1.3210 in Monday’s early Asian session.
- UK PM Starmer is expected to resign after a political challenge.
- Hawkish signals from the Fed underpin the US Dollar.
The GBP/USD pair faces some selling pressure near 1.3210 during the early Asian trading hours on Monday, pressured by UK political uncertainty. The British Pound (GBP) softens against the US Dollar (USD) after the reports that UK Prime Minister Sir Keir Starmer is expected to resign to make way for a new leader.
Bloomberg reported on Sunday that allies of Starmer expect him to set out a timetable for his departure as UK prime minister in the coming days, putting Britain on course for its seventh premier in a decade and paving the way for Andy Burnham to replace him.
US President Donald Trump said in a post on Truth Social on Sunday that Starmer was to resign as prime minister. Meanwhile, UK Business Minister Peter Kyle said the prime minister was reflecting on "the political challenges that he faces in this moment.” The Cable attracts some sellers following UK political headlines.
Hawkish signals from the Federal Reserve (Fed) support the Greenback. Last week, the US central bank decided to hold its benchmark interest rate steady between 3.50% and 3.75% after Kevin Warsh's first meeting in charge of the central bank. Warsh said during the press conference that “price stability” would be the Fed’s guiding principle.
Futures traders have priced in that the Fed is likely to raise rates by 25 basis points (bps) at its September meeting, with some chance seen of a move as soon as next month’s meeting.
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- The Japanese Yen remains vulnerable near two-year lows early Monday.
- The US Dollar catches fresh haven demand on renewed Iran threat.
- All eyes remain on the US-Iran geopolitical situation and potential Japanese intervention.
The Japanese Yen (JPY) is facing fresh headwinds and looking to resume its downside against the US Dollar (USD) as a new week kicks off in Asia on Monday.
The USD is finding fresh safe-haven bids, following the strained peace talks between the United States (US) and Iran over the weekend, which resulted in the Iranian negotiators walking out in protest to US President Donald Trump’s threats to strike Iran again.
Trump threatened after Iran announced the closure of the Strait of Hormuz on Saturday, in the wake of the continued Israeli hostilities in Lebanon.
Trump said: "Iran must immediately stop their highly paid PROXIES in Lebanon from causing trouble. If they don't, we'll hit Iran very hard again, just like we did last week, only harder!!!"
Fox News reported that Trump had gone further in an interview, saying he had told Iranian officials if they closed the strait, "you won't have a country", and threatening to take over the waterway.
The Greenback’s renewed haven demand is driving the USD/JPY pair back toward the highest level since July 2024, near 161.80, hit last week.
However, the further upside in the pair remains at the mercy of the looming Japanese forex intervention risks, which could provide a floor to the JPY, especially after the recent hawkish Bank of Japan (BoJ) commentary and signals from the April meeting Minutes.
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.
- AUD/USD softens to near 0.7005 in Monday’s early Asian session.
- Renewed tensions between the US and Iran weigh on the Australian Dollar as a riskier asset.
- Traders begin placing bets on when the next US rate hike would come.
The AUD/USD pair declines to around 0.7005 during the early Asian session on Monday. The Australian Dollar (AUD) weakens against the US Dollar (USD) amid risk-off sentiment. Traders will closely monitor the developments surrounding the US-Iran peace deal.
US President Donald Trump threatened to restart war with Iran on Sunday even as Vice President JD Vance met Iranian officials for the first talks under an interim peace deal that was overshadowed by Tehran’s announcement it had again closed the Strait of Hormuz, per Reuters. Uncertainty and fears of a prolonged war in the Middle East could boost a safe-haven currency such as the Greenback and act as a headwind for the major pair.
Hawkish signals from the US Federal Reserve (Fed) might contribute to the USD’s upside. Inflationary pressures driven from the Iran war have prompted traders expect that the US central bank could start jacking up interest rates in just a few months.
Traders are now seeing over a 90% chance of a Fed rate hike in December, jumping from 61% prior to the Fed decision, according to the CME FedWatch Tool.
