Forex News
- GBP/USD drops 0.73% to 1.3304 as DXY jumps to 99.31.
- Oil-driven inflation fears fuel safe-haven demand for the Greenback.
- BoE March cut odds tumble from 75% to 28%, reshaping policy outlook.
The Pound Sterling (GBP) extends its losses on Tuesday during the North American session as the conflict in the Middle East involving the US, Israel and Iran intensified, fueling a flight to safety sponsored by inflationary pressures on high Oil prices.
Risk aversion and fading BoE cut expectations weigh on Sterling
GBP/USD trades at 1.3304, down 0.73% as the Greenback remains bid. The US Dollar Index (DXY), which measures the buck’s value against a basket of six currencies, is up 0.78% at 99.31 near the highs of the day.
Market sentiment continues to deteriorate as geopolitical news emerged. Iran’s envoy to the United Nations (UN) said that Tehran has not contacted the US about possible peace talks, while sirens sounded in Kuwait, according to Al Hadath.
The lack of economic data in the US left traders adrift on comments by Federal Reserve (Fed) officials.
New York Fed President John Williams commented that the easing cycle remains on track if inflation pressures moderate, as he expects. He added that, “Monetary policy is currently well positioned to support the stabilization of the labor market and return inflation to our 2% goal.”
Later, Kansas City Fed Jeffrey Schmid was hawkish, saying inflation is too hot and there is no room for complacency. He said that he heard optimism from contacts about the economy this year, and that they share the same feeling, adding that the growth trajectory remains strong, helped by fiscal policy.
In the UK, the finance minister Rachel Reeves said that the economy is expected to grow by 1.1% in 2026, weaker than the Office for Budget Responsibility (OBR) projection of 1.4%. She added that “this government has the right economic plan for our country, a plan that is even more important in a world that in the last few days has become yet more uncertain.”
Expectations that the Bank of England was going to cut rates at the March meeting faded with odds standing at around a 75% chance last Friday, but so far, money markets have priced in only a 28% chance of a reduction.
GBP/USD Price Forecast: Technical outlook
In the daily chart, GBP/USD trades at 1.3294. The near-term bias is mildly bearish as spot slides below the clustered simple moving averages around 1.3500, signaling a loss of upside momentum after repeated failures along the descending resistance line from 1.3869. The upward-sloping support trend line from 1.3035 has given way with price now holding under the 1.3586 break area, reinforcing the shift toward a corrective phase. The deterioration in price action aligns with the ongoing softening in the Fed Sentiment Index, which has been grinding lower, suggesting waning bullish conviction in the pair.
Immediate resistance emerges near 1.3400, where the broken support line and the lower edge of the moving average cluster converge, followed by 1.3498 and then the 1.3550 region, both aligned with prior reaction highs capped by the descending trend line. On the downside, initial support stands at the recent low around 1.3290, with a break exposing 1.3200 and then the 1.3100 area, levels that precede the origin of the broader rising trend from 1.3035. A daily close back above 1.3550 would be needed to negate the current bearish tone and reopen the topside toward 1.37.
(The technical analysis of this story was written with the help of an AI tool.)
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.99% | 0.80% | 0.28% | 0.21% | 1.46% | 1.43% | 0.70% | |
| EUR | -0.99% | -0.18% | -0.68% | -0.77% | 0.46% | 0.44% | -0.29% | |
| GBP | -0.80% | 0.18% | -0.50% | -0.58% | 0.64% | 0.62% | -0.10% | |
| JPY | -0.28% | 0.68% | 0.50% | -0.09% | 1.17% | 1.14% | 0.41% | |
| CAD | -0.21% | 0.77% | 0.58% | 0.09% | 1.25% | 1.23% | 0.49% | |
| AUD | -1.46% | -0.46% | -0.64% | -1.17% | -1.25% | -0.03% | -0.74% | |
| NZD | -1.43% | -0.44% | -0.62% | -1.14% | -1.23% | 0.03% | -0.72% | |
| CHF | -0.70% | 0.29% | 0.10% | -0.41% | -0.49% | 0.74% | 0.72% |
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).
- Gold eases on Tuesday as the US Dollar climbs and Treasury yields rise.
- Middle East tensions linked to the US-Iran conflict keep safe-haven demand in focus.
- Technically, XAU/USD turns bearish after failing to sustain gains above $5,400.
Gold (XAU/USD) trades with a negative bias on Tuesday as a stronger US Dollar (USD) and rising US Treasury yields weigh on the non-yielding metal, even as geopolitical tensions surrounding the US-Iran conflict keep investors cautious.
At the time of writing, XAU/USD is trading around $5,060, down roughly 5% from the daily high of $5,379 reached during the Asian session.
US Dollar climbs above 99.00, Treasury yields extend gains
A stronger Greenback makes Dollar-denominated Gold more expensive for overseas buyers. The US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, climbs above the 99.00 mark to its highest level in over a month. Meanwhile, US Treasury yields continue to rise, with the benchmark 10-year yield gaining nearly 17 basis points (bps) over the past two days.
Despite the recent pullback in Gold prices, the downside should be limited amid a risk-averse environment. Markets are pricing in the possibility of a prolonged conflict in the Middle East after the United States and Israel carried out joint strikes on Iran over the weekend, with Tehran responding by targeting US military bases across several Gulf nations.
Late Monday, two drones struck the US Embassy in Riyadh. US President Donald Trump warned that retaliation could follow, telling NewsNation, “you’ll find out soon,” when asked about Washington’s response.
Oil-driven inflation risks temper expectations for Fed interest rate cuts
Meanwhile, the lack of strong upside momentum in Gold suggests investors remain cautious about the broader economic impact of the conflict. The geopolitical risk premium embedded in Oil prices has raised concerns about higher inflation, which could potentially affect expectations for Federal Reserve (Fed) interest rate cuts.
According to the CME FedWatch Tool, markets are fully pricing in the Fed to keep interest rates unchanged at the March and April meetings. The odds of a 25-basis-point rate cut in June have fallen to 28.1%, down from 42.8% a week ago.
Fed officials commented on the economic outlook on Tuesday. New York Fed President John Williams said the central bank’s policy stance is “well-positioned,” adding that eventual rate cuts would be intended to prevent policy from becoming too restrictive. Williams also noted that the US economy remains on a “solid footing” and that the labor market is “stabilising.”
Meanwhile, Kansas City Fed President Jeff Schmid said there is “no room to be complacent on inflation,” while noting that the growth trajectory remains strong, supported by fiscal policy.
Technical analysis: XAU/USD weakens after failing to sustain gains above $5,400
The near-term outlook for Gold turns bearish after buyers failed to sustain gains above $5,400. Price action on the 4-hour chart is forming a bearish flag pattern, signaling the possibility of further downside if support levels fail to hold.
The 100-period Simple Moving Average (SMA) near $5,093 aligns closely with the lower boundary of the flag, making it an important immediate support zone. A decisive break below this level could accelerate selling pressure and expose the next downside targets at $4,850, followed by $4,650.
On the upside, bulls would need to decisively reclaim and break above the $5,400-$5,500 resistance zone to invalidate the bearish structure and revive the broader uptrend.
Momentum indicators also point to growing downside pressure. The Relative Strength Index (RSI) has dropped sharply from overbought levels above 70 to around 39, indicating fading bullish momentum.
Meanwhile, the Moving Average Convergence Divergence (MACD) indicator has turned negative, with the MACD line falling below the signal line and the histogram expanding into negative territory. At the same time, the Average True Range (ATR) is rising, highlighting increasing volatility as selling pressure builds.
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.
- Silver falls nearly 10%, hovering near one-week lows around $80.
- Rising US yields and a stronger Dollar dampen demand for non-yielding assets.