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
Citing a source with knowledge of the matter, Reuters reported on Monday that the United Kingdom (UK) Prime Minister (PM) Keir Starmer was reassessing his political future on Sunday after rival Andy Burnham's decisive parliamentary election victory prompted additional ministers from the governing Labour Party to call for his resignation.
"Keir likes to think about things," the source said.
Further pressurizing Starmer, US President Donald Trump predicted on his Truth Social platform that "Keir Starmer will resign as Prime Minister of the United Kingdom".
Meanwhile, UK Business Minister Peter Kyle said the prime minister was reflecting on "the political challenges that he faces in this moment".
Kyle told LBC radio: "So I'm not going to deny the political challenges that he faces in this moment, but what I'm also not going to do is say there is ever anything inevitable about the days ahead.”
Cabinet ministers stated that Starmer will set out his intentions outside No 10 Downing Street on Monday, commencing a process of the UK installing its seventh PM in a decade.
Market reaction
The British Pound (GBP) is under moderate selling pressure in early trading following UK political headlines, with GBP/USD down 0.17% on the day at 1.3210 as of writing.
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the weakest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.05% | 0.19% | 0.05% | 0.13% | 0.03% | 0.08% | 0.03% | |
| EUR | -0.05% | 0.14% | 0.00% | 0.07% | 0.03% | 0.06% | -0.02% | |
| GBP | -0.19% | -0.14% | 0.00% | -0.04% | -0.12% | -0.08% | -0.14% | |
| JPY | -0.05% | 0.00% | 0.00% | 0.08% | -0.02% | 0.02% | -0.01% | |
| CAD | -0.13% | -0.07% | 0.04% | -0.08% | -0.11% | -0.07% | -0.08% | |
| AUD | -0.03% | -0.03% | 0.12% | 0.02% | 0.11% | 0.06% | 0.00% | |
| NZD | -0.08% | -0.06% | 0.08% | -0.02% | 0.07% | -0.06% | -0.04% | |
| CHF | -0.03% | 0.02% | 0.14% | 0.00% | 0.08% | -0.00% | 0.04% |
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 British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
Here’s a brief recap of the key developments in the US-Iran geopolitical front that occurred over the weekend, especially after Iran closed the Strait of Hormuz on Saturday over Israel's attacks on Lebanon, and amid renewed peace talks in Switzerland.
- Iranian negotiators suspended high-stakes talks with the United States (US) in Switzerland in response to a flurry of verbal threats issued by US President Donald Trump to strike Iran again.
- However, before stalling the talks, the Guardian reported that “Iran reached a draft agreement over how the US will issue a waiver lifting sanctions on Iranian oil exports, one of the key preconditions before Iran will open talks on its nuclear file.”
- “Iranian officials claimed the waivers would be issued soon, adding that progress had also been made on unfreezing Iranian assets in overseas bank accounts,” the Guardian said.
- US and Iranian officials met in the presence of Qatari mediators. US Vice President JD Vance played down the impact of the Israeli attacks in Lebanon, saying progress had been made towards ending hostilities there.
- In the second half of Sunday, Axios reported, citing a US diplomat, that both sides had made good progress on keeping the Strait of Hormuz open. The talks also focused on enforcing the ceasefire in Lebanon and the nuclear deal.
- Trump threatened to restart the war with Iran on Sunday, in a post on Truth Social that read: "Iran must immediately stop their highly paid PROXIES in Lebanon from causing trouble. If they don't, we'll hit Iran very hard again, just like we did last week, only harder!!!"
- Fox News reported that Trump had gone further in an interview, saying he had told Iranian officials if they closed the strait, "you won't have a country", and threatening to take over the waterway.
- After two days of heavy Israeli strikes by Hezbollah on Israeli positions, there were no reports of major violence on Sunday.
Market implications
Risk-off flows are back in play at the weekly open on Monday, with the US S&P 500 futures, a risk barometer, down 0.30%. The US Dollar Index (DXY) and WTI are likely to find fresh demand on renewed US-Iran tensions.
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.
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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.