- XAG/USD trades near the lower boundary of a rising wedge, increasing the risk of a bearish breakout.
Silver (XAG/USD) extends losses on Tuesday, falling nearly 10% as a stronger US Dollar (USD) and rising US Treasury yields temper demand for safe-haven assets despite fragile market sentiment linked to the ongoing US-Iran conflict.
At the time of writing, XAG/USD is trading around $80.68, hovering near its lowest level in over a week.
The pullback suggests markets are weighing escalating Middle East tensions against their potential economic consequences. Disruptions to Oil flows through the Strait of Hormuz have added a geopolitical risk premium to crude prices.
Higher Oil prices could fuel global inflation pressures and potentially complicate the Federal Reserve’s (Fed) monetary policy easing path. Higher interest rates typically reduce the appeal of precious metals, which tend to perform better in lower-rate environments.
From a technical perspective, the near-term outlook for XAG/USD has turned decisively bearish following a sharp reversal from Monday’s peak near $96.50.
The 4-hour chart shows the metal trading near the lower boundary of a rising wedge pattern, increasing the risk of a downside breakout.
Momentum indicators reinforce the negative bias. The Relative Strength Index (RSI) has dropped toward the 30 level, approaching oversold territory and reflecting strong selling pressure.
Meanwhile, the Moving Average Convergence Divergence (MACD) remains below the signal line in negative territory, with the histogram widening to the downside.
On the downside, a decisive break below the wedge support could intensify selling pressure, exposing the next support near $72.32, corresponding to the February 18 low. A deeper decline could then target the $64.08 region, marked by the February swing low.
On the upside, immediate resistance is seen at the 100-period SMA near $83.20, followed by the 200-period SMA around $88.80. A sustained move above the 200-period SMA would be needed to restore bullish momentum and signal a potential resumption of the broader uptrend.
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
Scotiabank analysts Shaun Osborne and Eric Theoret note that USD/JPY is up modestly, with the Japanese Yen soft versus the US Dollar but outperforming most G10 currencies except the Canadian Dollar. The currency is drawing some haven support and appears underpinned by verbal intervention from Japan’s Ministry of Finance. The latest USD/JPY advance has cleared early February election highs, leaving little resistance before the mid‑159s.
Yen steadies on haven flows and MoF rhetoric
"The yen is soft, down a modest 0.3% vs. the USD while performing relatively well against all of the G10 currencies with the exception of the CAD."
"The yen’s relative gains are important, reflecting (some) lingering haven-related strength despite the recent shift in the currency’s relationship to risk more broadly."
"The yen’s relative performance also likely reflects verbal intervention from Japan’s Minister of Finance Katayama who stated that the gov’t was ‘monitoring’ financial markets with ‘utmost vigilance’, language that is typically used as a warning to markets in order to mitigate disorderly conditions with the threat of central bank action."
"For USDJPY, the latest gains have broken the early Feb election highs, offering nothing ahead of local range high in the mid 159s."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Deutsche Bank’s Chief UK Economist Sanjay Raja describes the UK Spring Statement as largely uneventful, with only a handful of new measures and around GBP 6bn in extra borrowing by 2030/31. He notes a marginally better borrowing outlook and higher fiscal headroom, but warns that recent events, energy support demands and defence spending pressures could test tight spending plans by the Autumn Budget.
Spring Statement seen as fiscal non-event
"As expected, today's Spring Statement was largely a non-event. There were no big fireworks. New policy announcements were contained to already announced measures."
"After delivering 75 policy measures in the autumn, Chancellor Reeves stuck to her commitment to avoid any new major policy measures. In total, spending decisions taken in the Spring Statement were projected to add up to GBP 6bn in borrowing by 2030/31."
"As a result, borrowing is expected to track lower over every single year of the forecast horizon beyond 2026/27 (compared to the Autumn Budget), driven primarily by lower net debt interest payments and non-interest receipts. In even better news, public sector net debt is expected to be around GBP 22bn lower per year across the OBR's (Office for Budget Responsibility) five-year forecast horizon."
"On her primary headroom, the Chancellor raised her fiscal buffer to GBP 23.6bn in 2029/30. On her secondary rule, the Chancellor's headroom picked up to just over GBP 27bn."
"Based on current market conditions, higher inflation and weaker spending would dominate near-term projections, leaving the Chancellor with GBP 5bn less in headroom. Calls for support on energy prices will only increase from here, alongside calls to ramp up defence spending. Tight spending envelopes will also be called into question. "
"While the Chancellor may have built up a little bit more of a buffer over the last two fiscal events, pressure to spend some of her fiscal space will likely come to a head in the Autumn Budget."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Nomura analysts argue that the conflict-driven risk environment is likely to intensify appreciation pressure on the Swiss Franc. With inflation very low and the SNB policy rate at 0.00%, they see the central bank more inclined to intervene in FX markets to curb CHF strength rather than resort to a return to negative rates.
Franc strength and SNB response
"In the rest of Europe, currency appreciation pressures do not change our prior view for Norges Bank and the SNB, though we think the SNB is likely to intervene with FX purchases if there is further significant CHF appreciation."
"The risk environment following the start of the conflict adds to the likelihood of further appreciation pressures on CHF."
"With the SNB policy rate at 0.00%, the SNB’s main tools to prevent deflation as a result of further CHF appreciation are a negative policy rate or FX intervention."
"SNB Chairman Schlegel has been clear that the bar for a negative policy rate is high."
"Furthermore, the SNB said in a statement today (March 2) that “in view of international developments, we are increasingly prepared to intervene in the foreign exchange market”. We therefore view FX intervention to stem CHF strength as more likely than another policy rate cut."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- EUR/GBP trades slightly lower as investors reassess central bank policy outlook.
- Rising Oil prices linked to the US-Iran conflict fuel fresh global inflation concerns.
- Stronger-than-expected Eurozone inflation data offers limited support to the Euro.
The Euro (EUR) trades under mild pressure against the British Pound (GBP) on Tuesday as traders reassess the monetary policy outlook for major central banks amid inflation concerns tied to higher Oil prices driven by the US-Iran conflict. EUR/GBP is trading near 0.8710 at the time of writing, retreating from the daily high around 0.8739.
Markets are increasingly pricing in the risk of prolonged supply disruptions through the Strait of Hormuz, a key shipping route that accounts for nearly 20% of global Oil flows. Concerns escalated after an adviser to Iran’s Islamic Revolutionary Guard Corps said on Monday that Iran “will set fire to any ship attempting to pass through the Strait.”
In reaction, traders have scaled back expectations for a Bank of England (BoE) interest rate cut at the March meeting, with markets now pricing less than a 50% probability, Bloomberg reported on Monday.
The repricing is lending modest support to the Pound. However, Sterling lacks strong follow-through buying as political uncertainty in the United Kingdom persists amid renewed scrutiny over Prime Minister Keir Starmer’s leadership.
Meanwhile, stronger-than-expected inflation data offered little support to the Euro. Preliminary data released by Eurostat showed that inflation in the Eurozone picked up in February. The Core Harmonized Index of Consumer Prices (HICP), which excludes volatile food and energy prices, rose 0.8% MoM, rebounding from a 1.1% decline in January.
On an annual basis, core inflation accelerated to 2.4%, beating market expectations of 2.2%. Meanwhile, the headline HICP increased 0.7% MoM after falling 0.6% in the previous month, while the annual rate rose to 1.9%, above the 1.7% forecast.
European Central Bank (ECB) officials have also flagged the risks stemming from the US–Iran conflict. ECB policymaker Yannis Stournaras said the central bank is closely monitoring developments, adding that there is “no rush to change policy,” while warning that inflation could face upward pressure if the conflict persists.
Separately, ECB policymaker Francois Villeroy de Galhau cautioned against speculating on the next policy move, saying it would be “a mistake to predict rate moves in a hurry.”
Central banks FAQs
Central Banks have a key mandate which is making sure that there is price stability in a country or region. Economies are constantly facing inflation or deflation when prices for certain goods and services are fluctuating. Constant rising prices for the same goods means inflation, constant lowered prices for the same goods means deflation. It is the task of the central bank to keep the demand in line by tweaking its policy rate. For the biggest central banks like the US Federal Reserve (Fed), the European Central Bank (ECB) or the Bank of England (BoE), the mandate is to keep inflation close to 2%.
A central bank has one important tool at its disposal to get inflation higher or lower, and that is by tweaking its benchmark policy rate, commonly known as interest rate. On pre-communicated moments, the central bank will issue a statement with its policy rate and provide additional reasoning on why it is either remaining or changing (cutting or hiking) it. Local banks will adjust their savings and lending rates accordingly, which in turn will make it either harder or easier for people to earn on their savings or for companies to take out loans and make investments in their businesses. When the central bank hikes interest rates substantially, this is called monetary tightening. When it is cutting its benchmark rate, it is called monetary easing.
A central bank is often politically independent. Members of the central bank policy board are passing through a series of panels and hearings before being appointed to a policy board seat. Each member in that board often has a certain conviction on how the central bank should control inflation and the subsequent monetary policy. Members that want a very loose monetary policy, with low rates and cheap lending, to boost the economy substantially while being content to see inflation slightly above 2%, are called ‘doves’. Members that rather want to see higher rates to reward savings and want to keep a lit on inflation at all time are called ‘hawks’ and will not rest until inflation is at or just below 2%.
Normally, there is a chairman or president who leads each meeting, needs to create a consensus between the hawks or doves and has his or her final say when it would come down to a vote split to avoid a 50-50 tie on whether the current policy should be adjusted. The chairman will deliver speeches which often can be followed live, where the current monetary stance and outlook is being communicated. A central bank will try to push forward its monetary policy without triggering violent swings in rates, equities, or its currency. All members of the central bank will channel their stance toward the markets in advance of a policy meeting event. A few days before a policy meeting takes place until the new policy has been communicated, members are forbidden to talk publicly. This is called the blackout period.
Commerzbank’s Dr. Vincent Stamer notes Euro area inflation rose to 1.9% in February, with core inflation at 2.4%, both above expectations. The bank links part of the increase to higher energy prices following the conflict in Iran and sees Euro area inflation potentially reaching around 2.4% in Q2 2026, or close to 3% if Brent stabilizes near USD 100.
Oil-driven risks to Euro inflation
"Inflation in the euro area rose to 1.9% in February from 1.7% in January. Core inflation, excluding energy, food, alcohol and tobacco, also rose by two-tenths to 2.4%. Economists had expected inflation to remain unchanged. In some respects, the war in Iran is already casting its shadow: energy prices had already risen in February due to increased tensions."
"With the start of military strikes by the US and Israel against Iran, the price of Brent crude oil also jumped noticeably to over $80 per barrel. Initially, the rise in oil prices is likely to continue to affect gasoline and heating oil prices – around two-thirds of the inflationary effects in the first three months are due to direct price increases for fuels and other energy prices. In the slightly longer term, however, the core rate – i.e., inflation excluding volatile food and energy prices – is also likely to rise due to indirect effects."
"At the same time, crude oil futures indicate that market participants expect oil prices to consolidate by the end of the year. Our assumption for the course of the conflict is also that it will not last for many months. Based on this assumption, inflation in the euro area could rise to around 2.4% in the second quarter."
"If, on the other hand, the conflict continues to escalate and the oil price settles permanently at USD 100, inflation could be around 3% for the rest of this year."
"If the war in Iran continues, inflation in the euro area is likely to exceed the ECB's expectations. Nevertheless, we do not anticipate interest rate hikes by the ECB."
(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.
